The Psychology of Loot Boxes and Microtransactions

Electronic Arts have spent the past week fighting off a cavalcade of negative press following details of their microtransaction model for Star Wars Battlefront II. Current estimates of total content acquisition come to $2,100 or 4,500 hours of in-game play time, with a requirement of around 40 hours of in-game play time per character.

This business decision could not have come at a worse time as gamers are increasingly fighting back against loot boxes and microtransactions. Last month, a petition reached over 10,000 signatures asking British MPs to discuss loot boxes in parliament in relation to current UK gambling legislation. Just today, the Belgian Gaming Commission announced that it is launching an investigation into whether loot boxes can be considered as gambling.

With such a big conversation currently taking place about loot boxes and microtransactions, I thought it would be interesting to take a psychological perspective on this issue. In this article, I will be presenting research findings on the psychological effects and impact of loot boxes and microtransactions.

In order to clearly separate the two:

Loot boxes refer to a random chance of obtaining your desired item. In games such as Overwatch, there is no way to directly earn or pay for your item, the item must be obtained from a loot box or purchased from currency obtained from loot boxes.

Microtransactions refer to the ability to directly give a company money for an item or character. Microtransaction models typically allow for items/characters to be purchased with in-game currency earned through continuous play (e.g. League of Legends).

Now, let’s begin. There will be a summary at the end if you do not feel like reading it all, I won’t judge you.

Loot Boxes

Loot boxes can be compared to traditional gambling for two main reasons:

1. The ‘win state’ of a loot box is a gamble. Gamers will typically purchase loot boxes with the hope of obtaining particular skins or items in the game. This hope can be referred to as a ‘win state’ and the chances of reaching this win state are completely random.
2. In loot box models, there is no way to force a win state. In microtransaction models, you can at least give real or in-game currency to obtain exactly what you want. Just as you can’t make a slot machine give you the jackpot, you can’t make a loot box give you what you want.

In my previous article on the psychology of difficult video games, I talked about how human beings need to work small victories and positive feelings into their daily lives. The sad reality is that gambling, including loot boxes, is designed in a way where even if you don’t reach your win state, you’ve had some fun.

Research by Kim (1998) found that waiting for the outcome of a gamble can activate the brain’s chemical reward system, releasing endorphins that create pleasure. In a gaming context, think of someone who really wants the Pharah Anubis skin in Overwatch. They buy five loot boxes and get excited during the big flashy box-opening animation. This excitement happens five times in a short space of time, with five flashy box-opening animations that are almost an event in itself.

So the person received five endorphin rushes which were met with five disappointments. This means that they will stop now…right?

Unfortunately, sometimes our brains are not our best friends. In the field of gambling research, there are five (yes, five) cognitive fallacies a person in a fail state can go through that will eventually lead them right back to gambling. These fallacies are:

Chasing (Rogers, 1998): Chasing involves the process of continuing to gamble to recoup losses incurred by gambling. The person may be unhappy that they bought five loot boxes and didn’t receive their Pharah skin. If they bought ten loot boxes and received it, that would be more satisfying than buying five loot boxes and getting nothing.

The Gambler’s Fallacy (Rogers, 1998): The Gambler’s Fallacy refers to thinking that a negative outcome is less likely to happen now that several negative outcomes have occurred. In a nutshell, they believe they’re closer to the Pharah skin because they’ve had several bad boxes.

‘Self-Correcting and Fair’ (Kahneman et al., 1982): This fallacy involves the belief that gambling is ‘self-correcting and fair’. People will feel that they are ‘due’ or ‘entitled’ to a win as their luck has been poor thus far. Basically, “Those boxes were awful, the next ones will be good”.

Cheating the System (Turney, 2008): This fallacy is similar to the fallacy above, but people may become delusional and feel that they have figured out the ‘trick’ to getting what they want from the random chance. Think “I got three sprays in one box, that means the next ones will have skins!”.

The Entrapment Effect (Rogers, 1998): The Entrapment Effect argues that people may feel obligated to continue investing in the game because they have already invested too much money to give up their pursuit. Similar to Chasing, the gamer may feel obligated to continue purchasing loot boxes until they eventually get what they want. After all, they’ve already spent so much in their pursuit, they may as well reach their win state.

Biological support for gambling cognitive fallacies comes from van Holst et al. (2012). During an MRI scan, frequent gamblers and non-frequent gamblers were asked to estimate the probabilities of winning and losing different amounts of money. Not only were frequent gamblers worse at estimating losses, but they experienced an increased blood supply to the regions of the brain associated with reward expectancy when estimating wins. This suggests that frequent gamblers learn to minimise loss and have overly optimistic expectations for win states.

To summarise, the event of opening a loot box is designed to be exciting to compliment a person’s sense of excitement and anticipation. When a person experiences a fail state, there are at least five different cognitive fallacies they can experience to justify spending more money to reach their win state. This can lead to an adjustment in brain activity where losses are minimised and win states become overly optimistic.

Microtransactions

Microtransactions are trickier to discuss as they are not as straightforward as loot boxes’ random nature of win states. In fact, those who give in to microtransactions can be taunted by other gamers for not exhibiting enough self-control to just earn the product in-game. However, with EA’s recent revelation of requiring 40 hours of in-game time for one character, this practice is becoming harder to justify.

With this in mind, I am going to approach microtransactions from two perspectives. The first is the idea of a microtransaction as the giving of real currency to obtain an in-game item, character or boost. The second is the idea of a microtransaction as the giving of in-game currency obtained through repeated play.

Microtransactions: Real Currency

As previously mentioned, those who give in to microtransactions may be subject to ridicule from other gamers for showing low self-control. It is assumed that these people simply have no impulse control and are bad with money.

However, this raised an interesting question to me: what is the cause-effect relationship between playing games and impulse control? Do people who spend a lot on microtransactions already suffer from low impulse control, or does frequent video game playing somehow impact their ability to control their impulses?

To extrapolate, impulsivity is defined as “the predisposition for rash and unplanned actions without forethought for future consequences” (Barratt, 1985).  When I initially searched for video gaming and impulsivity, I was tripping over research which told me that those who play a lot of video games have low impulse control (Billieux et al., 2015; Billieux et al., 2012; Zhou et al., 2014). Allow me to elaborate on a few:

Metcalf and Pammer, 2014: This study compared regular first-person shooter (FPS) players with FPS players whose lives were being consumed by FPS games (e.g. not getting enough sleep, disrupting social life, causing home-life disruptions). It was found that the latter group had significantly higher impulsivity test scores that the regular FPS group. This finding has financial implications for FPS gamers as they may make impulsive decisions regarding character or item purchases irrespective of price tag. However, this study can be criticised as being androcentric due to its all-male population.

Pawlikowski and Brand, 2011; Yao et al., 2015; Dong et al., 2013: These studies together argue that reduced risky decision-making is a key impairment in those exhibiting signs of online game addiction. These people also do not consider the future implications of actions such as excessive spending.

Nuyens et al. 2016: Heavy League of Legends players found it more difficult to delay rewards and gratifications in a task than non-heavy players. In a nutshell, they want their reward and they want it now.

So we have a plethora of research which shows that those who play video games at a possibly pathologic level may harm their financial status due to low impulse control and a great desire for rewards. However, is there any credence to the idea that the current gaming climate can impact someone’s impulsivity? Unfortunately, yes.

While impulsivity was previously believed to be an innate personality trait, there is evidence to suggest that impulsivity can be learned through repeated exposure to the event – a process known as disinhibition (Goudriaan et al., 2004; Conversano et al., 2012). Hypothetically, a non-impulsive person could become interested in a game and its loot boxes or microtransactions. Through repeat purchases of loot boxes or microtransactions, they may begin to throw caution to the wind with their financial decisions. However, as learned impulsivity is an emerging field, there is a lack of evidence regarding other factors which can contribute to it. For now, it’s an interesting idea which posits that a slippery slope for microtransactions is indeed possible.

Microtransactions: In-Game Currency

With the revelation that Battlefront II requires around 4,500 hours of in-game play time to unlock all content, it may be time to ask ourselves whether inflating the time it takes for an individual to reach a win state in a game is potentially dangerous.

Interestingly, the answer may lie in the genre of game. A large-scale research study in South Korea found that the most addictive genres of games in this region were MMORPGs and shooters (Lemmens & Hendriks, 2016). When breaking down what exactly makes these games addictive, two main components include reward features and in-game achievements (Elliot et al., 2012).

Battlefront II, a shooter, is asking gamers to play around 40 hours before being rewarded by a character. The combination of an addictive genre with such spaced-out reward features may result in real-life consequences such as lack of sleep and potential fallout over how much time is being spent in the game (Metcalf & Pammer, 2014). Borrowing from The Entrapment Effect from the loot boxes section, it is possible that people will continue to invest long amounts of time into the game because they see how close they are to unlocking a character. “I’ve played 30 hours and I’m 10 hours away from a character, I may as well keep going”.

However, a silver lining may come in the form of a qualitative study of World of Warcraft players (Karlsen, 2010). In this study, those interviewed described the boring tedium of grinding in the game. Although it was boring, micro-rewards were identified from grinding such as the successful drop of a material that would contribute towards a crafting objective. It appears that Battlefront II’s system will not involve micro-rewards, it will simply be around 40 hours of play before a character is unlocked. If these 40 hours are full of uncooperative teammates and being told to kill yourself, this 40 hour stretch may not provide sufficient rewards to keep playing.

In summary, paid microtransactions may prey on gamers with low impulse control. However, it is unfair to look down upon these people as theoretically anyone can become a low impulse gamer through the slippery slope of disinhibition. Microtransactions through in-game currency may encourage long play sessions through The Entrapment Effect, potentially leading to real-life consequences such as lack of sleep and arguments. However, it is possible for this cycle to be broken if the game does not offer sufficient rewards for playing.

Thank you very much for reading this and please have a great day.

 

Summary

• The event of opening a loot box is designed to be exciting to compliment a person’s sense of excitement and anticipation. When a person experiences a fail state, there are at least five different cognitive fallacies they can experience to justify spending more money to reach their win state. This can lead to an adjustment in brain activity where losses are minimised and win states become overly optimistic.
• Paid microtransactions may prey on gamers with low impulse control. However, it is unfair to look down upon these people as theoretically anyone can become a low impulse gamer through the slippery slope of disinhibition (repeated exposure to gambling and/or microtransactions). Microtransactions through in-game currency may encourage long play sessions through The Entrapment Effect, potentially leading to real-life consequences such as lack of sleep and arguments. However, it is possible for this cycle to be broken if the game does not offer sufficient rewards for playing.

References

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