If you missed part 1 of The Great Lootbox Debate, click here. Originally this was supposed to be a two part post, but I wrote so much that I have to add another part to the series.
Trends in gaming are not that hard to predict as the market has a very cyclical nature. Anytime someone makes or does something that makes money, odds are that everyone else will rush to make their own version of that same thing, to get their own slice of the pie. Once the market becomes supersaturated with this same kind of thing, the general interests for that kind of product plummets and all but the cream of the crop suffer. Then someone makes something else that makes a crap ton of money and the cycle starts all over again.
We’ve seen this time and time again within the gaming industry. We’ve seen it with MMO’s, Hero Shooters, Open World games, and the MOBA’s. I believe we’re now seeing a similar situation with microtransactions and loot boxes except we won’t be seeing these things going away anytime soon. Why is that? The damn things just make too much money for companies to ignore. According to Blake Jorgensen, game publisher EA’s chief financial officer, at a 2016 investor conference, EA makes $1.3 billion a year from “extra content”. That includes Downloadable Content(DLC) and microtransactions. (Read IGN’s original article here)
The Pros and Cons of Loot Boxes
- More money is being pushed back into the gaming industry- As I said earlier, loot boxes are being utilized more and more because of the massive profits they make. This money is being funneled back to the game publishers/game developers which can then be used to create more content for that game or to begin development on another project. In general, the more money the gaming industry as a whole makes, the healthier the state of the gaming industry.
- A viable, alternative monetization model- Everyday there are tons of new games releasing that the public is largely unaware of. Browse through your Steam, Xbox, PSN stores and you’ll be amazed at the scale of what you find. On Steam, more games have been released on the platform in the last three years than the entirety of their 2006-2014 lineup. With such crowded markets, it’s harder and harder for all, but the biggest games to catch the attention of consumers. Free-to-play monetization models(many utilize loot box systems) have risen as a proven success story and can help even the playing field for smaller dev teams. If a game is free to play, there is no risk for the consumer to try the game and if the mechanics of the game are fun enough, you just may earn yourself a paying customer. That is, of course, the most ideal situation and it doesn’t always work out like that, but diversity in monetization models is a good thing.
- Expanding the lifespan of games- More and more games are transitioning to the “games as a service” model. A stark contrast to a time when developers would make a game, release it, and move on to another project, more and more games are being viewed as a service rather than a singular product. That means games are being supported for longer and longer after their launch date with updates, patches, and new content. Developers are looking to make more money from a singular game for a long period of time and that’s where DLC, microtransactions, and loot boxes come into play. While pushing more and more money into a singular game might be a turn off for some consumers, especially if you’ve already paid a premium price just to access the game, it keeps the game fresh for longer with others. There’s a real chance that the game at launch will look totally different from the game once the servers are no longer supported years in the future and if there is a successful eSport tied to your game, then your game’s lifespan increases even further.
- Susceptible to anti-consumer practices- There have been some really shady and anti-consumer practices regarding loot boxes. We’ll get into specifics later, but without any regulation or oversight, companies can be as aggressive with their loot box systems as they want to be.
- Content that used to be available with a game purchase is now being hidden behind paywalls- While its true that games are becoming more expensive to produce, many games are released with features missing or sections of gameplay carved out for later release. Paying a premium price for a game used to mean a full experience, but now companies have taken to releasing broken or bare bones games and fixing them later with patches or updates. I’m all for companies trying to earn more of their money back with extra content, but it needs to be extra content and not cut content.
- Utilizes the psychological and addictive qualities of gambling- While the ESRB might not view loot boxes as gambling, there is no denying that these systems utilize many of the same mechanics. Opening a loot box is exciting because you don’t know what you are going to get and if you fail to get the thing you want, you can always roll again…
In our final part on Tuesday, we’ll go over the most egregious examples of loot boxes and some games who have implemented loot boxes in a relatively fair way.