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Monte Casino: A primer on loot boxes

Posted on 08 November 2017 by Shiyi

We’ve had a few emails about loot boxes lately – mostly to do with their similarity to gambling, and that they’re accessible to children.

Loot boxes have become increasingly visible in the videogame landscape, and are included in big budget games such as Middle Earth: Shadow of War, Overwatch, and the upcoming Star Wars: Battlefront 2, with little examination of the potential harms that can arise from such systems.

Man sits in a casino surrounded by electronic slot machines

Read our other blogs on loot boxes:

What's a loot box?

Loot boxes are virtual boxes that contain randomised items that you can use in a game. They’re a little bit like booster packs for trading cards. This might be confusing so here is a video of somebody opening a number of loot boxes:


Some of these items are purely cosmetic, such as changing what a character wears, but others can affect gameplay, such as changing the way in which a weapon fires and how much damage it does. 

Loot box falls from the sky in Call of Duty: WW2
A loot box being opened in Call of Duty: WW2

Most games will offer some way for players to earn loot boxes without spending money: in many games winning matches or performing well gets you to loot boxes faster. However, the key to something being a loot box is that the item inside the box is random, and that you have the option to use real money to buy the boxes. 

They’re actually a variation on Japanese capsule toy vending machines, which are called gachapon. This is only important because I want to make gacha-puns later on in this blog.

What's the harm?

“I’d never spend money on loot boxes - I’d just play the game!” I’ve not spent money on loot boxes either but we know that videogames are about conditioning and learning; nobody is born knowing how to use a gamepad. People who make videogames know that the brain is plastic, and they use little tricks to get you to feel or perform a certain way. That’s why Team Fortress 2 gives you that really satisfying ‘ding’ every time you deal damage to someone. That’s why character models are exaggerated and stretch in the way that they do in Street Fighter (just look at Chun’s standing fierce) – and why they’re turned ever so slightly towards the camera.


It’s quite clear that loot boxes are designed to make you spend money in order to get intangible rewards. That’s their sole purpose; they have no other in-game function. Someone, whether it be a producer, publisher, or developer, wants players to pay for them, and they’re going to know how to push those buttons.

The harms from this outside of spending lots of money (one of our staff members spent over $350 on a free-to-play mobile game without realising) are unclear at this point – reward pathways are being tapped into, and it has been suggested that overstimulation of these pathways in developing brains could lead to addictive behaviours further down the track.

But we don’t need to have that conversation about long-term harms to see that this system is going to be a problem for young people, who are still developing impulse control, and are therefore just more likely to splash out if they’re able to. We don’t need to have that conversation to see that it’s going to be a problem for people who suffer from Obsessive Compulsive Disorder, or to see that there are more practical problems such as whether developers will simply make items worthless in a matter of days.

Unclear as the harms are, the message “don’t buy the loot boxes then” doesn't recognise how games design is used to effectively push players towards buying loot boxes.

Chun Li in Street Fighter 3: Third Strike performing a standing fierce
Chun Li's standing fierce in Street Fighter III: Third Strike

Gotta gach 'em all

Let’s be real though. You’ve probably already made up your mind about loot boxes. If you’re not a “don’t buy the loot boxes then” type then you’re probably a “the games industry is nickel-and-diming us” type. It’s a common conceit. The emails we’ve received certainly call for some level of regulation, and were surprised that we weren’t doing so already. Unfortunately, the situation is a bit more complex than simply having the Classification Office regulate the practice.

The classification process is bound by New Zealand law, which is created by parliament. The law sets out the issues the office can and can’t consider: so issues such as sex, horror, crime, violence, and offensive language are set out under the Classification Act. Gambling isn’t one of them. Our office simply doesn’t have jurisdiction over the issue, and as an independent crown entity, we don’t have the power to change the law directly.

But are loot boxes even gambling? We contacted the gambling unit at the Department of Internal Affairs after receiving enquiries, and they said:

Gambling, as defined in the Gambling Act, means paying or staking consideration, directly or indirectly, on the outcome of something seeking to win money (or money’s worth) when the outcome depends wholly or partly on chance. The Department considers ‘loot boxes’ as a marketing tactic within computer games that use psychology to reward players and encourage them to spend more on the game. While the exact contents of a loot box may be unknown at time of purchase, the payment of the charge does purchase a box. This does not appear to meet the definition of gambling.

Even if this was gambling, only the gambling that is conducted in New Zealand is subject to the provisions of the Gambling Act. New Zealanders are able to lawfully gamble on overseas websites but they do so at their own risk.

We also emailed the Consumer Protection team at the Ministry of Business, Innovation, and Employment, who said the loot box issue is “outside our scope of knowledge”. They recommended people seek independent legal advice or go to a Community Law Centre, Citizen’s Advice Bureau, or for more information about consumer rights.

Gacha gacha gacha pon

Like New Zealand, the official view in the UK is that loot boxes are not gambling per se. But this view isn’t taken across all jurisdictions. China and Japan have both regulated loot boxes in one way or another; China in particular classes loot boxes as “lottery tickets” and quite explicitly treats them as a form of gambling. However, videogame companies have been able to exploit loopholes in China, and in Japan an industry-regulated model hasn't worked. Gachapon has been around for a lot longer than loot boxes in their current form and it's still a practice that is difficult to pin down. It's difficult for legislation to keep up with technology and government oversight is impossible where the legal frameworks don’t support it.

Image of patapon holding up an orb from Fire Emblem: Heroes, a free-to-play gacha game
"Pon pon pon gacha"

Gachapon de replay

I used to play World of Warcraft a lot. I’d come home from school and immediately boot it up and when Wrath of the Lich King came out I’d wake up in the middle of the night specifically to contest Wintergrasp before going back to sleep. I’d poured full days of my life into the characters that I was playing. Some time before I finally stopped playing WoW I looked at the number of hours that I had spent as a shadow priest named Ciaran. It was about 340 hours: slightly more than a fortnight. On top of that I had another main and a couple of alts I used to play against other players. People looking at me back then probably would have said I was addicted; no one ever did but I probably would have been offended at that accusation. Looking back now all these years later I’m not so sure I wasn’t.

A loot box being opened in Overwatch
A loot box being opened in Overwatch

I’ve been on both sides of this argument. I’m just not convinced that we should wash our hands of the loot box discussion by pretending it doesn’t exist, which is why I wrote this blog. I want to have this conversation. The Classification Office might not be the correct organisation for it but I’m glad we’re thinking more deeply and critically of games practices. This is an opportunity.

A better understanding of the systems behind our favourite videogames is likely to buffer against their effects. But an honest examination also shouldn’t focus arbitrarily on some feedback loops and completely dismiss others. There's a difference in the potential harms of loot boxes and a distaste for horse armour. Loot boxes aren't uniquely bad when and because they lock single-player content behind a paywall; at that point you’re not angry at loot boxes, you’re angry at capitalism.

Forcing players to buy loot boxes in order to finish a game actually seems unlikely and while we’ve received a number of emails about it being in Middle-Earth: Shadow Of War in this instance doesn’t appear to be true. Can it happen? Yes. But the potential harms of loot boxes are still there even without overstating the way they have been implemented in games. They’re already doing a fine job of hooking whales. The office might not be able to regulate the increasing number of videogames using loot boxes to draw players in, but we can start an honest dialogue about the ways in which videogames affect their players. Let’s talk about how best we can deal with that.

Shiyi works at the NZ Office of Film and Literature Classification. Her views do not necessarily represent those of the Chief Censor or of the Classification Office. Keep up with our blog posts by following us on Facebook and Twitter.


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