Why India should care more than most about loot boxes

Our site understands that pay to win games are an international problem and we strive to look at the problem as such.  Last week I looked around at different countries based on problem gambling, gambling statistics, and – of course – mobile application spends.  It doesn’t take long to run some formulas in a spreadsheet and see the highs, lows, and anomalies.  It also didn’t take long to single India out.  It also doesn’t take long for those who wish to dump pay to win games into a ripe or growing market to do the same.  India has a giant bull’s eye on itself.

First, why care about problem gambling in relation to pay to win games?  Because pay to win games are gambling-lite1.  They pose as games, distribute for free and avoid regulations and oversight in doing so, and then use every gambling addiction mechanism a programmer2 can create just short of an actual cash payout.  They spend tons of money on ads345 to attract as many people as possible in hopes of getting the whales6.  Whales7 are a gambling term for the biggest spenders, not ironically used to describe the biggest spenders in mobile games.  Make no mistake, the complications experienced by problem gamers8 in this genre are the same as problem gamblers9.  Problem mobile gamers experience financial10 repercussions and loss of relationships11 while keeping their habit going.

So what does all this have to with India in particular?  If your job for a developer is strategy and helping guide your employer to target markets, India gets a gold star on the map.  A developer needs to look at factors such as regional income, regulations, and culture.  What they won’t put into a press release is that problem gambling and gambling addiction go hand in hand with their product, and the savvy developer weighs heavily on this cultural aspect.

Currently, there are other markets with high gambling addiction and mobile spending occuring.  What makes India unique are four factors:

  1. Their mobile phone infrastructure is exploding.
  2. Whilst they are a five millennia-old culture, they have done surprisingly little research on gambling addiction as it applies to themselves or anybody else.
  3. They have poorly addressed the overall issue of gambling regulation.
  4. Their population is huge at over 1.3 billion people.

Smartphone usage is rising dramatically in India as their infrastructure grows.  Currently their network lags behind most.  In 2017 they were ranked as 109th1213 in mobile internet speed with land-based high-speed internet not much better.  This is hampering their citizens’ ability at the moment to fully engage with the complete range of internet offerings, including massively multiplayer online games on smartphones.  India is growing this infrastructure as they grow as an economy.  Speeds of 4G and WiFi hotspots are expected to keep being increased for citizens. This growth makes the market more lucrative for those reading the market.

Our data shows India as spending 86 cents in US dollars per capita.  This is far below many countries, and far below other countries listed along with them as a top ten gambling country.  According to one editor14, these are the top ten gambling countries (including per capita app spending):

  • Great Britain (66.46)
  • Australia (50.76)
  • China (26.82)
  • Singapore (55.00)
  • Italy (34.90)
  • USA (93.00)
  • Canada (62.24)
  • India (0.86)
  • Ireland (53.20)
  • Finland (37.33)

Here are the dollar and cents rub: as the infrastructure grows15 and citizens of India can dump more money into mobile apps, that means a 1.3 billion increase in app revenues for each dollar they go up per capita.  Just getting to Chinese levels, that is $36 billion more for the mobile app industry.  USA levels would be a $126 billion bump.

Now onto India’s gambling regulations.  They are sparse at best; the country has only two federal rules that apply (as of this writing).  One dates to 186716 and the other is encompassed in a general data act from the year 2000.  They define gambling as betting on something with random results, but if strategy and skill are involved, it is not gambling.  They also indicate they can block any foreign site with taboo content. The bottom line is gambling is taboo in India.  Some areas locally allow casino activity, while others ban gambling altogether. There are many more local laws to consider.

In 2014 the first modern paper17 on gambling addiction was written, and it advised there should be a paper on gambling addiction as well.  It was done by interviewing therapists in India.  The study revealed they had no specific training on gambling addiction, though they had the tools based on other addiction training. Those interviewed expressed a need for training specifically on gambling addiction.  The study also pointed out a search of studies in India only found two pieces, not even studies, on gambling addiction done in India.  One was about gambling in ancient Indian texts18 and the other about the allure of playing dice19. Since then some studies have been published but it is far behind other country’s self-studies.

What does all this amount to?  India can watch and moderate gambling apps on a case by case basis while the mobile app developers addict their most at risk citizens on loot boxes or other mechanisms at will, or… they can be the first huge economy afforded the opportunity to get it right before these things become a major social and economic problem for their at risk population. I am hoping for the latter that they lead the pack for the rest of us.

  1. Video game loot boxes are psychologically akin to gambling
  2. The F2P Bible
  3. Clash of Clans mobile game was most popular Super Bowl ad in 2015
  4. Mobile Strike’s $5 million Super Bowl ad has Arnold Schwarzenegger rehashing his famous one-liners
  5. A $40M Ad Budget Buys ‘Game of War:Fire Age’ Kate Upton
  6. Interview with the video game whale
  7. Gambling Terminology: Whale
  8. A game changing survey on paytowin and problem gambling
  9. What is problem gambling?
  10. Belgian teen spends $46,000 in free-to-play ‘Game of War: Fire Age’
  11. The true cost of mobile gaming
  12. India ranked 109 out of 122 countries in mobile internet speed; below Pakistan, Nepal
  13. Updated by Speedtest
  14. Ross-World’s Top Ten Worst Gambling Countries
  15. India poised for smartphone revolution
  17. Gambling addiction in India: Should psychiatrists care?
  18. Compulsive gambling in ancient Indian texts
  19. Allure of dice

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