When I began gaming in 2003, there were no strings attached when buying a game. You threw a disc in the PlayStation and played. One of the concerning industry shifts in the last 10 years, however, is the increasing monetization of video games. Be it released post launch, skins, and guns that could have easily been in the base games, or the prolific “pay to win” features of loot boxes, the gaming industry is moving into dangerous waters.
The last few years have seen increasing regulations on gaming due to irresponsibility and greed. Loot boxes are a fast-growing trend. If you are a parent scratching your head, saying, “Loot Boxes?” hang on to your hat. I’m going to run you through the history, features, and issues I see with them. The topic of loot boxes is especially concerning to me as a gamer. And my hope is this Parent Guide to Loot Boxes helps explain why these mechanics may be harmful to kids.
Why Write A General Guide for Parents on Loot Boxes?
I began gaming at the age of 7. I do not consider myself at the top echelon of gaming, but I do feel that I have a good idea of what’s trending. Video games are a hobby that I love and care deeply about. I look at Loot Boxes as a stain on the gaming world.
They have lowered the standard for what we accept as a complete game and have tricked people into spending more money on a game than necessary. Many games now have functions that make it almost impossible to achieve high tier equipment without buying loot boxes.
Loot boxes are trying to be passed off by game development companies as a virtual equivalent to “kinder eggs.” Kinder eggs, however, do not have mechanical functions that are designed to be addictive. This battle between game companies is being slowly won by legislative bodies, which are going on the offensive and trying to impede such mechanics in games. Others, like the US, are moving slowly to ban loot boxes and the like only in games that target children.
As parents, it is challenging to stay up to date with the latest gaming trends. My hope is that this article helps you understand loot boxes and how they function within the video games your child plays .
Has Your Child Been Asking to Join Steam? Get My Parents Guide to Steam FREE!
Loot Boxes: A General Guide for Parents
We are going to cover loot boxes in depth. First, we’ll look at how loot boxes came into being. I want to keep this Parent Guide to Loot Boxes informative, but not overwhelming. So, the history of loot boxes here is by no means comprehensive, but it should give you a general understanding of the advantage gaming companies take as they use loot boxes. We’ll also look at what governments are doing about pay-to-win functions.
The Beginning of Loot Boxes: Microtransactions
Microtransactions are the beginning of our story. They were most popular in games that had high levels of character customization. You paid real world money to buy “clothes” or skins in-game to differentiate your character from others. There was no real harm in it, as it had no affect on the winnability of a game. It was just a way for you to set yourself apart. As mobile games became popular, microtransactions began affecting gameplay.
Since many mobile games are free-to-play, a popular type of monetization was microtransactions. For game developers, there were two business models to choose from–either fill your game with annoying ads or offer ways for a player to experience the game in a more enjoyable way.
Games like 8-Ball Pool by Miniclip allow players to buy pool cues with different strengths by offering in-game currency in exchange for real money. You win in-game currency by beating opponents, but good pool cues cost more in game credit. This means players are more likely to spend real money to purchase something to help them play the game with better success. We call this paying to win.
Paying to Win
This whole idea of paying to win, or paying to increase your chances of winning, is what makes loot boxes such an easy option for game developers. I am not one to make accusations against Millennials or Gen Y, but gamers don’t like grinding the way they used to.
The term “grinding” is common game slang for doing boring or monotonous tasks in-game to level up.
There is an aspect of instant gratification in video games. And microtransactions opened an alternative route to spending hours to get that one prized item or the next level.
Microtransactions are not a new concept. They have been around for over 12 years. I don’t think microtransactions are necessarily bad. Customizing a character can be fun. If a game is free, paying $5 for a cool skin might be a worthwhile investment for an avid game fan.
Most of us can understand the fact that businesses need money to operate. This means free games have to bring in income somehow. But many games are speaking out because we are now seeing large gaming companies offer microtransactions on games which sell for $60+. One prime example of this is with Electronic Arts or EA, for short.
Money, Money, Money!
FIFA is arguably one of the most played games in the world. I played soccer in high school and we were all hooked on it. If you really want to see the beginning of loot boxes, a quick look at FIFA tells the story well.
In FIFA ’09, we saw the release of FIFA Ultimate Team. This was an aspect of the game where players could create their own team and play against other people’s homebrew teams online. You acquired players through “card packs,” which are like virtual baseball cards… but for soccer. You won card packs through normal gameplay or through online games against others.
Someone at EA eventually got smart and decided to sell these card packs for a small price–a microtransaction. Players did not have to purchase them, but now they could choose to purchase them instead of earning them. These packs were in a tier system.
- Bronze- A small chance of getting a high-level player
- Silver- A better chance of getting a high-level player
- Gold- A high chance of getting a high-level player
One of the sleazy parts of this system is the producer of the game had control over your odds of winning. This did not unleash the floodgate of loot boxes initially, but it was a way for a company to make boat loads of money on top of the $60 game they sold you.
The trend was now set. Loot boxes were standard in the gaming industry with no sign of going away.
Loot Boxes: Spreading to More Games
Now we see popular franchises like Call of Duty, Overwatch, and Kingdom Hearts using loot boxes. There are even ways to earn money from loot boxes. Counter-Strike: Global Offensive (CS:GO) let players sell the skins they opened in loot boxes for real money. An online market sprang up on Steam where you can buy some skins for hundreds of dollars.
I personally had friends who would spend a lot of money opening loot boxes, hoping to come out making money. This is gambling in my book. Seeing some of my friends’ bank accounts fall victim to CS:GO drove me away from the game.
Loot boxes and the dependence that games have on them has caused much uproar from the gaming community. In 2017, Middle Earth: Shadow of War made its debut and tried to sneak loot boxes into the game. People were so angry that they rolled the loot boxes back until after the game release.
To my surprise, the loot boxes in Shadow of War are entirely optional and do not affect gameplay at all. The game is a masterpiece and many gamers that I know really enjoy it despite loot boxes being there. Warner Bros. even hid the mechanic deep inside the menus, making it invisible for those who do not want to use it.
This is what many people want from loot boxes, but it is not always so.
Overwatch is a popular video game essentially built around the loot box system. Watching the animation for Overwatch’s loot box opening is unsettlingly–close to watching a slot machine. Each item category is color-coded, and when you open the box the corresponding colors of the categories you will win fly up into the air.
For a split second, the gamer wonders what it could have in store for her. The coins then land on the ground with fireworks and cheering, revealing what you have won.
Many slot machines, while not exactly the same, use all three of these brain teasers. You pull the lever and something happens (a “cha-ching!” noise or something like that), then they put you in suspense by slowing down the wheels. Lastly, they reinforce your decision to play and beckon you to play again.
Loot boxes are complicated in many ways. Each game calls them something different, they don’t all work identically, and they don’t all give the same type of rewards. If they did not make money, they would not be put into games. The reality is that these mechanics are huge money makers for gaming companies.
A quick Google search will reveal:
- EA made $1 billion in Q4 of 2019 from microtransactions.
- Activision/Blizzard (the people who make Call of Duty) made $956 Million in Q1 on microtransactions.
- The presence of loot boxes grew from 4% to 71% between 2010 and 2019.
- A 2018 study by the UK Gambling Commission revealed the more loot boxes someone purchases, the more likely they are to become a problem gambler.
Governments Are Starting to Pass Legislation on Loot Boxes
The world of loot boxes is driven by the desire to increase the bottom line. Therefore, more games are adopting this addicting style of monetization.
The Children’s Commission in the UK released a 37 page report which lays out concerns when it comes to loot boxes. The US Congress is moving on these same concerns as well. But COVID-19 and recent civil unrest in the United States have slowed progress. Bill S 1629 was introduced into Congress on May 23, 2019. It seeks to regulate pay-to-win features. You can help this bill get passed by contacting your representative today. Right now, this bill is only showing it has a 2% chance of getting passed! Our congressional leaders need to hear from parents!
There is a difference between the typical loot box and a pay-to-win mechanic.
A pay-to-win mechanic is a way for a company to milk a game for revenue. In short, you buy a $60 game with a glass ceiling on progression in the multiplayer and you pay for that progression throughout your game time. Pay-to-win mechanics are best summarized by EA’s Star Wars Battlefront II. One hero in the game took up to 40 hours of gameplay to win. Or you could just buy loot boxes until you get your Luke Skywalker.
Now, EA is undoubtedly able to control how frequently a person wins that specific character in a loot box. This means they can adjust the rarity, and thus, the likelihood that someone would end up buying it instead. Pay-to-win mechanics are the target of Senator Josh Hawley’s bill to regulate such features in games.
Senator Hawley’s 2019 bill titled “A bill to regulate certain pay-to-win microtransactions and sales of loot boxes in interactive digital entertainment products, and for other purposes” seeks to regulate pay-to-win features and loot boxes of games targeting minors. They will not be banned completely, just from games targeting kids.
This means that “M” rated games will probably not be on the docket for regulation. There are also rumors of loot box warnings appearing on the ESRB rating on a title. While this is a far cry from the type of regulation that Belguim and the UK have, I feel it is a step in the right direction.
But parents, legislation like this only happens when you call for it. Don’t be afraid to rally and cry out for changes that you see need to be made to keep new technologies safe for your kids. Be excited about the opportunity to take part in these new guidelines as they are being formed.
The Bottom Line
Video games are among the newest of industries. Just like the issues surrounding social media companies and data usage, game companies are coming under scrutiny for their ethics.
Games are meant to be entertaining, fun, and satisfying, things I feel come under threat when loot boxes become the focal point of a game. No gamer denies that businesses need to make money, but I would much rather pay more for a game that does not have loot boxes than a game that does.
When it comes to the topic of kids using loot boxes, I would advise trying to steer clear of them. There are some amazing games that do not use loot boxes that are fun and engaging. More importantly, I would explain to someone that loot boxes are a scam and good games should not need loot boxes to make them fun.
I do not have issues with cosmetic microtransactions using real world currency. However, I do have an issue with using loot boxes as a ploy to get consumers to pay more than is necessary for a game. I also have an issue with the lack of perception on the part of companies to market these to kids.
We need to watch out for our young gamers and instill in them an understanding of how they should be treated by large businesses.
I hope you will encourage your kids to play games that are made by smaller independent companies who do not need loot boxes to make their games “fun.” I also hope that you will contact our political powers to regulate these potentially harmful gaming mechanics.
If you do not know a lot about gaming, don’t worry. Approach it just like you would any new activity: Dive in and learn! Gaming is a fun and exciting world that is for everyone, and the best way to understand games are to PLAY them.
Kaleb Nieman is a 2019 graduate from the University of North Dakota. Working for the family business by day, and gaming by night, Kaleb games when he is not working. His favorite genre of game is the city builder, but he enjoys anything he can play with friends. He helps his friend from college run an online gaming community of 250 members from around the world. When he is not gaming, Kaleb works on airplane models and reads history books. A passion for stories and digital media is the force that drives Kaleb towards games each evening.
Sign up for my newsletter and get Tech Talk Conversation Cards FREE!
As parents we know we need to talk to our kids about technology, social media, and online safety. But, many times we just need help getting started. Tech Talk Conversation Cards can help. You’ll find over 50 questions on technology, social media, cyber-bullying and sexting.