Loot Boxes in video games have been getting quite some attention lately; sometimes they get even more attention than the respective game itself. The kind of attention loot boxes draw, depends on the person looking at it. It maybe an online item trader looking to find out what’s inside the box. Or, it maybe a government official investigating the impact of loot box transactions and gambling addiction among teenagers. Either way, loot boxes are subject to both market research as well as controversies.
What is a Loot Box?
Let’s say you are playing an online multiplayer game, be it an FPS or an RTS. After playing for a few hours, days or maybe even several weeks, you’ll notice that you’ve received an “item drop”. Now these item drops maybe earned at random moments in time, or as in many cases, rewarded to you for leveling up in the game or participating in certain activities. These item drops maybe in form of some in-game cosmetic items, perks, or “loot boxes”.
A Loot Box or Loot Crate is a virtual item that functions as a storage unit for other in-game items. Once you receive a loot box, you can either sell it on the online market for in-game or real life currency, or open it. While some loot boxes can be opened anytime by a user, some require a “key”. These virtual keys need to be purchased from the online market by either using in-game or real life money. These keys can then be used to open a loot box and redeem what’s inside it.
A loot box may contain one or more items from a list of several items. These items can be of several types including but not limited to weapon skins, outfits, in-game currency, music kits, in-game perks, experience points, and many more. Every item inside a loot box has it’s individual “rarity”. Items that are common are of very less value and can be found inside most loot boxes. Some items, however, are very rare to find and has huge market value.
Is it a business model or a paywall?
Now there are multiple sides to this story. Having a rigid opinion on this would be unfair and biased. There are both upsides and downsides to loot boxes.
Loot boxes have been, on numerous occasions, regarded as “paywalls”. Games such as ‘Middle Earth: Shadow of War’ have been globally criticized for it’s apparent “pay-to-win” gameplay format. In a pay-to-win situation, a game is designed in such a way that buying a loot box with certain perks and experience points will give players an edge over other players. They would get direct access to in-game levels and resources which would normally require several hours of grinding. Therefore, players with enough money can quickly buy their way up whereas deserving players with skills will have to complete quests and other rigorous in-game tasks to reach the same level.
Another major source of controversy is the rising concern for gambling addictions. Apart from receiving loot drops in a game, loot boxes can also be purchased with real money. As I’ve stated before, loot boxes may contain either a common or a rare item. Sometimes, the item maybe even cheaper than the cost of the loot box itself. People with compulsive behaviour may develop gambling addiction and spend huge sums of money on loot boxes and their keys. This is the primary reason why loot boxes are either regulated or banned under gambling laws of several countries such as Belgium, Australia, China, and several others.
On the bright side, they serve as a great monetization option for game development companies. Developing a game requires lots of resources, manpower, and other assets. All of this costs money. When a company spends millions of dollars in making a game, they do so with the intention of earning a considerable amount of profit so that they can make more, and better games. While AAA titles are usually priced at a much higher rate and earn revenue from game sales, free-to-play games rely solely on microtransactions and loot boxes.
Developers of MMORPGs and other games featuring loot boxes constantly add new content to their games to keep players engaged. Value of a loot box decreases with time which is why companies introduce new loot boxes occasionally. Loot boxes ensure that the company keeps on earning a stable revenue after they have successfully shipped a game. This is very applicable for free-to-play games since these games do not earn much from shipping their titles. Their only source of revenue is the income generated from microtransactions.
The more the developers earn, the more games we will get. While gambling concerns and pay-to-win scenarios are indeed legitimate issues, one must think about the developers too. Loot boxes and microtransactions are a major source of income for MMORPG developers and the only source of revenue for the ones making free-to-play games. As long as it doesn’t end up being a paywall, a game featuring loot boxes should’t raise much of a concern.