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What the UK can learn from the Far East's battle with loot boxes


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The debate surrounding loot boxes and in-game gambling has reached new levels, with the UK government now being called upon to change current legislation.

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Japanese Gacha or Gashapons.

A petition calling for the government to adapt current gambling laws to loot boxes in video games surpassed the 10,000 signatures needed to trigger a response from government – a response yet to be issued. And an MP submitted questions to the Secretary of State for Digital, Culture, Media and Sport asking whether the government plans to enhance protections against illegal and in-game gambling and loot boxes, receiving an evasive answer.

The government is dancing around the issue of loot boxes. But it turns out some countries have already had a stab at regulating them – with varied results. Japanese Gacha machines are the seed from which western loot boxes have grown. Gashapons, or Gacha for short, are vending machines which dispense capsule toys when a coin is inserted. The Gacha system began to make its way into Japanese free-to-play mobile games in 2011, essentially as a monetisation mechanic, and it worked. Puzzles and Dragons became the first mobile game to net over $1bn using the system, but it quickly became clear there was a problem with Gacha – it was basically gambling.

Kompu Gacha games offered a grand-prize for players who completed a collection of specific items. This encouraged players to spend more on randomised gacha draws, but with a low probability of ever getting the items they needed (sound familiar?). The system soon came under fire for encouraging gambling, particularly in children, and Kompu Gacha was made illegal by Japan’s Consumer Affairs Agency in May 2012.

In the wake of this, major mobile games developers GREE and DeNA (both of which saw share prices freefall as a result of the law) set up their own trade body, Japan Social Game Association, in the hope self-regulation would head-off government regulation. The trade body encouraged companies to publish their probability ratios, striving to regulate and control Japan’s social gaming industry. This may sound like a great option for the UK and Europe, but companies still found a way to use Gacha mechanics and the body dissolved in 2015.