When Games Have Loot Boxes, Is It Gambling?

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The economic principle I’m exploring is

“People generally respond to incentives in predictable ways”

My research question to help me study the economic principle is

“How do different companies choose what to include in their next console and games in order to
respond to incentives and to also make the best product they can produce for their customers?”

The article published in Proquest titled

“Loot Boxes Tempt, but Also Rile Videogame Players” demonstrates this economic principle because it argues
that video game companies incentive gamers to purchase loot boxes to possibly increase their gameplay.
However, this may be considered gambling because gamers then purchase loot boxes in order
to have a small percentage chance to get what they want.

First, Many video games nowadays if not a single player, people are encouraged to spend their money after they already bought the game, on in-game content for a chance to win good items to win the game easier. Some people think that it could be considered online gambling for children to adults because the person trying to get the specific object has to pay for a random roll. And, they might be trying to get the loot box on impulse because they are frustrated, rather than making a rational decision.

Second, “Wall Street has cheered the money generated from loot boxes, one part of a valuable strategy known as microtransactions. While there is no official tally of loot-box spending, microtransactions globally are expected to exceed $3 billion in console games alone in 2018, according to Wedbush Securities analyst Michael Pachter. Console games overall are expected to generate $33.3 billion in revenue world-wide this year, up 3.7% from 2016, according to industry tracker Newzoo BV.”

 Third, “The Entertainment Software Association, a U.S. trade group, said loot boxes are a voluntarily feature in some video-games and aren't gambling.” I agree with this definition because within some video games, the loot boxes do not have an affect on the persons gameplay. The loot boxes are only
for cosmetics. If it is only for cosmetics, then I agree with the definition.


 In my next blog post I will research: Should games who have microtransactions (sometimes known as MTX), separate who buys the microtransactions, from those who do not for more fair matchmaking?