Children, money and loot boxes.

So a couple weeks ago I had my whole family (mom, dad, sister, cousins, aunt…) coming over to have a family lunch on a lovely Sunday. After the lunch I noticed my three little cousins were playing games on their phones (yes, they are 8–10 years old and they have a phone). So I approach them and ask them: “What are you playing?”. They go on to show me the trending games that had been holding their heads down for 2 hours or more.

I found them talking about FIFA, Fortnite, Counter Strike, Call of Duty… All of a sudden, one of my cousins stands up and asks my aunt if he could buy a new Silver Box for a certain game. So she agrees and he uses his facial recognition to pay 2,99€ for this so called Silver Box, which basically contains new paid-extras for the game he was playing.

Money is not money anymore.

As for my cousins, there are thousands of kids out there that have never ever hold a coin/note on their hands. You may be thinking: “David, that’s technological evolution, my grandmom did not know about credit cards, it is not a big deal”.

First of all, I am the most tech-oriented person I know in my inner-circle. I am just questioning if those kids are going to have a strong enough knowledge about what money means, how you manage it and how you earn it. For them, having a phone is having money (I can buy videogames and order pizza with facial recognition, my phone pays for it).

Not touching physical money is something that can affect the conception they have about money. When I was given 3€ by my mom in 2005, I knew I could buy 2 lollipops, 3 chewing gums and a can of soda with those 3€. But at a certain point, I was going to be “bankrupt”. Now, if a kid is 24/7 buying with his/her mom’s card, that is connected to their phones, that has unlimited funds… then money is not money anymore. Money is having an iPhone now.

Living on a bubble rocks!

So I am sure you have used either Instagram, Facebook, Netflix or Uber Eats. What do they have in common? Them all have that lovely menu/section that says “Recommendations for you”, or “Based on your previous purchases”. These recommendation algorithms work, and they work so good that they seem to know your film/food preferences even better than your relatives.

This is what we like to call a filter bubble. In 2018, Google admitted having a problem with this. To put it in simple words, if in 2016 you had been searching about “inmigration” and about “Texas Riffle Association”, most likely you will get headers in favor of Donald Trump as Google interprets those searches and acknowledge you are more likely to vote for the Republicans.

Okay, that was an extreme example. But we all have noticed that Youtube, Instagram and Facebook recommend content based on our search record and on our conections. This makes the individual more likely to visualize, connect, share and like with think-alike individuals, and this fact creates a huge bias for children.

If social media always makes you think that everyone around you have the same interests that you have, read and watch the same stuff, always support your content… then what we are creating is a generation of people who have not faced confrontation and have not been exposed to other ideas. We are creating a generation that thinks they are and will always be accepted by the rest of the World.

Your kid could become a potential gambler.

So we first thought money management and awareness was a problem, then we faced the issue of filter bubbles. What if I told you that the videogames industry could turn your kid into a compulsive gambler?

The problem are simply loot boxes. For those not familiar with the term, loot boxes are consumable virtual items which can be redeemed to receive a randomized selection of further virtual items. This means, a box “that contains stuff that your kid loves”. On FIFA, those loot boxes unlock players for your team (Messi and Ronaldo are the rarest, of course, and most valuable). Loot boxes can be acquired with real money (yes dad, your credit card) or with in-game currency.

From my perspective it seems that if a kid plays X game for Y hours, he will get enough points (currency) to pay for those loot boxes. Special and valuable prizes are hard to get, extremely hard. Obviously, videogame designers work hard to make the “opening” animation as striking and eye-catching as possible.

If you have ever been to a casino, you find people playing slot machines for hours, spending money just to see if they can get the desired Jackpot. I mean, just like your kid last weekend, right? Furthermore, there are videos on Youtube in which the youtuber is simply recording himself while he opens loot boxes either on Fortnite, FIFA, CS… And trust me, those videos have hundreds of thousands of views. Oh, do you want examples? Check this, and this one too. So if your kid is not spending your money, no worries, he might be watching others spending it on Youtube.

It is time to reconsider what we are doing with the new generations and if technology is reaching a point of no return. Thank you for reading up to this point, support this if you enjoyed the reading.

David Sánchez.

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Bibliography:

Special mention to my friend Roberto Arrojo, who last Saturday held a fabulous speech about the intrincates of Social Manipulation which has deeply inspired this article.

  • A. Cuthbertson. “Video game loot boxes should be illegal for children”. Independent. September 12, 2019.
  • J. Desjardins. “Why Gen Z is Approaching Money Differently Than Other Generations”. Visual Capitalist. November 27, 2018.
  • E. Pariser. “Beware online filter bubbles”. Ted Talks. March 2011.

BSc in Finance and Accounting by Universidad Carlos III. Passionate about economics, banking, technology, human behavior, and data science.

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