This paper proposes a new classification framework for loot boxes and microtransactions that could be adopted as a guide by regulators and gaming publishers operating in the global, hyper-connected landscape of online gaming.
Authors
Shaun Star, Associate professor, Jindal Global Law School, O.P. Jindal Global University, Sonipat, Haryana, India; TC Beirne School of Law, The University of Queensland, Brisbane, Queensland Australia.
Stephanie Derrington, UQ Business School, University of Queensland, Brisbane, Queensland, Australia
Sarah J Kelly, UQ Business School, University of Queensland, Brisbane, Queensland, Australia.
Summary
The recent exponential increase in the presence of loot boxes and other forms of microtransactions in online games, together with the consequential development of a “token economy,” have created regulatory challenges around the world. The similarities between loot boxes and traditional forms of gambling give rise to serious and long-term psychological and financial risks, particularly among a largely minor, vulnerable audience.
Regulators must, therefore, decide whether loot boxes and microtransactions should be addressed in the same manner as traditional gambling activities. Recognizing that the legal definition of gambling is a policy matter for different legislatures, this paper proposes a new classification framework for loot boxes and microtransactions that could be adopted as a guide by regulators and gaming publishers operating in the global, hyper-connected landscape of online gaming.
The framework is designed to assist policy makers to achieve consumer welfare goals while also not unduly restricting the ability of adult consumers to make informed decisions as to when they participate in gambling-like activities or inappropriately interfering with the legitimate commercial endeavors of game developers.
This paper advances nascent commentary in relation to the growing integration of microtransactions and loot boxes in the structure and content of video games and outlines a reform agenda informed by regulatory global responses to the issue.
Published in: Journal of Gambling Issues
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