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As regulations heat up, will game studios’ bet on loot boxes pay off? – Tech Crunch

You would be hard in a rush to find a game that doesn’t include some form of microtransactions these days, especially in mobile games. Makes sense for gaming companies – a hugely lucrative revenue stream, the microtransaction market was worth $60 billion in 2021 and is expected to reach $106 billion by 2026.

Typically offered as in-game collectibles, currencies, or random-based loot boxes, microtransactions are now better received than they were a few years ago. Loot boxes, which allow players to receive random in-game rewards in exchange for real money, have been maligned for some time now, and they are increasingly coming under government scrutiny.

Loot boxes have become a problem as they encourage spending real money for a slim chance of getting valuable in-game items, most often leaving players with nothing to show for it except the desire to keep on going. play for better items. Companies have been known to use predatory sales tactics to sell loot boxes and, in doing so, offer miners a path to gambling. Despite Electronic Arts (EA) insistence that loot boxes are not gambling and are, in fact, “mechanical surprise“, several studies have shown that there is a link between loot boxes and gambling addiction.

Redemption of paperwork

When Belgium forbidden loot boxes in 2018, it seemed that the first domino had fallen, and new regulations from other countries would soon follow. The response that followed was slow, however, despite countries like the UK agree that loot boxes are a problem which needs to be addressed.

One of the biggest hurdles facing countries trying to regulate loot boxes is that they don’t fit their current definitions of what constitutes gambling, which allows companies to offer them and continue to operate outside of traditional gambling regulations.

The Netherlands, following the Belgian ban, also attempted to step up a gear by Fine Electronic Arts in 2019 on the inclusion of loot boxes in its famous FIFA franchise. This fine was knocked down earlier this year after an appeal.

EA couldn’t celebrate their victory for long, because the Netherlands now have it pushed to update its legal definition of gambling to ensure better regulation of loot boxes. It remains to be seen if this translates into an outright ban or if EA requires a gaming license and all the regulations that come with it. When that happens, it’s likely that EA will simply remove the offending loot boxes from games sold in the Netherlands, similar to its response to the ban in Belgium.