The gaming industry has grown to be enormous in the recent decade, and mostly because of a new addition that started in 2005 by Microsoft: microtransactions.
Microtransactions originally started simple: you could buy items directly for 50 cents here, a dollar there. It allowed players to spend a little money to enhance their experience, but halfway around the world, a game called MapleStory introduced the "Gachapon Ticket," which costed 100 Japanese yen each. This was the start of a business that would grow to be worth billions of dollars less than two decades later.
The loot box model wouldn't reach the US for several years, though. It was in 2010 that it started appearing in Valve's Team Fortress 2, where players could purchase in-game keys to open crates found by playing the game. And once Team Fortress 2 became a free-to-play game the next year, its playerbase increased twelvefold. Over time, many originally paid games transitioned to become free-to play, monetizing them through microtransactions and loot boxes.
It makes sense why this model is so lucrative: by engrossing the player in the game and then offering microtransactions on the side, game companies gain a huge amount of demand from little to no extra effort. With the addition of loot boxes adds the lottery aspect to the mix, there is even more reason for the player to pay more and more, even when the items received are purely cosmetic.
With no regulation in the United States on loot boxes, the business will continue expanding. However, there has been discussion about whether these microtransactions are a form of gambling due to the "lucky" nature, and the marketing primarily to teenagers and kids. So if you're itching to click that "Shop" button in Overwatch or League of Legends, it is something to think about.
https://www.wired.com/2005/03/a-little-moolah-goes-a-long-way/
https://www.npr.org/2019/10/10/769044790/loot-boxes-are-a-lucrative-game-of-chance-but-are-they-gambling
Much like you said Robert, I have begun to see microtransactions in many games such as Madden or Battlefield. I believe that the idea of microtransactions should continue to be unregulated though and not be considered gambling. Even though every time you buy a loot box, you don't know what item you are going to get, you are in fact guaranteed some sort of item for your money. That 100% guarantee of receiving some sort of item makes it so it cannot be labeled as a form of gambling. I also believe that just because it is primarily marketed to kids doesn't make it wrong. After all, kids and teenagers are the primary consumers of products and games made by these companies, so they are simply marketing towards their target audience.
ReplyDeleteGambling's legal definition does not include whether or not the gambler receives an item, it only states that it is " accepting, recording, or registering bets, or carrying on a policy game or any other lottery, or playing any game of chance, for money or other thing of value." Therefore, loot boxes could very well be considered gambling. Additionally, the problem with marketing to kids is that kids don't have a mind that rationalizes marginal utility - they are concerned on what is "cool" or "good," regardless of the price. It's illegal for a minor to buy lottery tickets, so why is it legal for a minor to make microtransactions (playing almost the same game of chance)?
DeleteMicrotransactions are increasingly becoming a part of gaming. For instance, look at Clash of Clans. The most successful players, building the strongest players, practically have to spend large sums of money on micro-transactions in order to build a strong base. Interestingly, if micro-transactions get so far out of hand eventually there will be a point where video games have more of the "micro-transaction" side than the actual "game" side.
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