Technology — December 12, 2018 at 5:46 pm

Paying to Play

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Screenshot: Blizzard Entertainment
The result of opening a loot box from Overwatch. The contents, including skins, are completely randomized each time you open the box. Screenshot courtesy of Blizzard Entertainment

By David Tuchman

Triple-A games are constantly becoming larger in every way, with better graphics, more open worlds, more memory and more replay value. Not surprisingly, these immersive behemoths are becoming more expensive.

But unlike just a few short years ago, the costs don’t stop at purchasing the game itself.

Rather, video game developers have created a way to continuously monetize games in the form of “games as a service,” which essentially means it’s not a one-stop purchase.  It requires continuous monetary contributions not dissimilar to paying for software month-by-month.

Otherwise known as microtransactions, these services act as in-game downloadable content that players can purchase. The largest contributor is known as loot boxes. These loot boxes are digital containers that players can purchase with real or in-game currency. The trick is that they don’t know what it contains — it might be a new character costume, or a new set of weapons, or just a funny character emote.

In other words, it could  be really great or it could be totally pointless, but you don’t find out until you pay for it.

The idea to put these digital grab bags into video games didn’t happen overnight. Jonathan Ore, a senior writer who covers video games for CBC, says that it started in Japan and has blown up in the last year as more and more companies are adding them to their games.

“The system has been in place for several years already in Electronic Arts sports games like Madden and FIFA… That was the first major success for loot box mechanics in triple-A video games,” Ore says.

“It really got into the spotlight last year when Star Wars Battlefront II kind of showed how they were using this system because it was an easy way to put it into frame, ‘like here’s how much money you would theoretically put into the system or how long you need to play to unlock Darth Vader,’” he says.

Ore says that the most notable point of origin for loot boxes comes from mobile and free-to-play games. He adds that many games like League of Legends or Fire Emblem Heroes are free games that have similar systems. There are hundreds of characters to unlock and the player has to play the game – or pay – to receive special currency. They can then use it to take a pull on the virtual slot machine and hopefully receive the character or cosmetic item they want.

“That had been kind of the system that has been driving the mobile market…to many, many millions or potentially billions of dollars and so slowly those mechanics have been finding their way into console games which already cost $80 Canadian upfront to [purchase],” Ore says.

Kristopher Alexander, professor in game programming at Humber College, says that over the years since they were first introduced, the ways developers incorporated loot boxes into games have changed.

“They were different ways of integrating what are now called loot boxes. Some of them were generally cosmetics… now they graduated into what their name sounds like where you don’t know what’s inside, you open it up and sometimes you win and sometimes you less win,” he says.

Alexander says it’s important to analyze skill gaps in players when considering how a developer incentivizes them to buy loot boxes.

“The quick answer is… pay to win,” he says. “This is a larger question than the loot box controversy… a lot of games, classic games…are becoming easier to get in because it is more lucrative to have people playing than to just have the highly skilled playing. You are seeing the divide between the skill gap being addressed via loot boxes.”

“Listen, you can grind in a dungeon for 20 hours and get good, or ‘you don’t have those 20 hours? Do you have $20?’ Pow!’” Alexander says.

When you don’t know what you get until you pay for it, loot boxes don’t seem worth the financial risk. However, game publishers view it very differently. In fact, in some cases the money earned from them exceeds the money earned from the base game itself.

According to Juniper Research, loot boxes and related microtransactions alone are a $30 billion industry as of this year and they are projecting it to balloon to $50 billion by 2022. In 2017, one of the biggest video game developers in the world, Activision-Blizzard, raked in over $4 billion of the $7.16 billion total they earned in what they called “in-game net bookings,” according to the company. Of the $4 billion they earned through in-game purchases, $2 billion came from the mobile game Candy Crush alone. In addition, Electronic Arts, makers of the FIFA and Star Wars franchises, reported $787 million for what they call “live services”.

However, for the average player, it could mean continuously spending money or playing for hours on end in order to get that right in-game item.

“Depending on the how the mechanics or how the economy is balanced like if I don’t pay as much money a month to pull on the slot machine, I’m playing literally for hours without getting anything of note or any kind of new shiny thing,” he says. “Games are designed around a feedback loop… play for while then get a cool thing, play for a while, get a cool thing, and it’s like if you give a few dollars you can get a cool thing every few minutes as opposed to every hour.”

In terms of actual dollars being spent, it differs from person to person. Nicholas Parsan, a long-time gamer and Carleton University student, says he spent upwards of a thousand dollars on loot boxes and microtransactions.

“I’m pretty tempted,” Parsan says. “If it’s limited season say like the Halloween thing… how they have special skins, I’ll try grinding for first bit for it.”

He says if he doesn’t get the item he wants, and he really wants it, he’s likely to just purchase it.

Parsan says that whenever he plays there is always a strong incentive in the game to spend money on loot boxes.

“A good example of this was with [Call of Duty] Black Ops 3 because that game in particular, they added guns into the loot boxes. So, you weren’t just paying money or grinding the game for cosmetics… you are grinding it for actual guns. That changed game play,” he says.

“I remember one of the first guns I got that got me addicted to it…was this sick dual crossbow and so ever since I got that I was like, ‘I’m actually down to get these loot boxes’ and so I grinded and spent money to try and do whatever possible to get as many Crypto Keys as possible to open these loot chests to get guns,” he says.

“You couldn’t buy the guns, the only way you can get it was through loot chests so they make you try and buy it,” Parsan says.

Loot boxes, or talk of them, tends to draw a lot of ire from critics and gamers alike. Parsan says that they don’t belong in games at all.

“I feel like they hurt the gamer,” he says. “It’s just a money-making system for the businesses… and they exploit gamers essentially.”

But it’s not just predatory business practices that draw so much criticism when it comes to loot boxes. The biggest and most common complaint launched at them is how they relate to gambling.

Chanel Larche, a PhD candidate in psychology and a gambling addiction researcher at the University of Waterloo, agrees that there is a risk involved with loot boxes in games.

“If people are spending more than they can afford to lose on loot boxes and they experience problems in their everyday life, in their relationships then definitely there might be that impact,” Larche says. “That in itself is a causal relation.

Larche just finished collecting data on her research which, in part, tries to explain the addictive nature of loot boxes, says she would not be surprised if her research showed they were found to be addictive. She says loot boxes share many similar structural features and characteristics found in slot machines and these features are linked with problem gambling behaviours.

Larche mentions that there are many branches of ethical concerns when it comes to loot boxes.

“If they are addictive and if they do encourage gambling outside of loot boxes then I would say that’s a problem,” Larche says. “In this debate, there hasn’t really been much focus on the research that has been done in terms of answering that gateway hypothesis of whether playing games that stimulate gambling activities, whether that causes people to actually migrate to playing gambling games for money.”

In Ontario, in order for a game with loot boxes to be considered gambling it has to meet a very specific criteria from the Criminal Code of Canada says Sgt. John Custode, an illegal gaming specialist with the Ontario Provincial Police.

“There has to be consideration, which is what you would pay up front in order to play. There has to be a game of chance or an exchange of skill, which if you are talking about video games, that fits that criteria too. Then at the end, there has to be a prize that’s awarded. If one of those things is missing then it doesn’t meet the standards of the Criminal Code,” Custode says.

Custode says it meets the criteria,  but no legal action has taken place here in Canada. Elsewhere in the world, however, governments are starting to notice and make laws to regulate them in games. In April, loot boxes were deemed “in violation of gambling legislation”, according to the Belgium Gaming Commission and completely banned throughout the country.

In the U.S. this year, following the release of the game Star Wars Battlefront II, New Hampshire Democratic senator Maggie Hassan introduced proposals to regulate games that use loot box mechanisms and other associated microtransactions.

Custode says that should a case arrive the OPP would pursue it in court.

“My opinion is that it is not permissible,” he says. “It’s not predictable of what’s going to happen or what you are going to get.”

Humber professor Kristopher Alexander says he thinks there’s still a difference between video game loot boxes and casinos.

“With a casino you will generally put in your coin, pull the trigger and sometimes nothing happens. In video games, a lot of the times you will put in your coin, pull the trigger and there is an optimal result, sub-optimal, and maybe undesirable but still a something response,” he says.

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