Whether or not you are an avid gamer, there’s a big chance you will have heard the words “loot boxes” several times over the past year. The subject of loot boxes has garnered plenty of discussions and international controversy since its popularization earlier this decade, causing massive outrage in more than one occasion and even culminating with the controversial items being banned in Belgium.
For those that are not too familiar with loot boxes, crates, booster packs, etc., we’ve put together a small guide that will catch you up on how the gaming world’s most controversial virtual items came to be.
What are loot boxes?
Loot boxes are virtual boxes that contain a randomized selection of in-game items that can range from game-changing equipment such as weapons, armor, and abilities, to hidden characters or customization options for a player’s character.
Loot boxes are usually awarded as a prize to players for completing certain in-game tasks, such as leveling up their character, beating a particular stage, or during multiplayer mode gameplay, however lately special boxes are also being awarded to players for watching streams of eSport events.
While at first glance loot boxes may seem like a fantastic new system to deliver DLC and new skins to games – and they do have quite a bit of fans – they are not quite the gift to gamers that they appear to be. In reality, loot boxes are usually a form of game monetization that focuses on players purchasing boxes – or the keys necessary to open them – in order to get ahead.
Picture Source: PCGamesN
Loot box monetization can come in many different shapes and forms, with the more ethical systems allowing players the possibility to earn all of the items that could be purchased through loot boxes with continual play – making the purchase of boxes merely a shortcut. Other systems instead offer those goods exclusively to those who are willing to pay, often giving these players an advantage over those that are playing without purchases.
Loot boxes have become so popular that practically all of the biggest sporting titles in the world are now using them, often in the form of trading card systems. Their popularity has even managed to expand all the way to other sister industries like the online casino industry, who have taken a lesson from video games and adopted treasure chests in their bonus systems- providing random bonuses to keep their players engaged and betting.
How did loot boxes come about?
The origin of loot boxes can be traced back all the way to the analog era, where baseball and basketball trading cards managed to become a billion-dollar industry. Collectors would purchase a pack of cards without knowing which ones they would receive, hoping that they would manage to unpack one of the valuable limited-edition cards from their favorite players.
The first known instance of loot boxes in video games was all the way back in 2006 in the Chinese free-to-play MMO ZT Online, better known as Zhengtu. Thanks to their innovative approach – which accounted for the fact that young players in Asian countries usually do not have the funds to purchase expensive titles – players flocked to play Zhengtu. ZT Online would go on to report revenue of over $15 million a month within a year.
The free to play approach quickly became a huge success in Asia, with games like Puzzle & Dragons using this monetization method to earn over $1 billion, a result that turned plenty of heads in the west towards taking the same direction.
While it took a few more years for the video game industry to adopt this monetization method, the mobile gaming industry made it its bread and butter. Social network game developers like Zynga and King developed games to be played for free on Facebook, including micro transactions that would help players accelerate their progress or provide them more lives they’d otherwise have to wait a few hours to get back. This model was, of course, a smashing success and defined the way that most mobile games have operated since.
Taking notice of the success story of Asian MMOs and mobile games, Valve Corporation – the company that runs Steam – took a page from their book in order to save an underperforming Team Fortress 2 back in 2010.
Team Fortress 2 has initially been introduced as a full cost title but was struggling to bring in enough players to populate the game. In order to draw more players to the game they decided to transition it into a free to play title, adding crates that could be unlocked by buying keys as a way to monetize the game. The gambit paid off wonderfully, with Valve reporting over 12x the amount of players shortly after.
Taking notice of the success of the first microtransaction MMO game in the west, dozens of other companies jumped into the fray. Star Trek Online and Lord of the Rings Online both launched under the same dynamic within a year, and EA introduced the hugely popular “FIFA Ultimate Team Mode” shortly after, in which players use virtual trading cards to build their team.
Loot boxes today
After the success of FIFA’s Ultimate Team Mode, EA applied the same micro transaction strategy to practically all of their titles. However, when they did so for the long-awaited Star Wars title Battlefront II they incited one of the biggest blowbacks in gaming history.
EA devised a system that required gamers to play for hours at a time – often performing repetitive tasks – in order to unlock the most iconic characters of the game, including Darth Vader and Luke Skywalker, or simply purchase them to receive them immediately. Not only that, but players that purchased items would have a huge advantage over those that did not, creating hugely unbalanced gameplay.
The huge negative response to these features, which included the most downvoted comment of all time on Reddit, forced EA to change its approach and eliminate micro transactions for the time being, but with the intent to introduce them later.
Meanwhile, in addition to growing fan negativity regarding loot boxes, a debate has started around the world on whether this type of dynamic constitutes as gambling. Given that players will have to pay money to receive a randomized reward – which may contain either valuable items or others of little value – many governments are cracking down on loot boxes as they incite gambling in underage gamers.
With all the controversy surrounding these items, it is hard to see what the future will bring for loot boxes. However, with the amount of money they are making for developers, it is hard to see a future where gaming fully moves away from them completely.