Limited Edition Loot Boxes: Problematic Gambling and Monetization
This year saw the release of the highly anticipated new competitive and team-based game, Overwatch, by Blizzard Entertainment in May. With a successful beta of 9.7 million players and over 15 million players before the end of the summer, the game was undoubtedly a resounding success for the AAA developer. With an easy to understand buy-to-play model, a huge cast of memorable, diverse, and likable characters, and enjoyable gameplay that builds off the likes of highly successful games such as Team Fortress 2 it is easy to understand why the game has quickly drawn such a large following and player-base. Much to the surprise of these players was the release of Overwatch’s first limited-time event — typically some of the most highly anticipated times for players in many games—so soon after release and themed around the Summer 2016 Rio Olympics. This event, however, raised much controversy on the use of loot boxes as a monetization strategy when access to these items is limited. While they are often — but not always — optional means of acquiring desirable items in games, the introduction of a limited-time event is problematic as these loot boxes that are for all intents and purposes: gambling.
As someone who was looking forward to Overwatch with great anticipation I was relieved to know that all of the cosmetic items available — emotes, victory poses, highlight intros, and skins — would be unlockable without a single purchase necessary. For every level gained through quick or competitive play, a loot box would be rewarded containing four items. As time goes on these rewards are more often than not duplicates of items I have already acquired, of low rarity of desirability, or are simply not the exact item that I was hoping for. To combat this, Overwatch, allows you to purchase loot boxes in various quantities, allowing you to gamble for the chance to receive the items you want at a quicker rate than if you were only receiving one loot box for every level. Alternatively, if a loot box awards you an item you already have you are rewarded with coins that can be used to purchase items outright — or a box may simply reward you with a literal pile of coins to use as you wish.
So what seems to be the issue with the strategy that Overwatch uses? It is true that they have followed on their promise that all content within the game is freely available and unlockable without any purchase whatsoever, including the limited edition items. However, by adding the temporal aspect of an end date to the event and by making the change to not allow these limited items to be purchased with coins—while also allowing duplicates to be rewarded—there is an increased sense of pressure that could be felt if a player is not receiving the item they want as the deadline draws nearer. This is combined with a sense of unknown as developers refuse or are unable to comment on if these changes are permanent or if players will ever have an opportunity to receive these items in the future — whether this is intentional or not to increase the pressure to purchase is unknown—this uncertainty is best highlighted in a quote from Overwatch’s Game Director, Jeff Kaplan:
…if the event is received well (my impression so far is that it is being received well once you remove the debate over the items not being available for credits), we will run it again next year. Our Summer Games are on a yearly schedule — not a 4 year schedule. Our plan would be to have the items available again when the event recurs. Perhaps we add new content to it as well? We’re not sure yet… we’re seeing what works and what doesn’t.
We’d like to give the event more time and see how people feel as it wraps up. Maybe people will be feeling differently at the end of the vent. Maybe not.
Is the need to create rare and unique items a sufficient justification for shaking up an already profitable monetization strategy? Is a change like this meant to increase sales by pressuring players — even if it is a passive pressure — into purchasing more loot boxes out of fear of missing out on a desirable item? If a strategy like this is going to be used, should regulation and oversight be introduced for online “gambling-like” practices? This strategy was met with much controversy by the community at large, with many posts on official and unofficial Overwatch community forums detailing the frustrations of players. With the recent reveal of the Overwatch Halloween update and the introduction of more limited edition loot boxes, these questions must be raised again and Blizzard’s strategy re-examined.
What exactly makes these loot boxes a form of gambling? There are many parallels between loot boxes and traditional forms of gambling — such as slot machines. In the most basic sense, the two operate on RNG — or random number generation — principles: when a loot box is awarded to a player or an individual places a coin into a slot machine, a random number is generated and pays out the corresponding rewards (or lack thereof) based on the number generated. These results are truly random and there is no guarantee that you will ever get the result that you want, no matter how many times you open a loot box or put a coin into a slot as each generation of a number is independent of all past or future results. Loot boxes in games often make use of virtual currencies for their purchase as well — a tactic similar to the use of chips in casinos — doing so disassociates players from the amounts they are spending. In addition, the act of opening a loot box is typically a dramatic and visually appealing action, creating an entertaining ‘scene’ for the player to benefit watching. It is from these facts that we can begin to understand the purchase and opening of loot boxes to be considered gambling — especially when they are purchased with real-world currency.
One area of divergence between traditional gambling and loot box gambling exists in the regulation and oversight of the two. Specifically in the lack of any regulation surrounding loot boxes as a form of monetization. All developers have a right to monetize their products as they see fit and an emphasis is always placed on players that the choice to purchase is for them to make. However, when that strategy is one so closely tied with gambling, an area that is traditionally government-regulated and monitored and with substantial socio-economic and mental-health detriments, we should be critical of the lack of oversight in this area.
To date, when governments have made attempts to regulate loot box gambling, these regulations have been skirted due to the fact that while there is transfer of real-world currency from player to developer there is no transfer of real-world currency from developer to player. This is problematic when you consider that some players may be suffering due to gambling addiction. Either because they are unaware that they may have purchasing impulse control issues or due to a lack of oversight into player purchasing patterns or limits. This is a difficult area to navigate, however, as who is the developer to say what an appropriate cap for purchasing is, or whether or not someone is making purchases in a clear state of mind.
To Blizzard’s credit and following from statements that Game Director Jeff Kaplan has made, they did change their limited edition loot box system based on feedback from players. Limited edition items are no longer only acquired through loot boxes and can be purchased with coins earned previously or during the event. However, the limited edition skins that are built on entirely new models (such as Junkrat’s, Mercy’s, and Roadhog’s) carry a hefty price tag of 3,000 coins. While options now exist for player’s who do not want to make any loot box purchases to acquire these skins, it is undeniable that this may not be achievable for all players. Is this a fair middle ground for this issue? Does this truly restore the sense of freedom of choice that players have when choosing whether or not to purchase loot boxes — especially as the clock ticks down on limited-time events.
While it is true that players can now purchase these items at any time during the event, there are few players with large masses of coins stored and not all players have the necessary time available to them to play to earn such a large amount of coins. As stated, however, the developers wish to create a culture of unique and rare items for these limited-time events, but does this really matter when it comes to virtual items such as this? No labour or profits are lost whether 100 or 100,000 of the Mercy Witch skins are rewarded and there is no virtual economy to maintain in a game such as Overwatch. With this understanding, the issue of a pressure to purchase still remains for these items, even if more accessible than they were in previous limited-time events.
When it comes to loot box gambling, little has been said from developers in regards to their stance. Developers often remain silent when users bring up the question of whether or not the larger community wants gambling in their video games. When they do speak up, it is to say that profits would be prioritized over accessibility for regions looking to regulate loot box gambling. While Blizzard and Overwatch have made a subjective change for the better in terms of their strategy, the issue still remains that not all players have equal chances of obtaining limited-time items and therefore may engage in an unregulated and potentially damaging form of gambling in an attempt to gain these items, with no concrete expectations or known odds of ever receiving them.