The Art of Video Game Gambling
Christmas season is here, and video gamers will encounter one of the gaming industry’s most controversial tactics in years: the “loot box,” which is an in-game reward that is also for sale. Loot boxes are featured by many popular games including Activision Blizzard’s “Call of Duty: WWII,” “Overwatch,” and Ubisoft Entertainment’s “Assassin’s Creed Origins.”
In video games, a loot box is a consumable, virtual item that can be redeemed to receive a random selection of other virtual items, ranging from the most generic to the rarest of goodies. Items can be characters’ skins, voicelines, emotes, and other virtual game-themed derivatives.
Players can purchase loot boxes with real money or in-game currency which usually requires great time commitment and are granted upon completion of certain tasks. “These videogame models are the perfect price discrimination where the gamer decides how much to spend,” commented Jefferies analyst Tim O’Shea. “Some people opt for the first-class experience and others want to fly coach.”
Loot boxes are specifically designed to look like digital treasure chests or gift-wrapped presents, hoping to evoke players’ excitement and curiosity for what’s inside the box. In addition, loot boxes change their designs at different times of the year to cater to different holiday vibes. For instance, Blizzard’s “Overwatch” has Christmas-themed event Winter Wonderland, which lasts for only three weeks.
The boxes use special algorithms to calculate the percentage of a rare item to be given to the players. Since there is no guarantee a box will yield a certain item, and some items appear only for a limited time, players are more likely to spend at holidays in fear of missing out special items.
Critics have called loot box a “trap” that lures gamers into the cycle of spending. Many people have compared loot boxes to slot machines — players purchase the loot box hoping to get the desired item, but too often, they don’t and have to repeat the process.
The strategy through which loot boxes work is commonly known as microtransactions. In 2017 alone, microtransactions are expected to exceed $3 billion in global revenue of console games, according to Wedbush Securities analyst Michael Pachter.
Critics worry that children often lack impulse control and won’t understand the maths behind every loot box, making them highly susceptible to the cycle of repeated spending.