Originally a 2 part series, it has been extended to three parts.

While I’m pretty pleased with the way Dreadtober turned out, committing to a horror post a day meant that I couldn’t talk about some events that unfolded over the course of October because they weren’t horror related. One big topic that I had to steer clear of was the rash of controversies in the video game industry surrounding loot boxes. If you are a hardcore gamer who likes to keep up with video game news, some of this information might seem redundant.

I’ll be approaching this subject matter assuming you, the reader, know next to nothing about all of this in hopes of engaging the more casual gamers who might not understand why any of this is a big deal. And believe me, if you are a consumer who purchases video games, even if it’s only one or two a year, you’ll want to understand how the future of gaming is being shaped by a little thing called loot boxes.

Before we get into the nitty-gritty of it all in the second part, let’s define some important terminology that I will be throwing around to ensure we are all on the same page.

  • Microtransaction- A business model where users can purchase virtual goods via micropayments. Microtransactions are often used in free-to-play games to provide a revenue source for the developers.
  • Free-To-Play Game- A business model for onlinegames in which the game designers do not charge the user or player in order to join the game. Instead, they hope to bring in revenue from advertisements or in-game sales, such as payment for upgrades, special abilities, special items, and expansion packs.
  • Loot Box- a consumable virtual item which can be redeemed to receive a randomised selection of further virtual items, ranging from simple customization options for a player’s avatar or character, to game-changing equipment such as weapons and armor. A loot box is typically a form of  monetisation with players either buying the boxes directly or receiving the boxes during play and later buying “keys” with which to redeem them.
  • Random Number Generator(RNG)- refers to the process by which computers generate apparently random numbers, essentially the computer equivalent of chance.
  • Entertainment Software Rating Board(ESRB)- a video game regulatory agency that assigns ratings(E for Everyone, T for Teen, M for Mature, etc.) and enforces advertising guidlines.

-defintions via wikipedia

 

The Origin Of The Loot Box

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The concept for the loot box reward system owes its origin from a combination of places, namely role-playing games and the mobile gaming space. Loot drop systems are common reward systems that are often used in role-playing games like the Diablo or Elder Scrolls franchises. The most common of these systems utilize the process of RNG to simulate the random chance outcome of a dice roll.

Mobile games, many who choose a free-to-play model of monetization, began to marry the concept of these RNG based-loot systems to microtransactions that would fuel their in-game economy. Due to the random nature of these boxes, it encourages players to pay more money for more chances of getting their desired outcome. Since there is no certainty you will get the reward you are looking for, there are obvious similarities between the loot box reward system and some forms of gambling(though the ESRB has deemed loot boxes not to be gambling as players are always guaranteed a product, even if its not the desired one).

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While loot boxes are not always tied to microtransactions, the concept became so lucrative in the mobile market that game developers/publishers who focused on the console and PC gaming markets began to take notice and started using these loot crate systems in their own titles, even in some full priced retail games(usually $60).

In Sunday’s post, we’ll go over why loot boxes are having both positive and negative effects on the gaming industry.