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December 7, 2017 dev

The Drama Saga of Loot Boxes

With major titles like Star Wars Battlefront II and Overwatch employing heavy emphasis on loot boxes and microtransactions, the practice is now under intense scrutiny. Several countries have already ruled loot boxes to be a gambling mechanism, thus putting the games into a more limited and regulated sales genre. But fans are also lashing out and making their displeasure of the practice known, even going so far as to point out that these large companies are profiting off of players with addiction disorders.

 

And while the ESRB does not classify loot boxes as gambling, some lawmakers do not agree. Hawaii State Representative, Chris Lee, has posted a video expressing his concerns regarding loot boxes and plans to declare them gambling mechanism and restricting the games’ sales to people aged 21 and older.

 

 

Loot boxes are popular with Free-to-Play (F2P) and Premium titles because they keep users playing longer and reward those who spend real-world currency to get in-game items. However, the problem lies in the random nature of the box drops and contents. If a user is paying the same amount for a box that can reveal a higher value or lower value at random generation, then inherently, the user is gambling.

 

With increasing development costs, and the rapid rise and saturation of casual mobile games, the problem indie developers are now facing is how to monetize titles without predatory or gambling mechanisms, and reward and retain users. There are several options, all with their bonuses and drawbacks.

 

Developers could change their title from F2P to premium, charging one upfront fee to access all of the game content. Premium titles on mobile have been growing in popularity for this reason. However, many F2P titles still exist, and for some game genres it may be impossible to compete as a Premium title on mobile due to competition and general user expectations. In fact, the opposite is happening with games struggling to gain and retain users. Lawbreakers, for example, is considering changing to a F2P model.

 

Another option would be to release content as larger DLC packs. Instead of releasing items one at a time as loot boxes, bundle content and charge per bundle. Though this may take a tricky balance of offering extra content and keeping the base game experience complete and engaging without DLC. Destiny 2 is monetizing using DLC packs, but they are facing backlash by placing previously available content behind the paywall with new content.

 

Subscription models are another way to monetize. If you are looking to constantly release new content for the same game, asking users to subscribe month to month can help you track user retention and release content equally and fairly. Subscription models have seen a lot of success with family titles, but can receive push back from older users.

 

A final option would be to give users the option to grind away at the game to earn rewards. While some users may pay upfront, other users are willing to put in hours of gameplay to unlock content for free. While this gives away game content for free, it will increase user retention.

 

These solutions may not be the best fixes, and what works for some games may completely backfire for others. There is a turning point coming for this industry and we will be watching closely to see how loot boxes are addressed by players, media, and legislation in the coming future; and how the monetization practices of games evolve to fit player expectations.