
Loot boxes a matter of “life or death,” says researcher - EndXA
https://www.gamesindustry.biz/articles/2019-08-08-loot-boxes-a-matter-of-life-or-death
======
Bartweiss
> _It 's not something we should trivialize or laugh at or compare to baseball
> cards._

This seems like a strange comparison to reject. Baseball cards were originally
'prizes' packaged with other products, and they were randomized to create
excitement and keep people brand-loyal while they hoped to find the prize they
wanted. They're the precursor to CCG booster packs, and from there to MMO loot
systems, so of course we should compare loot boxes to baseball cards!

And it's even darker than that. The major originators of baseball cards were
_tobacco companies_ , so you'd go out and buy ATC cigarettes in hopes of
getting Honus Wagner. The causal chain from baseball cards to smoking to
cancer was far tighter than the chain from loot boxes to problem gambling to
suicide, and yet we're told that loot boxes are a _real_ problem, not like
baseball cards. Exploiting people, and targeting kids, with randomized prizes
is way older than B.F. Skinner's work.

It's a minor side note of course, not the core of the discussion, but it's a
bit concerning to see a researcher specializing in loot boxes botch his
history so badly.

~~~
csommers
At least there’s something physical and tangible with sports cards...I can’t
say the same for Overwatch packs etc.

~~~
pbhjpbhj
Similar intrinsic worth though (c. zero).

~~~
kjsbfkjbf
But there was still exchange value.

Furthermore, the scale and ease of purchase of lootboxes vs. baseball cards
are incomparable.

~~~
cortesoft
People do sell loot box items in a lot of games... that often just makes the
gambling problem worse, because people buy the loot boxes thinking they will
make real world money.

~~~
Bartweiss
Good timing for this - the Team Fortress 2 hat market just collapsed over a
change in drop rates.

It's probably worth differentiating tradeable loot boxes, which end up used
like stock speculation, from untradeable ones, which seem to be used more like
slot machines.

~~~
lonelappde
Indeed, letting players try to scam each other seems slightly less evil than
scamming the players directly.

------
vorpalhex
It feels to me that the issue is game studios are too large. Indie's don't
engage in this behavior and still produce very excellent games without going
bankrupt (Factorio, Stardew Valley, Stormworks). Even smaller developers that
choose a Free-to-play model with transactional elements (Path of Exile) can do
it in a very player friendly way that aligns with game value.

On the other side are companies like Activision and EA that will sell you a
$60 game and expect you to spend another $60 in micro-transactions, screaming
"more profit" the whole time.

My advice is choose who you support with your money carefully.

~~~
lawl
Path of Exile does have (cosmetic) loot boxes though. They didn't always, but
they do now.

Not a problem for me because I just don't buy them, but just not buying them
isn't really a solution for people with a gambling problem.

Games like Factorio do show indeed that it's possible to just sell an
excellent game for $20-30 and be profitable.

Now, I don't have a source for this, but I heard valve for example stopped
making single player-pay upfront games because the a one time profit of $200
million simply isn't worth it compared to, let's just call them 'modern
monetization' techniques.

~~~
vorpalhex
Path of Exile doesn't have just cosmetic loot boxes, you can actually buy game
upgrades! You can unlock inventory tabs and get better sorting.

And that's what I mean. Those features are a few dollars, you almost always
know exactly what you're getting, and they're generally only useful after
you've put a few hours into the game. For a free to play game, that's a
totally valid use in my book.

> but just not buying them isn't really a solution for people with a gambling
> problem

Someone having a pre-existing gambling problem isn't the fault of the
developers, nor is that what the researcher in the original article is
claiming. The researcher claims that allowing kids to engage in buying loot
boxes fosters a gambling addiction later in life.

~~~
lawl
Yeah I'm aware of how their monetization works and I think it's great as they
at least never force you to buy them and everything eventually becomes
available for a flat price in the shop at some point.

> Someone having a pre-existing gambling problem isn't the fault of the
> developers, nor is that what the researcher in the original article is
> claiming. The researcher claims that allowing kids to engage in buying loot
> boxes fosters a gambling addiction later in life.

Kids can also buy lootboxes in PoE. Ok sure, _technically_ kids shouldn't be
playing PoE, but that's just not reality.

------
eveningcoffee
This caught my eye

"It turns out if the seller publishes some list of probabilities and lies
about them, the seller can make significantly more money," Elmachtoub said.
"There is a benefit for lying. Since there's a benefit for lying, there must
be regulation around this."

Elmachtoub said games need to be monitored to ensure publishers are actually
following the probabilities they post, and it needs to be tracked not just in
aggregate but on the individual consumer level because it's otherwise possible
to gain more money by extorting specific individuals.

....

"Another unique thing about loot boxes versus baseball cards is that companies
can see your inventory. That's a fundamental difference. Being able to take
advantage of that would obviously be beneficial to the seller and allow them
to exploit more.

------
charliesharding
They raise a valid point with a needlessly sensationalist title - but it does
feel like a natural (d)evolution of the gaming industry. This is what happens
when a studio becomes successful, hires a lot of people, then tries its
hardest to maximize profits.

The real solution here is that parents need to educate themselves on how to
lock down permissions on game purchases and manage their children's
playtime/addiction levels. Government regulation is not a good substitute for
parenting.

Remember, as a consumer, you can still support games that don't employ these
tactics! Personally, I have way more fun playing Rimworld, Factorio, etc.

~~~
rowanG077
Are you saying the same thing about casinos? That children should be able to
go to casinos? And the parents should just make sure their children don't
actually go to the casino?

That sounds wholly crazy to me. Loot box mechanics should automatically result
in a mature rating for the game.

~~~
charliesharding
It's not that I don't think it's a problem, it's that I think regulation isn't
a good solution. Game companies would just find a way to circumvent the
system. What if loot boxes could be bought with in-game credits? What if you
could buy short term in-game credit boosters for real money? The regulation
route, if continuously followed to address the problem, would end up with all
games being rated 'M', or being subject to high regulations/restrictions which
would affect anyone who wants to enjoy them. After all, games themselves are
designed to short circuit your brains reward system to give you hits of
dopamine. The root of the problem is that kids aren't always capable of
understanding these complex issues, and it should be up to their parents to
inform and constrain how their kids enjoy games.

~~~
rowanG077
I don't have a problem with all games containing even the hint of loot boxes
getting the mature rating. The regulations should be just as strict as for
casinos. If a game company wants to run a casino along with their game then
it's their right but then don't expect to be treated differently.

~~~
charliesharding
In that case - any game that has purchasable content would be rated 'M' and it
isn't a far leap to just say that every game should be rated 'M' because of
the potential for addiction. What about candy and soda? Sugar is also
addictive

~~~
rowanG077
Loot boxes and in game purchases aren't the same thing.

------
lunias
I think that loot boxes should be subject to the same laws as slot machines in
the US (since they are online slot machines, right?).

If your state doesn't allow slot machines and online gambling then no loot
boxes for you. If it does, you must also be 18 / 21 to purchase a loot box;
depending on state law.

What's the loophole currently being exploited that prevents loot boxes from
being classified as online slot machines?

~~~
WorldMaker
This is also a deep hint to a potential worst case outcome of loot boxes.
Pinball machines experienced a prohibition because of their similarity to slot
machines. States that do not allow slot machines stopped allowing pinball
machines. _Eventually_ those states started to relax the prohibition based on
whether or not pinball machine scoring systems could be determined by player
skill and whether or not pinball machines produced payouts/rewards/prizes. But
they started by banning all pinball machines, and bankrupted a number of
companies in the industry.

Videogames should have been a lot more careful to avoid this situation in the
first place. It's not like the pinball prohibition was that long ago (New York
was the last state to stop prohibiting pinball machines in 1976), nor that it
was that far from home because it impacted laws on early arcades where
videogames got their start (literally right next to pinball machines, and
sometimes by the same manufacturers).

It probably is a stretch for states to simply ban all videogames in 2019, but
that sort of reaction is certainly possible in the right climate, and it has
happened before.

~~~
lunias
Interesting... I can see video games getting banned on the basis of addiction,
but not specifically because of the loot box mechanic; since it can be
removed. Pinball on the other hand would have had to become free?

I just hope that once someone starts enforcing our existing laws that video
game companies will abandon this idea since the access and implementation to
the boxes would be different based on the user's physical location.

~~~
WorldMaker
That was the argument for pinball prohibition starting by just outright
banning all pinball machines rather than sort them into categories: they were
hugely addictive. The loot box mechanic draws the public scrutiny of the
comparison to slot machines, but that worst case is that the scrutiny
continues on to find the entire category too addictive. (Which is exactly the
progression pinball prohibition took: at the time there were an increasing
number of pinball machines which we might call today more "pachinko-like" /
"plinko-like" that initially grew the ire of politicians and family groups,
but after evaluation they started to feel all versions of pinball were
addicting and needed to be managed.)

------
ShrinkingWild
I've never understood this, all economic transactions are voluntary, who am I
(or in this case, you) to tell people they can't make that decision?

People who make bad decisions shouldn't be protected from the consequences of
their actions. I do agree that loot boxes and gambling mechanics are pretty
bad methods of monetizing a game, that's why I don't buy them, but I don't
presume to tell other people what they should think of them or the business
owners whether or not they can add them in.

~~~
esyir
This assumes the lack of negative externalities from such a system.

------
dynamite-ready
When my nephew was 7 years old, he ran up a £200 bill for nonsensical digital
objects on Xbox Live during the 360 era. Microsoft reimbursed my brother after
we described the problem to them.

This was a little while before the media even knew there was a story. Given
the early success of Xbox Live, I suspect they probably saw the issue coming
long before the recent witch hunt, and did the right thing.

I think as a burgeoning social problem, it can definitely be likened to what
the fast food chains are now penalised for. And as it's a burgeoning problem,
there are probably no (edit - meaningful long-term) research projects to
explore the link between free to play marketing and gambling problems later in
life, but I'd be surprised if there's no link there.

I think it would be remiss of any organisation to call for a total ban, just
as it would be for any group to call for a ban on cake... But I do think laws
prohibiting the offering of in-game products to certain age groups, for cash
should be considered.

Beyond that though, I think loot boxes and in-game economic structures are
fair... ummm... game...

~~~
pbhjpbhj
Cake at least has a natural limit, you'll be physically sick. Loot boxes the
physical limit is probably going to make everyone who isn't Bezos poor.

------
falcolas
I agree wholeheartedly with the concerns about gambling.

I have another concern to toss on the pile while I'm at it though. This what-
if was presented by Bellular a few days back: (TL;DR: The profit ratio for
microtransactions is orders of magnitude larger than expansions)

Assuming a new WoW mount:

\- Takes about 1 man-year of effort to create, costing the company $200,000

\- 10% of the player population will purchase the mount at $25

\- WoW has approximately 4M active players

That mount just made Blizzard/Activision $10M, at a cost of 200,000. That's a
profit/cost ratio of 50:1.

It gets even worse when you factor in loot boxes. New mount has a 1% chance
(which is very high) and loot boxes are $1 each? That's going to net (a very
approximate) $40M in profit for that one new mount, raising the ratio to
around 200:1.

Let's compare that to releasing a new expansion:

\- 100 man years of development effort (a team of 50 for two years, probably
on the low side)

\- $10M in marketing budget and other overhead

\- 4m players purchase it at $40 each

That's $160M in revenue, but with $30m in costs. Profit to cost ratio of 5:1.

Given the orders of magnitude between the two, there's a strong incentive to
only cater to the 10% of players, at the expense of the other players. How
will that impact our games going forward?

~~~
root_axis
> _That 's $160M in revenue, but with $30m in costs. Profit to cost ratio of
> 5:1._

This doesn't consider the immense second order effects of releasing an
expansion. Releasing a new expansion maintains and increases player engagement
- i.e. monthly subscription fees. Without new expansions to keep the player
base engaged, players won't purchase cosmetic additions like mounts.

~~~
falcolas
You're right. But it doesn't change that the focus of the studio changes from
"how do I keep these 4M players playing my game" to "how do I keep these
specific 400,000 players purchasing my microtransactions".

And given some of the monetization industry talks, the strategy doesn't
necessarily include "make a good game".

------
piker
> "It turns out if the seller publishes some list of probabilities and lies
> about them, the seller can make significantly more money," Elmachtoub said.

Perhaps contrary to the author's point, the ability to reap rewards by
defrauding players regarding probabilities of payouts seems to imply some
rationality in purchasing the loot boxes.

> "There is a benefit for lying. Since there's a benefit for lying, there must
> be regulation around this."

In all things there is often a short-term benefit to be derived from lying. It
doesn't necessarily then follow that "there must be regulation around" all
things.

~~~
pjc50
Obtaining money by deception is already regulated: it's fraud. People
publishing deliberately inaccurate lootbox odds should be prosecuted and
given, at the very least, a criminal record and large fine.

~~~
falcolas
Here's a question - if you have 1 in 1,000, or 1 in 1M odds of getting a
specific item, is it acceptable to list those odds as "<1%"? That's what
occurs today when companies are forced to reveal rates. It's misleading at
best.

~~~
cma
If "<1%" is so successful in misleading people and increasing sales, why
wouldn't they just do it without the regulation requiring it?

~~~
falcolas
> why wouldn't they just do it without the regulation requiring it

Likely because it has a negligable effect, and it's harder to do than not to
do. Does a gambler stop gambling despite knowing their odds of beating the
house are less than 1%?

~~~
cma
If it is a negligible effect, then it shouldn't matter much if regulation
requires notice and it has negligible effect either. Seems like a non-issue.

------
darepublic
Life itself is also life or death

------
program_whiz
Its also life-or-death for much of the game industry. The same way most
restaurants and fast food chains wouldn't be able to exist without "cheap
tricks" targeting primitive brain circuity (e.g. MSG, sweeteners, frying),
most game studios would not be able to survive based on box sales alone. They
need a skinner-box to extract more money out of people. Creating a game that
is compelling enough to extract ever-increasing value out of people based on
content, quality, and narrative alone is extremely difficult. Making a "random
loot box" system is extremely easy and pays far more, even though its the
"easy way out". Of course, like fast food and cigarettes / drugs, the
consumers also bear responsibility. Rather than supporting "clean" games with
something noble to offer, the games that exploited these tricks virtually
printed money, while the "old timey" approach of spending years making a
quality title gave way to the more casino-like interactions we see today. The
truth is fast food, drugs, and gambling are just more fun than home-cooked
nutritious meals, healthy habits, and deep/challenging engagement.

Pretty much everything fits these patterns of reduction to the basic
animalistic appeal: movies, music, clothing/attire, dating apps, even our
politics. Its just easier and more effective to appeal to the limbic system
than to figure out something new and profound.

~~~
lawtalkinghuman
In 1999, I could go into a game shop and pay £40 for a finished game with a
story.

In 2019, it costs £60 (or more for a "gold edition" or whatever). It isn't
finished, has colossal bugs that require 50 GB patches just after launch,
barely has a story (because listening to 13-year-olds shout ethnic slurs at
one another is the new having a well-written story—and every developer thinks
stories are passé and we all want "Live Services") and then tries to use
psychological tricks to try and induce a gambling addiction.

I opt out and play the old games from the 90s and early 2000s that don't do
all this BS.

~~~
UncleMeat
Ultima retailed for $80 in the 80s. Prices have been fairly flat, ignoring
inflation, for decades.

