Probability disclosures are not enough: Reducing loot box reward complexity as a part of ethical video game design

Abstract

Loot boxes are virtual products in video games that provide randomized rewards, and accordingly share structural similarities with gambling. Policymakers around the world are presently considering how best to regulate loot boxes. Current loot box consumer protection measures, such as requiring probability disclosures, have been inspired by similar harm reduction approaches in gambling. However, unlike in many gambling games, most loot boxes’ reward structures are arguably too complex for consumers to be meaningfully protected by probability disclosures alone. But promisingly, loot boxes can readily be redesigned to be more ethical because they are digital products. Based on behavioural science principles, this article proposes four reductions to loot box reward complexity. The decision-making environment can be simplified by capping (i) the maximum number of loot boxes per game and (ii) the maximum number of potential rewards per loot box, and by (iii) equalizing winning probabilities across rewards. Additionally, (iv) companies can implement “exhaustible” loot boxes that provide the player with every potential reward after a predetermined amount of money has been spent, thereby effectively instituting a maximum spending limit. These ethical game design proposals can credibly reduce financial harms from loot boxes while both maintaining consumer freedom and preserving companies’ commercial interests.