According to FIFA, its loot boxes are not considered a form of gambling.
The Viennese Higher Regional Court (Vienna HRC) recently delivered an unexpected verdict: it concluded that loot boxes in EA's FIFA games do not fall under the category of gambling, thereby reversing a decision from last year.
EA Celebrates as a Precedent is Set
Video game developer Electronic Arts (EA) has been under fire for its loot boxes in FIFA games for quite some time now. Last year, an Austrian court ruled that these loot boxes were equivalent to gambling.
However, EA publicly declared on Thursday that the Vienna HRC had overturned this judgment, stating that it no longer regards loot boxes as a form of gambling. The petitioners, Vienna-based Padronus Prozessfinanzierung, have indicated their intention to lodge an appeal.
The case specifically pertains to the aforementioned 'Packs' in EA Sports' 24 FC game, better known as FIFA 24. Players can purchase these packs to procure various footballers with varying strengths. Essentially, these packs are 'mystery boxes' containing footballers.
The likelihood of acquiring renowned players such as Neymar, Messi, or Ronaldo from these packs seems quite slim. Many players testify to having spent thousands of euros in an attempt to secure these sports legends from the packs.
Last year, EA and Sony were ordered to refund 10,800 EUR to players in Austria. A court had determined that the companies had violated the gambling law with the packs, considering them loot boxes with gambling-like qualities. This decision was overruled by the recent ruling of the Vienna HRC.
The reasoning behind this verdict is rather unusual. The court held that the plaintiff did not purchase the pack with the intention of reselling the players in the game to make profits, but rather to utilize them within the game – not for resale. The plaintiff purchased the pack to advance in the game, and thereby, the court ruled that it does not constitute gambling.
EA Earns Billions from In-Game Purchases
Loot boxes are not merely a secondary source of income for EA. The American company is said to generate several billion dollars annually from in-game purchases. In 2021, EA is said to have generated 1.5 billion euros solely from loot boxes in FIFA games.
Furthermore, EA provides other games with loot boxes, such as the football game Madden NFL. This game also allows players to buy surprise packages with real money. In total, in-game purchases are said to account for a third of EA's profits.
Despite this, the company asserts that most players do not make use of the loot box offers. Representatives of EA stated before a British parliamentary committee some time ago that they do not consider the term 'loot boxes' to be accurate:
"This is what we consider as a surprise mechanism. It's essential to consider that. If you – I'm unsure what your version of Target is – go into a store that sells a lot of toys, and you're looking for surprise toys, you'll find that people like them. They enjoy surprises. This has been a part of toys for years, whether it's Kinder Eggs, Hatchimals, or LOL Surprise!"
"We believe the way we've implemented these mechanisms – and FIFA, of course, is our major project, our FIFA Ultimate Team and our packs – is quite ethical and quite entertaining; it brings joy to people."– Kerry Hopkins, Senior Vice President, EA, House of Commons
At the end of September, EA released the latest version of their popular FIFA game: EA Sports FC 25. Despite the criticism and ongoing lawsuits, this game too includes Loot Boxes, allowing players to craft their digital dream team.
Loot Boxes Face International Criticism
The lecture on Loot Boxes is not a recent phenomenon in Austria. In recent years, there have been numerous rulings and regulations worldwide concerning Loot Boxes.
Loot Boxes have been deemed illegal in Belgium since 2018. They were classified as gambling and are no longer allowed in games. In the Netherlands, Loot Boxes were also banned in 2018, but the highest administrative court overturned the ban. However, legislative amendments are planned to enforce the ban in the future.
In Spain, a legislative process has been ongoing since 2022 with the aim of banning Loot Boxes. In Australia, games containing Loot Boxes must be labeled with the warning R18+ since September 2024.
In Germany, Loot Boxes are legal and may be offered in games. It has been debated for years that Loot Boxes pose a high risk of addiction and should therefore be banned. Politicians from Bremen submitted a proposal at the beginning of the year with the aim of achieving a nationwide ban on Loot Boxes.
The Supreme Court to Examine Loot Boxes
The verdict of the OLG Vienna is not yet legally binding. The plaintiff has already indicated their intention to appeal. The Supreme Court must now decide whether Loot Boxes in Austria should be considered gambling and how to proceed with them.
It remains to be seen how the Supreme Court will interpret the case and what landmark judgment they will pronounce.
Following the Vienna HRC's verdict, Electronic Arts (EA) is eagerly awaiting the plaintiff's appeal in the Supreme Court. If upheld, this decision could significantly impact EA's game monetization strategies, as loot boxes have been a significant source of revenue for the company.
The Supreme Court's ruling could potentially set a precedent for the legality of loot boxes in gaming worldwide. If it rules that loot boxes do not constitute gambling, it could open the door for other game developers to adopt similar in-game monetization strategies.
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