The video games industry has undergone a radical change in the last 4-5 years. A lot of that has to do with the exploding popularity of online multiplayer games like Fortnite Battle Royale, Apex Legends, and Player Unknown - Battlegrounds (PUBG).
Apex Legends gas stolen the crown
Technological innovation is nothing new in the games industry. Each year, the games get more advanced graphics and increased realism. But the change we are talking about is happening in the business side of things - how publishers are making their money these days.
There is a growing clamor that some business models, like the use of micro-transactions involving loot boxes, are highly unethical. Critics argue that selling these virtual products to players, a large section of whom are children, could be tantamount to providing illegal gambling services.
What is happening in the games industry these days? Are they actually promoting gambling among children? To answer these questions, we need to look at how multiplayer games like Fortnite have changed the way players and publishers perceive games.
Single-player is no longer the money-maker
In the past, video gaming was largely a solitary experience - you could play with another player on the same device using a second controller, but that was it. Due to the lack of fast internet connections, multiplayer involving many players was simply not very practical.
In those days, buying a video game was a one-time investment - you paid $40-$60 and got the entire game. It was basically software as a product. In these games, the multi-player component was more of an add-on to the main game.
With the rise of the internet, multiplayer has assumed more significance. Playing against other humans is way more interesting and challenging than playing against the computer. Starting early with LAN games like Counter-Strike, shooters like Call of Duty, and then MMORPGs like World of Warcraft, multiplayer slowly became the main attraction of video games.
Mobile gaming brings micro-transactions
The origin of micro-transactions can be traced back to role-playing games like World of Warcraft. In these huge games, there was the concept of loot - valuable weapons, armor, potions, and other powerful items you can carry to gain powerful abilities and advantages (perks). Earlier there was only one way to earn loot - by killing enemies.
But soon, publishers realized that players would pay good money to get rare and powerful loot. This provided them with a brand new and lucrative way to earn money from a game. Loot was particularly significant in multiplayer as it would give players an edge against the competition.
When mobile games became popular, microtransactions became the main source of revenue for developers for this platform. People were never going to pay $30 or more for games on their smartphones. But at the same time, they could be enticed to play more through many small transactions (under $10).
Pretty soon, this successful model was adopted by PC and Console game publishers like Electronic Arts and Epic Games, despite reservations from gamers.
Packs, points, money - the root of the controversy
These days, in most popular video game hits such as Fortnite, you will find an in-game store where you can buy packs and loot boxes using micro-transactions. The system works based on this choice - to get loot, you can either:
- Play repetitively for hours and days to unlock it in-game (called grinding)
- Or take the easy way and pay for it
To do both, most games have an in-game currency or points system. You earn points when you play rounds, or by spending actual dollars in the store. Then you spend these points at the game store to unlock the loot and other perks. It works like the chips system in a Vegas casino.
And that is not where the comparison to a casino ends, unfortunately. The controversy stems from the introduction of loot boxes into the equation. These are like packs of baseball cards - when you buy one, you are not sure which cards you will get.
There is a chance that you might get rare or epic weapons or gear, which is why many players buy these packs. The process is too similar to gambling, according to many players, lawmakers, and industry analysts.
The make it or break it loot boxes
But is it really gambling?
There is undoubtedly a gambling mentality involved in the process of buying loot boxes or “loot llamas” as they call them on Fortnite. It the same instinct that we all have when buying a lottery or pulling the lever at a slot machine. You are hoping for a win, but you are never sure what the outcome will be.
And yes, there is money involved, even if it is indirectly. The points/in-game currency system is no different from the chips used at the Bellagio or Caesar's Palace in Vegas. That is yet another box that gets ticked and that too not in favor of the game companies.
But when it comes to the clincher, things take a different turn. For it to be considered as gambling, the potential winnings must have value and not just any value either. It must be something that can be determined in monetary terms, or other words - is it something you can possibly sell for actual dollars elsewhere?
In most games, this is not possible. The stuff that you get from loot boxes or packs is consumables. In some games like FIFA Soccer, you may trade them in the game's marketplace for other similar cards, but no money transactions are allowed. So these transactions cannot be termed as gambling if you consider the strict interpretation of the law.<
Why are people still concerned?
Studies have indicated that the process of buying packs and loot boxes stimulates the same kind of risk-taking behavior associated with compulsive gambling. And parents are right to be worried, as we have seen reports of children maxing out credit cards buying these packs online.
And companies cannot say that the objects they sell in these packs have no monetary value whatsoever. Since the early days of World of Warcraft, players have been buying and selling loot on online marketplaces. If you take that into account, the argument that these packs do not constitute gambling is no longer valid.
Several lawmakers in countries like the US, UK, Belgium, and the Netherlands have voiced their concern and opposition to these packs and loot boxes. Facing the flak, several game publishers have also taken steps to reduce or even totally remove loot box sales on their games.
