Regulation of Loot Box Mechanics

There has been debate among legal scholars as to whether loot boxes can be considered a form of gambling and whether they should or how they should be regulated. Loot boxes are virtual items users can purchase within video games for real money. These “boxes” contain random items which can range from cosmetic items that alter the appearance of characters in the game, to new weapons and tools or even access to new characters. In 2017 loot boxes brought in a record 30 billion dollars worldwide. It is projected that loot boxes will bring in 50 billion dollars in 2022. Electronic Art’s developer of several games that contain loot box mechanisms, made $2.6 billion in live services (including loot boxes) in 2018. One of EA’s popular Battle Royale games, Apex Legends is a free-to-play game that makes money off of in-game microtransactions that include loot boxes. In its first month, the game brought in $92 million. The allure of using loot box mechanisms stems from the fact that they seem to generate a large amount of revenue from a small user base that has described themselves as addicted to loot boxes, spending thousands of dollars on them hoping to acquire rare items. This post was originally published on the Cardozo Arts & Entertainment Law Journal website on October 25, 2021. The original post can be accessed via the Archived Link button above