Regulating loot boxes has recently become a serious issue with online gaming. The issue is not a new one; however, it has been in the spotlight since the release of EA Battlefront II.
But how did we get to this point where governments are willing to intervene to stop what they consider gambling? What does the future hold for loot boxes? To answer those questions, we will look at the history and evolution of loot boxes.
1870’s – https://www.collectorsweekly.com/tobacciana/tobacco-cards – Randomized beautifully decorated cards were packaged with cigarettes. Companies like Allen & Ginter and Old Judge manufactured baseball cards among other popular sports of the times.
1950’s – https://www.topps.com/corporate/history – Topps began packaging trading cards in packs of gum. Eventually, adding gold foil to prevent counterfeiting on some baseball cards with parents and children wanting these cards like a special rewards system. It became an instant hit with children wanting to get that rare card everyone was in search of. They came out with a super premium and then ultra-premium. Other card makers joined the market making their fair share of money from the same players but with different versions of those cards.
1990’s – 2000’s – The industry eventually evolved with the introduction of Magic the Gathering and Pokémon cards creating trading card games with a randomized mechanism with the possibility of getting rare holographic playing card that children had to have.
1996 – https://www.wsj.com/articles/SB846202501868224000, http://www.nydailynews.com/archives/news/lawsuit-cards-article-1.746692 – Backlash from major news outlets like the Wall Street Journal and the New York Daily News reporting lawsuits under the Racketeer Influenced and Corrupt Organizations Act which claim the practice of baseball card collection should be considered gambling as it encourages children to keep buying packs just to get the elusive big-bucks card, at great odds. An eight year old that was interviewed reporting similar symptoms of gambling addicts. Very little has come from these lawsuits that were brought against trading card companies. In 2013, Magic the Gathering made about $250 million in revenue off their randomized card manufacturing.
2007 – Loot boxes emerge in Role Play Games (RPGs) and Massively Multiplayer Online Role-Playing Games (MMORPGs) like World of Warcraft and EverQuest made it popular in the ever-growing genre.
In China, the Zhengtu Network created ZT Online or otherwise known as Zhengtu which was an MMORPG and free to play as Asian players did not have the money to pay for a game like this upfront so they create a way for them to make revenue by monetizing the game which contained “virtual treasure boxes”. Those boxes contain characters that would do a lot of the work when you’re not playing.
The Asian market has been doing micro-transactions long before the US and Europe. In one year, ZT Online gained $15 million dollars from their micro-transactions. That showed the loot box system worked and more gaming companies wanted to cash in. Most notably Puzzle & Dragons which generated $1 billion in revenue by 2014 after its’ release in 2012. By the end of 2017, it had grossed $7 billion, showing the massive spending in the sort of profitable industry. The loot boxes in the game worked with spinning a crank and see if you got the item you wanted in a very randomized system. Japan eventually deemed the practice as gambling but there have been loopholes that allow this practice to continue.
2010 – Western developers start their own craze like FarmVille by Zynga which made $250 million per quarter in 2011. But it wasn’t about creating games with micro-transactions but adding them to existing free to play games.
Team Fortress 2 became the first major game to utilize loot boxes. It transitioned from a cheap game to buy, to a free game that requires membership for some of their premium features. The loot box system was called crates that had random cosmetics that can be opened with keys. It was a virtual economy and free market where the price of a key fluctuated. Many games around this time on PC and mobile were created to be free to play and relied heavily on micro-transactions to generate revenue.
Around this time, virtual trading card games were created like the Fédération Internationale de Football Association (FIFA) for soccer. You could buy card packs but in video games with building your own team and stadium which the process could be sped up faster with loot boxes which were EA’s start into the loot box craze. Eventually, EA did this to all of their sports games including Madden.
There was some backlash to the game being based on money with the cards and loot boxes instead of a skill based game. Some games expanded to not just characters but actual moves and skills which have become a troubling thing which will grow into a bigger issue.
2012- EA took their success to the next level with Mass Effect 3, the first game with loot boxes offered at launch; however, this game was not free to play. The loot boxes contain gear that could be unlocked through multiplayer play to lower the costs of running those servers. They also worked closely with FIFA to make the feeling of buying a loot box and giving the impression you bought something with value.
Some games like Dead Space 3 didn’t do as well with loot boxes as so other games but many first-person shooters like Counterstrike and Battlefield added weapons to be randomized. Call of Duty, Destiny with Eververse, Gears of Wars and nearly every other triple-A games had micro-transactions in any form from loot boxes to buying packs.
2016 – Overwatch is released and is the one game that made loot boxes mainstream to the public. Overwatch grossed $1 billion faster than most games with their loot boxes by early 2017. You could buy cosmetics with real currency and was considered ethical by many gamers. Other games like NBA 2K and Forza tried different ways to grab people to buy loot boxes like offering them for single player progression among other alternative methods that changed the mechanics of how the game works to maximize profits. There was some backlash starting to form against what were considered gambling practices. https://www.pcgamer.com/amp/belgium-says-loot-boxes-are-gambling-wants-them-banned-in-europe/
2017 – Star Wars Battlefront II, literally made a fake currency needing loot boxes just to unlock a little chunk of the way to unlock a character like Luke Skywalker. Single player was slow and it would take hours to unlock 6 of the characters and all of them it would have taken 4,528 hours which is about a little over 6 months. Buying with the loot boxes was estimated to be $2100 with the chances of the character you want to appear to be low.
https://www.engadget.com/2018/04/13/star-wars-battlefront-ii-revives-microtransactions-for-cosmeti/ There was universal backlash as Disney was concerned too as they owned the Star Wars brand with EA’s stock going down. Bob Iger was even concerned over what was going on as it could damage Star Wars and Disney. EA changed the progression so most characters can be unlocked faster but it wasn’t enough and it was still too slow to unlock them without loot boxes. So EA removed micro-transactions temporarily and stated they would remove them permanently; however, they decided to add them back later and later in March 2018, they announced to change the progression where all characters are unlocked with a new fake currency. Loot boxes are only going to be there for cosmetics and not in the way of progressing through the game.
Governments as a result of this have been debating over if micro-transactions should be considered gambling which the line may blur sometimes. Lawmakers in the US like Senator Maggie Hassan and Hawaii State Representative Chris Lee have been leading the charge in their efforts to not have kids and teens gamble what would be considered gambling according to their argument.
Has EA learned their lesson? Probably not as EA have repeated many mistakes over the years and have been very shady with acquiring companies and destroying them. https://en.m.wikipedia.org/wiki/List_of_acquisitions_by_Electronic_Arts
Now, what does the future hold for loot boxes? Well, it went from being born a decade ago to being experimented on many platforms of gaming to experimenting with the mechanics itself to now a debate over the fate of loot boxes. The mechanics might be experimented more until it is perfected ethically and be approved the gaming community, but it might be there for a while before any regulations are put in place.
It can either continue to be an abused practice or be regulated like casinos in Las Vegas. But right now it is currently in a state of limbo where the fate hangs in the balance. It is your choice to decide the fate of a mechanic that have certainly shaped micro-transactions as a whole. If you are tired of. The free to play games turning into pay to play, speak out against this practice. Please feel free to use this forum to share your thoughts.