Controversial ‘Loot Boxes’ rake in billions annually for the gaming industry: is this the beginning of their end?
By Ryan McEwan
Microtransactions - or Loot Boxes - are the “big evil” in the video game industry right now. The gaming industry is worth a reported $135bn worldwide (2018) and £5.4bn domestically (2019), consistently asserting its financial dominance within the entertainment world with growing numbers every year. According to the BBC, video games make up more than half of the UK’s entire entertainment market, bringing in more revenue than video and music combined.
Broken down, it is the mobile market that generates the most revenue for the video game market at 47% ($63bn worldwide, £1.21bn domestic) and, interestingly, consoles have seen a 15.2% increase in revenue to $38.3bn worldwide; the largest increase of any sector within the industry in 2018. These are all important pieces of context when discussing the topic of Loot Boxes - an umbrella term for discussions over Microtransactions, Pay-To-Win & Pay-To-Play games, Season/Battle Passes, Expansion Packs, and Locked Content.
The general modus operandi for the implementation of Loot Box/Microtransaction systems in the gaming industry is to make as much (extra or continuous) money from the player after the fact of having purchased a game in the first place. This method is not new within the industry; more content for more money after a game has been released has been around for the better part of 15 years now.
One-off purchases to bring an additional handful of hours and new story content to an already completed game a year, on average, after the title had been released, generally sold for prices in the range of £7-£30 depending on how much content is offered. Then, near the end of the last decade, games like Fifa 09 and Assassin’s Creed 2 would start to steadily offer up Microtransactions (endless additional payments) and Pre-Order Bonuses (extra content for paying more for a game before it was released) to generate additional money.
As time progressed, and mobile gaming began to emerge, gaming was becoming a dominant force within the media industries and becoming increasingly prevalent within celebrity circles. It’s now become normal to see your favourite football player, for example, playing the game you also really like to play; gaming was becoming popular and also accessible. Now, the inclusion of Loot Boxes and Microtransactions have become as commonplace within video games as having a Netflix subscription is; they’re everywhere and they’re completely unchecked.
Then in 2017, video game publishing goliath Electronic Arts (EA) - who already have a reputation among gamers as being one of the worst companies in America and are a spearhead for the advocacy of Loot Boxes in video games (they popularised the use of them through their Ultimate Team mode in the annually released Fifa games) - released Star Wars Battlefront 2 to completely, and infamously, abject reception. The controversy around the game centred on the aggressive usage of Loot Boxes to allow for players to pay to have a statistical advantage over other players (Pay-To-Win) and (deliberately) locking fan favourite characters like Luke Skywalker and Darth Vader behind egregious amounts of heavy work and grinding (or you could just pay for them).
Gamers themselves did the maths and found it would take 40 hours of gameplay to unlock one single character, or your choice of 4,500 hours of gaming or spending $2,100 to unlock everything in the game, all of which was purchasable and locked behind paid Loot Boxes. These boxes were available at pre-launch (players were given access to the game early) so effectively if someone dropped the cash they would have a substantial advantage over other players at launch by unlocking better weapons and characters with real cash.
When gamers back-lashed at EA they responded in such a mindless manner that it became the most downvoted comment in Reddit history. It opened up a can of worms that involved UK politicians, state senators and the gambling commissions of countries all over the world to start taking action against Loot Boxes and essentially exposing the entire industry on what was years and years of exploitation and strong-arming players (namely children) into spending obscene amounts of money on Loot Boxes; algorithmically designed to not give the players what they want with an aesthetic design to entice the player into endlessly rolling the dice and spending money on something they were never going to get. Globally, Loot Boxes are making £21bn (2018 figure) and are expected to increase to £35bn by 2022.
Why this has become the hottest debate raging within the video game industry is because of the ethics behind how companies like EA, Ubisoft, Activision, Blizzard and Epic have Loot Boxes/Microtransactions crammed into every game they make and how in some instances there is constant antagonising that the boxes are there and you can buy them (as explained with the Star Wars Battlefront 2 example) or by restricting/tying progression to the dangling carrot of a Loot Box. Ever since the Battlefront 2 controversy, discussion and research into the issues surrounding Loot Boxes, how they’re presented to the player and how the player is affected by them has increased dramatically and further exposes a devious side to the video game industry.
Games like Fifa and NBA 2K are two game series that specifically have children aged 11-16 as their demographic and give them free reign to purchase Loot Boxes without any regulation. The issue surrounding these games is that they are age rated for all ages (E for Everyone or 3+) so as to say these games are safe for everyone to play, but as exampled earlier, they are not safe for children as they are being coerced by these games to spend real money gambling on whether they’ll get a desired player on Fifa or not. Games in the UK are rated by the PEGI organisation and, astonishingly, their age ratings do not factor gambling-like elements in games until they hit a 12+ rating. So right from the get-go, kids are being put at risk because even if a parent pays attention to age ratings in games, seeing a game age rated at 3+ will not cause any concern, when clearly it should.
Things have developed within the discourse that the NHS is warning against Loot Boxes, former gambling addicts are warning against them, and now even those within the academic world are weighing in and conducting research on the negative effects brought on by Loot Boxes in video games. It is well within the realms of possibility to suggest that it is a war that is being waged against Loot Boxes and it is producing mixed results. Many modern games are now removing Loot Boxes from their games or turning them away from Pay-To-Win to cosmetic only (whilst still being sold for cash, this is a step in the right direction), to many new game announcements stating from the get-go that Loot Boxes won’t be in their games.
The war is raging on and some things are changing, but the financial numbers keep increasing. Is this a battle that can’t be won or is it just a matter of time?