Loot Crates: Gambling, Or Good Clean Fun?

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"Karma Slot Machine" from u/ohsureyoudo
"Karma Slot Machine" from u/ohsureyoudo

TL;DL (Too Long; Didn’t Listen):

Loot crates are virtual prize boxes available for purchase in video games, containing mystery items like customizations, powerful weapons, or rare gear. They are also the subject of the most downvoted Reddit comment of all-time, the crux of a debate about the definition of gambling, and a window into the history of human evolution.

Reddit Links: 

-Dr. Alok Kanojia's AMA on video game addiction
-A post about loot crates and gambling addiction
-The most downvoted comment in Reddit history
-A subreddit dedicated to help people with video game addictions

Other Links:

-Sahil's Twitch
-Dr. Alok Kanojia's company, Healthy Gamer

Full Transcript:

This content was originally created for audio. The transcript has been edited from our original script for clarity. Heads up that some elements (i.e. music, sound effects, tone) are harder to translate to text. 

Ben Brock Johnson: Amory. I’m gonna play you two sounds. Are you ready?

Amory Sivertson: Yeah.

Ben: Okay, sound one:

Sound one plays

Amory: Huh, OK.

Ben: Sound two:

Sound two plays

Amory: Hmm, they’re like different settings but they have similar vibes. There’s almost like a similar underlying melody in both of them.

Ben: Yeah and does the melody feel almost like anticipatory, like ahhhh. Or revelatory, maybe revelatory is the word.

Amory: Yeah, I don’t think I would have classified it as revelatory but there’s definitely something. I’d classify it as like, a little unsettling to me.

Ben: OK, I’ll take unsettling.

Amory: OK, sold! Unsettling.

Ben: Alright, any guesses of what these kind of similar sounds are?

Amory: They’re scenes from video games.

Ben: So one is the sound of the floor of a casino. Full of slot machines. You ever played a slot machine? Pulled the lever?

Amory: Yeah I have.

Ben: Right. So the second sound is a loot crate. The sound of a loot crate. See, to me these two sounds are pretty similar. They both have that ahhhhh. So the reason I’m asking you this is that there’s this huge debate that has been playing out across the world over the last few years about whether loot crates are a form of…

Amory: Gambling?

Ben: Gambling. Because gambling is, for really good reasons, highly regulated. Loot crates, inside video games? Are not. And they’re found in games played by a lot of…

Amory: Teenagers!

Ben: Yeah! A loot crate is really defined as a thing that you buy in a video game, that has inside it a bunch of digital goodies. And some of these goodies are just for fun. But some of them, end up having real value for video game players. Either by helping them do better in the game itself, like more powerful gear or whatever, or just being rare and cool enough to be traded or sold on a secondary black market to other gamers.

Amory: Remind me why I care about loot crates again?

Ben: Trick question! You do not care about loot crates clearly.

Amory: I do not care about loot crates.

Ben: But what if I told you that our loot crates story has a connection to Star Wars.

Amory: I’m listening…

Ben: ...and also a 50 billion dollar jackpot for the video game industry.

Amory: That’s a lot of money.

Ben: ...and also, Amory, cracker jacks?

Amory: Alright, I do like popcorn in all its forms.

Ben: What if I told you that it had something to do with how us, humans have evolved. And survived. What if I brought you the science of loot crates?

Amory: You know, you’ve been talking about this for months. I think you finally get your loot crate episode Ben. Congratulations.

Ben: Yes!


I’m Ben Brock Johnson.

Amory: I’m Amory Sivertson.

Ben: And you’re listening to Endless Thread. The show featuring stories found in the vast ecosystem of online communities called Reddit.

Amory: We’re coming to you from WBUR, Boston’s NPR station. Today’s episode…

Ben and Amory: Loot Crates!


Ben: OK Amory, that loot crate sound I played at the top of the episode?

Amory: Mmhmm.

Ben: So I recorded that loot crate sound with the help of a guy named Sahil Parikh.

Sahil: Twitch name is Kanga underscore Roux, R-O-U-X. 

Ben: Do you know what a Twitch streamer is?

Amory: I do. They play games and talk to other people while they’re playing games on the Twitch forum.

Ben: Yeah, well done!

Amory: Thank you.

Ben: Sahil basically broadcasts his game play and other people watch it, and they all talk to each other about it. So Sahil sat down to buy a loot crate with me. On his laptop, which is a laptop specifically designed for playing video games.

Sahil: Just logging in.

Ben: And also he has one of the games most famous, or infamous, for selling loot crates. It’s called Overwatch.

Amory: OK I have heard of that game!

Ben: The last official count I saw said that Overwatch had 40 million players around the world. Amory, apparently you’ve heard of it, but are not one of those players.

Amory: Nope.

Ben And I am also not one of those players. But Sahil is.

Amory: Sahil sounds like the real deal, I gotta say. But I hope you at least paid him back for this loot crate.

Ben: I did reimburse him.

Ben: Sahil, I'm going to give you ten dollars 

Sahil: Alright. 

Ben: And you can unmute your laptop if you so choose. OK, this is beautiful. Okay.

Amory: So, this is in the video game?

Ben: Well, it’s almost like next door to the lobby of the video game. So Overwatch is what’s called a team-based, first-person shooter game. Amory, which I know you play lots of games, lots of really fast-paced action between players. But when you’re not actually playing the game, you can buy loot crates. It’s almost like going to the pro shop for tennis or golf or something. Does that make sense?

Amory: Yeah. Or like if they can’t seat you at a restaurant they try to get you to spend extra money at the bar first.

Ben: Except, unlike a lot of other video game marketplace purchases, where you’ve got lots of options for specific things you can buy. In the loot crates area of Overwatch, you can only buy one mysterious thing.

Ben: It's like kind of like a futuristic looking box with like, glittery light shooting out of the cracks in the box. And it says, it says, “Open loot box and shop.” 

Loot crate noise

Sahil: That's what I'm hoping to hear, that extra sound there that tells me I got an even more rare item. 

Amory: So, you’re buying a thing but you can’t see what’s inside of it, you can’t touch it, you can’t engage with it in any way. Why would you do this?

Ben: Yeah, it’s pretty risky, right? But loot crates or loot boxes aren’t as far out as they might seem. They’re based on this really very basic premise.

Amory: Rolling the dice. Taking a chance on something.

Ben: And in the late 1800s, for instance, you could get trading cards in your cigarette pack.

Amory: It does kind of reminds me of trading cards because you could buy a pack without knowing what you’re getting.

Ben: Yeah. And Sahil made the same point.

Sahil: I always compare it to baseball, just in the sense that you can sell baseball cards for quite a lot if you get the right rare cards. I’d sometimes get a $20 card or get a $50 card or get a $100 card. Be like, “Hey, I just made 100 bucks.”

Ben: This is where crackerjacks comes in, too.

Amory: Because you’re buying something and there’s a mystery prize?

Ben: Yeah.

Amory: But that doesn’t quite work because I always know what I’m getting with crackerjacks. You know, I’m getting a snack. And I get this little prize or whatever on the side, but it’s definitely not going to have a resale value of 100 dollars.

Ben: But what if it did? Value is in the eyes of the spender right? Imagine a world where a whole bunch of people thought those Crackerjack prizes were worth paying for. This is by design. This is why loot crates are a huge part of how many video games make money now. Loot crates are a big business. We’re talking a projected 50 billion dollars in sales per year as part of the overall business by 2022.

Amory: So this reminds me of a game I am familiar with: Fortnite, the huge global video game phenomenon. The game is free. But people buy outfits and other things that customize their avatar or character in the game.

Ben: And that game’s revenue in 2018 was something like a billion dollars. A free game. One billion dollars in revenue. Amazing. But perceived value can get you in a lot of trouble.

Amory: So are we gonna talk about some Reddit threads now?

Ben: Totally.

Amory: So when I knew we were going to be talking about loot crates, I went on Reddit and found a lot of threads on the subject. People talking about being addicted to video games and talking about their challenges of being addicted to video games, that’s a whole genre of Reddit posts.

Ben: There’s one from six months ago titled, “I have a gambling addiction. Loot boxes are very detrimental to me.” It’s from a user who says they spent $1,000 dollars of real money on these digital loot boxes.

Amory: Another user on Reddit said that back in 2017 they spent ten thousand dollars on these types of in-game purchases. Crazy.

Ben: Yep. And just in case anyone is listening to this and thinking, hey, don’t tell me about video game addiction when there are real addiction problems in the world. I just want to underscore this is dead serious. People have lost jobs, partners, developed other addictions that they say came from their video game addiction. South Korea, you may have heard Amory, do you know about this?

Amory: No.

Ben: They enforce a national video game curfew between the hours of midnight and 6am for kids under 16.

Amory: What?

Ben: Yes. And that is because gaming addiction is an epidemic in South Korea.

Amory: Gaming addiction may not be at that level here in the US. But the use of loot crates does potentially connect it to the national numbers on gambling addiction, which is estimated to be between two and five percent. Maybe more following a relaxation of gambling restrictions in states around the country. But Ben you found a Redditor right here in Boston who can speak to video game addiction. A sympathetic narrator if you will.

Ben: I did.

Dr. Alok Kanojia: So I struggled with video game addiction myself in high school and in college. Had less than a 2.0 GPA after two years of college, and was really directionless. And I actually ended up going to India and staying at an ashram for one summer and decided to become a monk and studied kind of on that path for about seven years. 

Ben: Because video games? 

Alok: Originally yeah.

Ben: Spoiler, this guy is not a monk. He ran into a little issue with that.

Alok: That sort of didn't work out. I met my wife and so the monk thing sort of went out the window. 

Ben: I'm sorry for your loss. 

Alok: Yeah. And the joke that I made during my med school interviews is that she wanted to be married to a doctor, so here I am.

Amory: Here who is?

Alok: So my name is Alok Kanojia. I'm a psychiatrist. I'm faculty at Harvard Medical School, I work at McLean Hospital. And most of what I do in my day job is actually addiction psychiatry and more recently, like technology addiction psychiatry.

Ben: The reason Alok has made the transition from monk to technology addiction psychiatrist is not just because of his own problems, or his partner wanting to marry a doctor. A year ago, he posted on Reddit offering to answer people’s questions as a psychiatrist interested in video game addiction. He got a massive response. His post hit the front page. People in Saudi Arabia were calling the hospital he worked at asking for him because their kids are addicted to video games.

Alok: So I started getting requests from like South Korea, like the UK, Europe, the Middle East. And then quickly realized after I got probably over a thousand requests for help in 24 hours that, as an individual clinician, there's no way that I can just help all these people, like I just can’t do it.

Ben: Alok and his wife started a service called Healthy Gamer. It’s meant to help people with video gaming addiction. And it employs people who know video gaming, in the hopes of bridging the gap to families and kids who are struggling with video game overload. But not necessarily to kick video games cold turkey.

Alok: We sort of learn about addictions, like we have a good sense of addictions. But most of those addictions are substance use disorders. We think about heroin or cocaine or alcohol. And heroin and cocaine and alcohol are biological molecules that travel to one part of our brain and then affect it in a very specific way. 

Ben: Yep.

Alok: Whereas video games engage us on so many different levels. Video games give us a sense of accomplishment. They give us a sense of identity. They give us a sense of community. You know, I work with gamers who say, “I can't stop playing a video game, I have no control over my life, I want to kill myself.” And I also hear gamers say, “My parents are abusive. You know, one of my parents is an alcoholic. I get bullied at school. And if it weren't for you guys, his gamer friends, I would have killed myself a year ago.” So I think the reason that video games are so addicting is because they satisfy basic psychological needs that we have. You know, envision a 15 year old who's got acne and is a little bit overweight and gets bullied at school. But on the Internet he can be whatever he wants to. 

Ben: He can be a "God of War," so to speak. 

Alok: Yeah, right. 

Ben: Interesting. 

Alok: And people don't judge him for the way he looks.

Ben: Right

Alok: So one of the big challenges that I have is in explaining to parents that when you take away a child's video game, like, what are you taking away from them? Are you taking away their friends, are you taking away their community? Or are you taking away their sense of self? 

Ben: So it sounds to me like you're advocating for making that relationship with video games more healthy, not necessarily ending the relationship? 

Alok: Yeah absolutely. So I think that's why, you know, we founded for that reason.

Amory: Alok’s startup offers courses, remedies, coaching. Some of the company’s offerings are free, but others come at a price. He is a real doctor after all. But it’s not a loot box. Healthy Gamer tells you what you’re getting.

Ben: Loot boxes have really evolved over the last decade or so to be central to modern video games. But the idea of winning a mystery prize in a video game goes way back. Amory, do you remember Super Mario Brothers?

Amory: Dunna nunna nunna. That was their theme, right?

Ben: Yes!

Amory: Yessss.

Ben: The game that launched Nintendo and home video games into our collective consciousness.

Super Mario Sound

Ben: And those boxes that Mario would like jump and punch to get mushrooms that upgraded his character…

Amory: Oh they had a question mark on them. So it’s kinda like an OG loot crate!

Ben: Yes!

Amory: Also didn’t Nintendo start out as a playing card company in like the 1800s? Playing cards that were, I imagine, used in gambling? The plot thickens.

Ben: It does thicken because you’re right! People were using these cards to gamble illegally in Japan. And Amory get this: a loose translation of the Japanese word Nintendo supposedly, sort of calls back to that angelic loot crate sound we heard at the beginning. Translated it's, “Leave luck to heaven.”

Amory: So the history of video game loot crates is pretty much tied forever to the history of gambling. But we don’t know for sure whether they are the same thing or not.

Ben: Well, let’s not leave that to heaven. Let’s decide right here on earth, in a minute.

[Sponsor Break]

Amory: So we’re trying to answer the question of whether loot crates are gambling, or not.

Ben: Right. And I got the help of a woman who is a video game player and a gambling expert. But, she claims, not a gambler herself.

Dr. Lia Nower: I’m not a dopamine rush kinda girl. I’m way too cautious and nerdy and numbers-oriented for that. 

Amory: Nerdery evidence: Lia Nower runs the Center for Gambling Studies at Rutgers University. The Center studies gambling, its intersection with the internet and video game technology, and how to treat people who develop gambling addiction.

Lia: You know, I did my dissertation years ago on kids that develop gambling problems. And what we found was that a significant proportion had a parent who gambled at problematic levels. So, in New Jersey we have a lot of racetracks and they have family day, picnic this, picnic that. So you trundle along at five years old with your dad, your grandpa. Everybody's having so much fun, then you go back. And pretty soon you're sort of immersed in that culture and it becomes what you perceive to be a harmless family activity.

Ben: And for most people it is harmless. But it can be addictive. And Lia defines gambling like this:

Lia: Gambling is basically betting money on an outcome of random chance. You're willing to put up money with the hope that you're going to win more, but you may lose all your money.

Amory: This sounds a lot like what you’re doing when you buy a loot crate: random chance. Spending money with the possibility of getting nothing of value in return. And while it’s true that there’s really a broad spectrum of loot crates in different video games, and a broad spectrum of how players can or can’t trade, sell or resell what they get in a loot crate, generally speaking, loot crates are represented by video game companies as having value. Why else would you buy one? It’s the mystery part that gets tricky. Lia and her colleague Vivian Anthony did a whole study on gambling and loot boxes.

Lia: 46 percent of those who played video games also bought loot boxes. And among the loot box players, they were significantly more likely to also have gambling problems and or problems with video gaming. 

Amory: Lia says that what hasn’t been established is whether or not loot crates are a gateway to gambling. There’s a high level of correlation between the two, but we don’t know if one leads to the other.

Ben: Also, the United States hasn’t yet defined loot crates as a form of gambling. And Lia says scientists can’t really do that work. It has to be done by the government.

Lia: Take the analogy from daily fantasy sports. Those of us in the field think daily fantasy sports is gambling. But, you know, the higher courts say no it's not. You know, the legislation says no it's not. So, somebody in a position of regulatory or legislative authority has got to really clearly start to define these boundaries or not. 

Ben: Do you think that's going to happen? 

Lia: You know I'm not sure. I think in some countries that have much more rigorous policing of anything that could be related to a gambling activity, yes. In countries like the United States where it's very market driven and capitalistic in its orientation, it may be a ways off. 

Amory: Politicians in the U.S. are talking about regulation, though. People like Republican Senator of Missouri Josh Hawley. He’s targeting gaming companies because he says loot boxes separate impressionable kids from their money.

Senator Josh Hawley (in video): And they get the kids addicted to the game. This needs to stop. They need to be upfront about what their games are actually doing and they need to stop practices that intentionally exploit children.

Amory: Hawley introduced legislation in May that would ban the sale of loot boxes to kids. It hasn’t really gone anywhere yet. But it does have bipartisan support.

Ben: And this Amory, leads us to a global debate around video games and loot crates that has been happening around the world over the last two years. Are you ready for an international trip?

Amory: Oh yeah.

Ben: OK let’s go to Belgium.

Amory: I’ll have 5 waffles please.

Ben: Coming right up, topped with a confit, of regulation. Last year in Belgium, the Gambling Commission ruled against loot crates in three big games: Overwatch, FIFA 18, and Counter Strike Global Offensive. And the companies that make these games faced a penalty there of 800 thousand euros and five years in prison if they kept including loot crates.

Amory: Yikes! Shall we hop over to Australia?

Ben: G'day, Mate! You want to eat Aussie pie and play loot crate video games? You might soon need to be 18, because loot crate video games will be rated R.

Amory: Regulation is also happening in Japan. And what’s interesting here, is that it’s not just legislators who are getting frustrated with loot crates. Gamers are pissed too.

Ben: Amory, we’re gonna do the Star Wars part now, are you ready?

Amory: Yes!

Ben: Okay, so this is a perfect example: Battlefront II, the Star Wars game that came out in 2017, Amory I’m sure you were all over it, was full of loot crates. But these were loot crates that you kind of had to buy, or at least could buy, in order to really progress in the game. Like you could jump ahead by buying these loot crates cuz you’d get better gear and stuff. And this is something that people call pay to win. Ever heard of that?

Amory: Yeah, don’t like it.

Ben: Yeah not happy a lot of these gamers were with this game company that makes Battlefront: Electronic Arts. And ever since that game came out, EA has had a bad rep with some video game players.

Amory: You just said that just like Yoda, Ben. Not happy these gamers were.

Ben: Not happy these gamers were!

Youtuber: EA, you have sunk to a new low!

Amory: This is like a whole genre of YouTube videos. Gamers who are mad about video game companies using loot crates to make money. Electronic Arts, the video game company that made this Star Wars game, really got raked over the coals for this. Because originally Battlefront II nudged players to not just spend 80 bucks on the game itself, but a lot more money on loot boxes that helped them progress in the game. Basically, a pay-to-win scheme. When gamers called them out, EA put a bit of a non-apology on Reddit. And it is literally the most downvoted Reddit comment in history. Seriously. It’s in the Guiness Book of World Records.

Ben: Two things should be said about this, though. Number one: a lot of people draw a distinction between loot crates that just drop cool items for customizing your character and, of course, the loot crates that drop items that actually give you a leg up in the game.

Amory: And two: video game companies have been changing the way they use loot crates. EA changed Battlefront II just because of the blowback it got. Gaming companies have changed their loot crate policies. They’ve made it more clear what you might get when you buy loot crates. They’ve made it harder for kids to buy them. And in countries where they’ve been banned, video game makers have complied with regulators.

Ben: But loot crates are still everywhere. People are still spending oodles of money on them. There’s still lots of discussion on Reddit. Why?

Amory: You have an answer to this question, right? This is where you’re gonna bring the science?

Ben: Yes. And this, to me, Amory, is maybe the most interesting part of all of this. Alok, our ex-gaming addict, ex-monk, turned psychiatrist. He says that loot boxes and gambling in general connect to something fundamentally human, and primal.

Alok: So there are primitive circuits in our brain, which is like our our dopamine circuitry. So there's like this thing called the mesolimbic circuit, which anytime we have kind of satisfaction and triumph, activates. Loot crates activate that same kind of part of our brain. Because the thing about the loot crate is it's not guaranteed success. Right, so what makes it fun is that there's anticipation and then there's reward and sometimes there's denial of reward. So we see the same mechanic where, when you deny a reward sometimes and you give it another time, that actually reinforces the behavior, right? 

Ben: ...which is so weird because, mathematically, if you want to be consistently successful you would avoid things that give you mixed success, right? 

Alok: Well, if you think about it [how] our brains evolved, if you think about a mammal that's looking for food, the mammal that's going to be the most successful is the one who checks the berry bush today and then also checks it again a month from now even if it didn't have berries. 

Ben: Huh. 

Alok: Right? So if we're thinking about hunter-gatherers, our reward circuitry is very fine-tuned in terms of , there has to be a reward some of the time. And the mammals that found the reward some of the time were the ones that were the most successful. Because they didn't give up after just trying once. Like I'm going to go west of my town today and look like I'm going to forage, some days I'll find something in some days that I won't. 

Ben: So are you saying that like loot crates in video games, they're reinforcing a fundamental mammalian evolutionary response or something? 

Alok: Absolutely. So I think if we look at why video games are addictive, like why are they fun? It’s because they tap into things that evolution has selected to be like good for us.

Amory: Humanity loved loot crates even before we knew we loved loot crates. And also, the original loot crate was a berry bush that our ancestors found some berries on. I still might not have any interest on playing video games, Ben. But I think I’m coming around to loot crates being worth our time.

Ben: Right. But maybe not always worth the money.

Amory: Crackerjacks on the other hand….

Ben: Let’s go get a box and find out what’s inside!

Amory: Yes!

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Josh Crane Producer, Podcasts & New Programs
Josh is a producer for podcasts and new programs at WBUR.



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