Loot boxes are 'mystery packages' of digital content in video games where consumers spend real money to receive random in-game content that gives them advantages or cosmetic items for use within the context of the game. They are a form of in-game purchases, incentivizing gamers to spend small sums of money for a chance of receiving a desirable reward. The sale of loot boxes is highly lucrative for the video games industry, generating more than USD 15 billion globally in 2020. Loot boxes have been the source of several controversies, with accusations often being levelled against these mechanisms of being predatory, fostering addiction, exploiting vulnerable consumer groups, and more. As discussed throughout this report, the sale and presentation of loot boxes often involve exploiting consumers by:
- Exploiting cognitive biases and vulnerabilities through deceptive design
- Using aggressive marketing practices to push sales at every opportunity
- Meaningless or misleading transparency disclosures about the likelihood to win or lose that are difficult to assess
- Opaque algorithms and skewed probabilities
- Using layers of virtual currencies to mask or distort real-world monetary costs.
- Very high cost of freemium and endless grinding
- Risk of losing content at any time
- Targeting loot boxes and manipulative practices at kids
In this report, the authors demonstrate why the presentation and sale of loot boxes are exploitative and predatory from a consumer point of view by exploring two case study, the popular video games FIFA 22 and Raid: Shadow Legends. Both games employ a wide arsenal of tricks to push consumers into spending as much time and money as possible exploiting consumers hope to receive the reward despite a miniscule chance and likelihood to do so.
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