Lootboxes in Games

The implementation and design of loot boxes in computer and video games is the subject of some heated debates. The BIU is taking this opportunity to set out the most frequent aspects of the debate.

What are loot boxes?

Loot boxes extend the gamer’s possibilities with virtual objects and additional content. Loot boxes have been around for several years in a range of different forms. The vast majority of them contain outfits or new items of equipment that gamers can use to customise their avatars. Gamers know the number of items a loot box contains before they open it but do not know its precise contents. Depending on the game design, as well as receiving loot boxes by achieving certain game objectives, gamers can also purchase them. Buying loot boxes is always optional. They are not necessary to complete the game.

What is the current debate about?

The current debate – especially among (adult) gamers – centres around the providers’ business model. It is a model that involves offering additional content for sale after the game itself has been purchased. For developers and publishers of computer and video games, these additional offers have become an important supplementary source of revenue that enables them to keep the prices of games constant despite the sharp increase in production costs. The absolute majority of gamers do not spend money on optional additional offers. Gamers who do spend money on virtual items and additional content spend on average the cost of a cinema ticket each month.
Some gamers also claim that loot boxes in particular lead to unfair competition in some games. The focus of the criticism is that loot boxes give buyers advantages over non-buyers (‘Pay2Win’). However, a key element of online games is that all gamers start from the same position and only the team’s ability and tactical skill will decide whether it wins or loses. In the long-term, the success of an online game depends on whether it achieves this balance. For this reason, game balance is also vital for producers if they are to win over customers in the competitive market for computer and video games. The result is a very customer-focused market in which producers listen and respond to customer feedback.

10 facts about loot boxes

1. Buying loot boxes is always optional. They are not necessary to complete the game.

2. Loot boxes usually contain outfits or new equipment – in most cases these do not give the gamer any gaming advantage.

3. The absolute majority of gamers do not spend money on optional additional offers.

4. Loot boxes are not a new phenomenon. They have been used in games for over ten years.

5. Computer and video games continue to be developed after they have been released. New content is either offered free of charge or – in the case of more extensive new material – in exchange for a fee. These additional offers, which include loot boxes, are an important additional source of revenue to help keep the prices of games constant.

6. Loot boxes always contain a known quantity of virtual objects and additional content. The exact details of the content are not known, as with Panini trading cards or Kinder Surprise eggs.

7. It is not possible to lose the money invested, which is a basic feature of gambling. The gamer always receives something in return, in the form of virtual content.

8. For the vast majority of gamers, loot boxes are not a key motivating factor for playing a game. They therefore do not lead to excessive gaming or exorbitant expenditure.

9. Parents can prevent children from buying additional content by disabling purchases at system level or not entering credit card details.

10. Loot boxes in games are governed by clear rules for the protection of young people. In Germany, suspected infringements can be reported to the Entertainment Software Self-Regulation Body (USK).

 
The full position paper is enclosed available for download.

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