Here’s how some online game developers justify lockboxes

Yes, it’s apparently the Month of the Lockbox across the internet, as the level of discussion and controversy over how these items manipulate your mind and whether or not they constitute as gambling by ratings boards is ramping up.

The public might have a mixed view on lockboxes, but have you ever wondered what developers think? While some might well be quietly humiliated that these items sully their game by marketing degree, others have publicly justified their inclusion. GIbiz recently found that most studios won’t comment on loot boxes, but a handful of devs did step forward to speak about them. The common thread? Cost of making games is going up while box pricing is remaining static… and something has to give.

“Some big games are just not selling enough copies to make the development and marketing costs viable,” commented Rebellion CEO Jason Kingsley. “Loot boxes mean more revenue from those who are interested.”

“Regardless of development costs, developers and publishers are going to attempt to make money — it’s a business,” added former Bungie developer Niles Sankey. “Developers have retirement to save for and families to feed… If people don’t like loot crates and microtransactions, they shouldn’t support the game by purchasing them.”

And former EA exec Ben Cousins made the bold claim that some companies seem more immune to criticism over this topic than others: “Blizzard gets a free pass on pretty much everything, as does Valve. Never try to get learnings from them, as they are outliers.”

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179 Comments on "Here’s how some online game developers justify lockboxes"

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Diego Camargo

I laugh, hard, everytime this topic is touched somewhere.

It is the same thing over and over: Boxes are gambling, companies are evil, companies are greedy, players don’t deserve that, this companies/devs are full of BS, etc etc etc etc

And yet, I fail to see players that do NOT back these bad behaviour.

Games are launched full of bugs and with paywalls with DLC content (even when the content is ALREADY in the game you biught) and yet, players pay for it.

MMOs are filling your eyes with pay options like boxes, and yet they are still there, and if they are there it is because gamers are buying this things. No business transaction will continue this long if they aren’t profitable.

I often see the ‘evil companies’ factor and I hardly see the ‘gamers are supporting this behaviour’ factor.

You wanna get rid of bad behaviour in the gaming industry? Don’t support bullshit!

If a company is known to do this over and over again, stop buying the 10000th version of Call Of Duty or whatever.
Stop buying games up front, months prior to release dates (because when the game is launched, your money is already theirs, they do not care about you later), stop paying for microtransactions that are nonsense (like paying hugely for LOTROs new expansion without the proper content), and I could go on and on…

Simple and I follow my advice, I don’t pay upfront for anything untill I see a project done and working properly, I don’t buy keys for boxes, if they are available in-game for gold or currency you can get playing, fine, you wanna my money? Give me something concrete in return like new classes packages (like Rift), etc etc etc

Again, look at yourself as a player and if you are feeding this business model and stop with the ‘one more doesn’t make any difference’. It does.

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johnwillo

They should sell two versions of games. The first, for $X, has lock boxes. The second, for 2 x $X replaces lock boxes with statistically similar drops from the lock box loot tables. Players of the second version of the game never see a lock box, lock box key, or an advertisement for lock boxes on the game store.

Sigh. A man can dream.

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mysecretid

“Never try to get learnings from them”??? Where did EA’s Ben Cousins learn to speak? Night-school on the Moon? Yeesh. He sounds like a cartoon caveman.

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mike foster

The Blizzard thing is an interesting point. I HATE the way Overwatch loot works (let me just buy the goddamn skin, duuuuuuude), but it doesn’t seem to generate nearly as much animosity as if say, EA did it that way.

BUT Overwatch is also a complete game — as in, once you buy it, you can play the shit out of it. Loot is cosmetic, in that case. I would imagine Blizzard does get a bit of leeway due to brand identity/track record/fandom, but I think they get clapped pretty good when they step out of line with what players expect.

There’s no question that loot boxes create HUGE flows of revenue and can be beneficial to both sides of the transaction — the tricky bit is making it feel fun for players and not being dicks about it. Probably depends on 1. design 2. loot table 3. cost and 4. a bunch of other stuff I don’t understand.

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Simon F

Overwatch is a good example of loot boxes done right in my opinion. It’s 100% cosmetic, which means that nobody gets any advantages. They are also fairly generous when it comes to free lootboxes, and during events, they make some skins more common.

While I don’t like loot boxes, I think that’s the least harmful way of doing it, while keeping revenue coming in. Then we have a game like League of Legends, which does have random skin unlocks, but what I don’t like about LoL is that there are just so many champions, and if you want to unlock them all, you’ll have to spend loads of money, or you’ll have to play way too much than is good for your mental and physical health.

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teppic

Jim Sterling did a good video on this topic and how it’s utter nonsense. The $60 tag these days is for a base game experience with often fundamental parts of the game missing, you may have to pay twice that to get the full experience, and on top of that they stick in microtransactions and lootboxes to cash in even more, sometimes with pay to win stuff.

The big studios make more and more each year and grab every penny they can get. This idea that they’re poor struggling companies just trying to get by is insulting.

Grave Knight
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Grave Knight

Meanwhile Larian Studios (Divinity) has no lootboxes in their game. Or if we want the online game example, Grinding Gear Games (Path of Exiles) also lacks them. Also notice how it’s the triple-A studios that seem to need lootboxes the most?

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John Mynard

They also have a lot more staff that requires payment.

I will, again, point out Digital Extremes who reportedly have a staff of around 170 which is 1/3 the WoW development team alone at Blizzard and they seem to do just fine with cosmetics and paying to save time while turning out a game that outshines the significantly more expensive competition.

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Dear former EA baddie. Blizzard doesn’t lock progression or add P2W items.

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Eamil

No, but lockboxes are still objectively less beneficial to the consumer and more money-grubbing than “I give you money, you give me the exact specific cosmetic thing I want,” yet they replaced the latter with lockboxes in Heroes of the Storm after seeing how well it worked for them in Overwatch and people cheered them on for it.

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MolleaFauss

Lots of BS in the justification. Why don’t we put “lockboxes” in your electricity or internet supply? You have only 100MB a month of traffic, but if you buy lockboxes you may get more. Or not. Or voucher for tesco, or toys’r’us or mcdonalds or a NYT subscription.
Would those people like it? I doubt it.

Why don’t insurances do it for the pension plans? Give use some base contribution, and then if you get lucky you can get extra weeks of contribution free of charge, subsided by the other who play with us.

Let’s cut the BS. Lockboxes aren’t completely optional. They are becoming more and more part of the games. You *have* to open them to be better in the game or to get faster to the end.
Seriously, get back to the subscription model. Ask me 20 quid a month. Be honest and transparent, don’t fill your games with crap.

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MeltWithYou

Well since EA wants to shit all over Blizzard, maybe they should ask Blizzard how they manage to sell millions and millions of copies of each one of their games…most of which do not have lock boxes tied to progression. Maybe ask Rockstar how it manages to see millions of copies of GTA…or Red Dead. How about Bethesda, ask them about Elder Scrolls and Fallout.

My point is, the games (or franchises) I pointed out have a reputation of being great games…a reputation that has been built over many releases over many years.

EA has had a shitty reputation for being money grubbing whores for years…what are you guys doing to fix your reputation? Seems to me like you always figure out ways to dig that hole deeper and deeper. Mass Effect Andromedas a great example to use here, game came out to less than stellar reviews, they kinda fixed it and moved the fk on. What if Blizz did that to Diablo 3 when it came out?

Sounds like EA has a management problem that can’t see anything but green.

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mysecretid

You make an interesting point here that I don’t see a lot of people make when they talk about “good” versus “bad” companies — reputation over time.

It’s not only that “people like to bash EA, meanwhile Blizzard is beloved and gets a pass”.

There’s always going to be some of that, sure — there will always be blind fanbois and blind haters — I am reminded of comedian Katt Williams’ joke. “There are always going to be haters. Jesus only had twelve friends, and one of them was a hater”. :-D

But as you say, beyond the zealots on either side, most publishers have built their own reputations over time, through a pattern of decisions and actions.

People form opinions over time about publishers, based on what those companies do, and how the decisions those companies make affect those customers personally.

It’s not simply a question of, “Oh, Blizzard is the popular kid, so Blizzard always gets a pass”.

No, if Blizzard is “the popular kid”, then it’s because they’ve done enough things which made them popular with enough game-buyers that — whenever they do go off the rails — their reputation over time with most ordinary customers will buy them a short window of opportunity to redeem themselves, should they choose to take it.

Basically, Blizzard’s positive reputation built over time buys them a certain “benefit of the doubt” period with ordinary game-buyers.

EA, on the other hand, has burned up so much goodwill with game buyers, and their attitude has typically been “Suck it up, buttercup. Our profits are good, so talk to the hand” whenever customers question or complain, that they’ve actually eroded reputation over time.

Nobody gets a free pass out of thin air with most game-buyers — what they get is a reputation built over time with game buyers, based on how the publishers act (or are perceived to act) in relation to those buyers.

Thanks for emphasizing this. I do think it’s important.

Cheers,

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Paragon Lost

Well, this is what happens when you walk away from the subscription model and cater to content locust players who roam from mmo to mmo playing them like stand alone PC games. They want it for little to nothing and you’ve had to come on up with ways to make money, you the game developers sought out and catered to this type of player and they are now the norm.

You’re now in a bind, how to make money so that you can stay in business, pay salaries, maintain content, build new content, pay for building space, insurances, retirement, hardware costs since most of you lease server space etc.

The mmo and mmorpg market is saturated with too many out there thinking that they can operate like mobile games and stay in business. Bluntly it’s a shit show anymore and it’s not looking like it’s gonna get better and you’ve embraced an ugly business model that affects game development, player experience and developer experience in a negative way. Free to play…bravo folks.

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Jon-Enee Merriex

The subscription model does not support games without huge numbers of subscribers. Remember prior to WoW that was 250K. However, now players want WoW quality. Blizzard can get away with a $14.99 sub because they have 10M players. Outside of the top 10 MMOs, most games don’t come near that many users AND for the FTP game, the majority (75%+) of those players don’t pay monthly.

This is just like how Wal-Mart killed the Mom&Pop store. Mass quantities allow for lower prices. If you’re going to have a game that only has about 100K users, 14.99 will not pay the bills.

100K x 14.99 = $1,499M / Month x 12 = 17,988M. Let’s round that up to a cool $18M a year.

For a WoW-sized game with that population, you’re looking at about $250K a month. So that’s $3M a year.

CDNetwork fees will probably run about $1M a year, assuming you do 4 big updates a year and not a lot of other patching. You’re not getting voice-overs on this budget and the music may be REALLY repetitive.

A team of 100 (this includes HQ, Finance, Devs, QA, everybody) x avg salary of $80K = $8M + 100 x benefits/bonuses of $20K per person = $2M = $10M in personnel costs.

So now, you’ve spent $14M but no one knows about your game. “Well, if it’s good people will come play it.” Not really, actually. People don’t play what they don’t know. And, even IF you have people playing the game, they will leave. For reasons that have nothing to do you with you. They go into the military, they go to college, they have children. You need to constantly replace those people, every month.

At the end of the day, you need to be spending at least 50% of your budget on marketing. But wait, our budget was the $18M we were making. And we’ve spent $14M just making the game. So we’re now in the hole by $5M.

To that I say, welcome to game development. It is a highly competitive business and it is near impossible to get right and your consumers hate you for just about everything, including but not limited to: asking them for any money.

The reality is, the subscription price shouldn’t be $14.99. It should be $25. That changes the equation substantially. Now you’re bringing in $30M a year. With $15M spent on marketing, $14M on operating costs and $1M in profit. The profit is probably low, but you are no longer sucking.

I say all that to say, the idea that everything should just be a sub, doesn’t work unless everyone is paying fair value. Currently, players think $50 per box and $14.99 per month is fair value, while developers understand it is MUCH higher than that. If a game was in development for 4 years that would mean $10M x 4 = $40M / 100K = $400 per player in the first year to make a full return on investment.

At $15 per month and $50 per box, you’re not going to cover that spread with so few people. Now, if you’re planning to average 100K people, you need to launch to at least 5 times that – which WILL help you cover that spread, but we’re still talking about a box that needs to cost $60-75 and a monthly cost of $25.

NOTE: I did not include any costs like, where is everyone going to work? What are they working on, notebook paper? Utilities, Insurance, Company Outings and so much more. And no, $1M won’t come close to covering all that for $100 people.

Obligatory Full Disclosure: I currently work in the gaming industry and have for over a decade. I’ve worked on large AAA titles and small games you’ve never heard of. This post is solely my opinion, from my personal experience, and in no way reflects my company or its stance on this or any issue.

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mike foster

I would like to point out that Blizzard’s original break-even sub base for WoW was 200k-ish. The game’s success helped build a lot of other things (and really fucked up expectations for publishers getting into the MMO market), but you don’t NEED massive sub numbers to support an MMO if you build it with a realistic goal (which is what Blizz did).

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John Kiser

Subscription costs shouldn’t realistically move at all. In fact for awhile they should of been coming down as a major cost factor was actually the internet bill and this is no longer the case. Games used to get by just fine with 250k – 500k and some people need to understand that a game can actually “survive” just fine with those numbers and churn out content.

The problem with those numbers ultimately is that publishers see the gorilla in the room with WoW or FFXIV (these days I think FFXIV has more players and is getting close to WoW’s subs in its hayday) and expect those numbers for a game to be a “success”. So the publishers are wanting millions upon millions of players when the market isn’t really like that to begin with.

The MMORPG genre is niche outside of the bigger IP names out there and if publishers stopped chasing lofty dreams trying to emulate WoW and the like they’d probably remember that. They should be developing their games with a realistic goal in mind ultimately. My other qualm is this argument that games are getting “more expensive” to develop.

There are definitely more man hours put in the more detailed we get however the tools are also getting better and cheaper and it no longer is a crazy amount of money to get an engine or game going for a lot of the middleware tech out there. Also where is this argument that around 1.5 mill won’t support a company of 100 people? If you had 100k subs at 14.99 you are looking at 1.499 mill a month which would give each employee a pretty solid 10k+ a month (assuming you paid everyone equally, if you have diff position blah blah blahj) so you are looking at a potential payout to employees of 120k or more a year before taxes (and that’s going to be a small studio).

Most big studios would garner more subs than that and typically speaking have more games than a single game going. The subscription model would be unsustainable at 25 dollars a month as quite frankly we all know where that would end up leading ( a mass exodus in player bases and you’d have a much smaller player base as a result). Games are getting more expensive because of voice acting and quite often using “famous” people to do voice work in games such as Keifer Sutherland, Kevin Spacey, Christopher Meloni and I could go on with that list.

I’d just like to see MMORPG publishers go into things with realistic expectations. If you are making what amounts a themepark game reminiscent of WoW and it isn’t pretty much as “good” as WoW to people you aren’t going to justify any price for the game to a large number of people. FFXIV is doing well because they learned from mistakes with 1.0, and are now releasing content on a regular basis in-between updates and keeping their player base more and more happy.

You do need to remember that these games are bringing in monthly profits to a company and often times unless it is the studios only game they don’t have everyone that worked on the game doing content or server related stuff. Breaking stuff down I truly wish that people would just attempt to understand that loot boxes are a thing that supports developers / publishers and while I think they need to give a realistic number to people to tell them what the “loot table” rates are, I don’t view them in a light where I have to have them particularly in games where any of those items are earnable or buyable in game in some fashion (such as the case with Shadow of War, the loot boxes literally only effecct the MP element of the game which is realistically not all that important if you are playing it for single player, not to mention you can buy loot boxes with in game currency)

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Jon-Enee Merriex

I honestly don’t know what you’re talking about. Just because you are using a game engine does not mean you have a game developed. Game engines support the creation of the game. You still have to MAKE the game. That takes engineers and coders to write the code of the game. Using a game engine saves you time, but it is still 3-4 years to develop a full game.

This post reads like someone who’s never made a game before. My numbers don’t include a bunch, such as a website, payment gateway, taxes (oh God the TAXES!!!), Fraud, customer support, community, PR. You look at that $1.5M a month and think “that’s a lot of money” but that money goes really quick.

So yeah, getting an engine has dropped in price, but that engine is a small part of the bigger picture.

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Paragon Lost

I understand that and actually have mentioned that sort of break down before. I also agree that the subscription monthly rate should be closer to that $25.00 a month. :) Great break down btw. I no longer really have the patience to go into long detailed posts because I’ve been doing them off and on since the F2P business model really took off and I figured everyone was pretty tired of having me drone on and on about it.