October 10, 2019

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Business October 10, 2019

Loot Boxes Are A Lucrative Game Of Chance, But Are They Gambling?

Loot boxes are mystery boxes purchased through video games, and they are a multi-billion dollar industry. But are they gambling and should they be legal?



MARY LOUISE KELLY, HOST:

In the last few years, a new, unregulated and lucrative game of chance has popped up. It is tempting kids and confounding regulators around the world. We are talking about loot boxes. They are embedded in video games. Ben Brock Johnson from our Planet Money podcast explains.

BEN BROCK JOHNSON, BYLINE: You know that little box from the seminal Nintendo game “Super Mario Brothers,” the one with a question mark on it? When busted open, it would give Mario special abilities…

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JOHNSON: …Like growing into a giant version of himself or shooting fireballs at his enemies. This might have been the video game ancestor of the modern loot box, and these days loot boxes are a key part of an exploding video game business. Video games blew past global box office sales in 2018, part of a nearly 20% growth in the video game industry year over year. Loot boxes are part of that growth and projected to increase to a $50 billion annual business by 2022. In the game, “Overwatch,” which boasts a reported 40 million players around the world, a loot box costs about the same price as your average lottery ticket.

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JOHNSON: Nine ninety-nine will get you a pack of 11. Open one up – you might get a new outfit, called a skin, or a catchphrase for your avatar to say.

(SOUNDBITE OF VIDEO GAME)

UNIDENTIFIED ACTOR: (As character) Catchphrase.

JOHNSON: Players buying loot boxes can get all kinds of digital tchotchkes. They can also get addicted. Gamers have reported spending thousands of dollars on these mystery in-game purchases, and regulators are starting to take notice. In May, Republican Senator Josh Hawley introduced a bill that would ban the sale of loot boxes to minors. Here he is in a video posted to Twitter.

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JOSH HAWLEY: They need to be upfront about what their games are actually doing, and they need to stop practices that intentionally exploit children.

JOHNSON: Belgium and the Netherlands have already moved to ban the sale of loot boxes in games like “Overwatch” and “FIFA 18.” Australian regulators have recommended making games that include loot boxes rated R. But it’s far from game over for loot boxes, and that’s because lawmakers are having a hard time deciding if popping open imaginary boxes is really gambling. Lawmakers generally draw a line between games of chance and games of skill when it comes to defining what is and isn’t gambling. Lia Nower is the director of the Center for Gambling Studies at Rutgers University.

LIA NOWER: Somebody in a position of regulatory or legislative authority has got to really clearly start to define these boundaries.

JOHNSON: Nower and colleagues at Rutgers conducted a study on the correlation between loot boxes and gambling.

NOWER: Forty-six 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.

JOHNSON: As loot boxes have become more controversial, video game companies are adjusting their business models anyway. Electronic Arts, a game-maker who faced a horde of angry gamers after making loot boxes a central part of its 2017 “Star Wars Battlefront II” game, changed the video game to be less focused on loot box sales. Other gaming companies have changed their loot box policies and design as well. Whether or not regulators in the U.S. will eventually make a call one way or the other on whether loot boxes are gambling, it’s a bit of a mystery all its own.

For NPR News, I’m Ben Brock Johnson.

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Copyright © 2019 NPR. All rights reserved. Visit our website terms of use and permissions pages at www.npr.org for further information.

NPR transcripts are created on a rush deadline by Verb8tm, Inc., an NPR contractor, and produced using a proprietary transcription process developed with NPR. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authoritative record of NPR’s programming is the audio record.

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Sports October 10, 2019

Before The Houston Rockets, Daryl Morey Was A Numbers Whiz In Boston

Before Houston Rockets general manager Daryl Morey was thrust into international spotlight this week for supporting Hong Kong protesters, he first built his reputation as a numbers whiz in Boston.



ARI SHAPIRO, HOST:

Like so much these days, this next story started with a tweet – a tweet in which an NBA team executive offered support to the people protesting Chinese rule in Hong Kong. Now Chinese state television is canceling broadcasts of the NBA’s preseason games, and other basketball business deals are in jeopardy. The person at the center of this international incident is Daryl Morey, general manager of the Houston Rockets. As Callum Borchers of member station WBUR reports, Morey first built a reputation as a numbers wiz in Boston.

CALLUM BORCHERS, BYLINE: Daryl Morey isn’t new to controversy.

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CHARLES BARKLEY: I’m not worried about Daryl Morey. He’s one of those idiots who believe in analytics.

BORCHERS: That’s basketball Hall of Famer Charles Barkley slamming Morey on TNT a few years ago.

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BARKLEY: All these guys who run these organizations who talk about analytics, they have one thing in common. They’re a bunch of guys who ain’t never played the game, and they never got the girls in high school, and they just want to get in the game.

(LAUGHTER)

BORCHERS: It may sound juvenile, but disputes involving Morey, until now, have basically come down to jocks versus nerds. He’s a pioneer in the field of sports analytics, relying more on hard data than scouts’ eyes to evaluate players. He taught a class on the subject at MIT when he worked for the Celtics and co-founded MIT’s annual sports analytics conference in 2006. He acknowledged at this year’s event his ideas about how basketball should be played sometimes rankled people with more experience on the court.

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DARYL MOREY: Taking really, really challenged shots, if they’re from the right zones, is a big advantage and not playing in this way that’s more aesthetically pleasing but that’s more brutishly effective – everyone thinks they’re ruining basketball.

BORCHERS: Well, not everyone. Morey hasn’t won a championship. But since he took over the Rockets as a 34-year-old phenom, he’s consistently assembled one of the NBA’s best teams.

(SOUNDBITE OF NBA TELECAST)

UNIDENTIFIED COMMENTATOR: Twenty-six three-pointers for the Houston Rockets – a new NBA record.

BORCHERS: At the same time, Morey’s conference at MIT has become a big draw for sports executives who want to learn from him and other analytics experts.

BEN ALAMAR: Every single team in a major league in North America sends high-level people to that conference.

BORCHERS: Ben Alamar is a former analytics guru for the Oklahoma City Thunder and Cleveland Cavaliers. He says he’s seen the rest of the NBA become more like Morey.

ALAMAR: Daryl really ushered in a whole new way of thinking about how to run an organization that really checks for human bias and corrects for that and allows us to think more clearly and more rationally.

BORCHERS: Morey declined to be interviewed for this story. In fact, lots of people who know or work with him also declined. Perhaps it’s because the Hong Kong situation is so sensitive.

ANDREW ZIMBALIST: Oh, my. Well, it’s very complicated.

BORCHERS: Andrew Zimbalist is a sports economist at Smith College. He says the Chinese market is hugely important for the NBA. More people watch NBA games in China than in the United States. And popularity means money.

ZIMBALIST: The NBA has a contract with the media company Tencent for $1.5 billion.

BORCHERS: A numbers guy like Morey probably knows all this, which makes his public support for Hong Kong protesters all the more notable. A purely analytical approach to the bottom line might have been to stay quiet and let the money keep flowing. Zimbalist says Morey may be data-driven in his job, but he’s not a robot.

ZIMBALIST: I know Daryl. I think that he probably has some urge in him to express himself on more meaningful matters than whether somebody is going to score 20 or 21 points in a game.

BORCHERS: NBA Commissioner Adam Silver has said Morey has a right to express himself. But Silver has also lamented the, quote, “fairly dramatic consequences from that tweet.” The NBA seems to wish Morey had stuck to the analytics that he’s known for.

For NPR News, I’m Callum Borchers in Boston.

Copyright © 2019 NPR. All rights reserved. Visit our website terms of use and permissions pages at www.npr.org for further information.

NPR transcripts are created on a rush deadline by Verb8tm, Inc., an NPR contractor, and produced using a proprietary transcription process developed with NPR. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authoritative record of NPR’s programming is the audio record.

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