Loot boxes are being put under the microscope by the Australian government

Although Australia’s ECRC has already concluded that loot boxes are “psychologically akin to gambling”, a new report from the Australian Senate has called for further action. Just days after the FTC launches its own investigation in the US, pressure has mounted for the Australian government to follow suit following a month-report to define the loot box.

The recommendation began with the 90-page report, via Variety, where the Australian Senate Environment and Communications References Committee defined what loot boxes are and their impact on both the public and the industry amidst struggles of piracy.

“This review should commission further research into the potential for gambling-related harms to be experienced as a result of interaction with loot boxes; identify any regulatory or policy gaps which may exist in Australia's regulatory frameworks; examine the adequacy of the Classification Scheme as it relates to video games containing loot boxes; consider if existing consumer protection frameworks adequately address issues unique to loot boxes; and ensure that Australia's approach to the issue is consistent with international counterparts,” explains the report.

“Loot boxes represent the evolution of revenue streams in the gaming industry. Previously, game titles were sold as a complete stand-alone product. As a title gained popularity, a sequel or ‘expansion pack' may have been offered, however the sale of a title was largely considered a single transaction without ongoing interaction between the purchaser and the developer. As the industry evolved, developers began offering Downloadable Content (DLC) which, though smaller than expansion packs previously offered, would nevertheless offer new characters, costumes, additional missions or storylines”, states the committee. Of course, the report also makes an effort to draw attention to the “growing community concern and debate” pertaining to gambling.

The report has proven divisive, with Senator Jordon Steele-John of the Australian Greens political party criticising the approach as too lax. “Many loot boxes utilise a number of psychological mechanisms commonly seen in other forms of gambling, including variable ratio reinforcement schedules, entrapment and ready and constant availability”, said the Senator, emphasising the risk to “children, young people and even vulnerable adults”.

Australia’s Interactive Games & Entertainment Association was more positive, describing the approach to be “measured and considered. As always, IGEA will work constructively with the Government and other interested parties to provide details and clarity as appropriate, noting however that the current report suggests this particular area of games is already subject to regulation from many different departments and authorities.”

The recommendation states that the Department of Communications and the Arts should head the ““comprehensive review of loot boxes in video games” in conjunction with “the ACMA, the ACCC, the Office of the e-Safety Commissioner, the Classification Board, and the Department of Social Services.” The government has yet to officially declare an investigation, however it’s unlikely to decline given the prominence of the conversation, both nationally and internationally.

KitGuru Says: It seems as though opinion on the loot box is divisive worldwide, making it difficult to ever establish a universal stance. It remains to be seen what Australia will conclude, but government regulation is certainly still on the table.

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