A new report on GIbiz suggests that most gamers are pretty darn clueless about lootboxes, which probably won’t surprise anyone reading here. Researchers for the publication surveyed gamers in Western Europe and found that barely more than a quarter of gamers even know what they are. More than half (we assume of those who seem to have no opinion on whether lootboxes are a plus for the gaming experience (a quarter think they suck). But the reaction differs depending on the way the question is phrased.
“We also asked gamers if they thought loot boxes made them think more positively about game companies, 54% had no opinion, 10% agreed with the statement, whereas 37% disagreed. In fact 20% ‘strongly disagreed’ that loot boxes made them feel positively about the companies that used them, which suggests that loot boxes create some negative feeling among some consumers.”
That said, almost half of those familiar with lockboxes suggested that lootboxes make them less likely to buy games with them, so there’s that.
The international community is becoming aware of the problems of lootboxes, and that means that laws are being formed in response to the business model. But there is another approach to dealing with them: you can kick the can down the road by condemning them and doing nothing else, which is the route the French gambling authority Autorité de regulation des jeux en ligne (ARJEL) took. Upon review, the organization condemned lootboxes and noted that they were bad, but stopped well short of actually putting any laws in place to prevent lootboxes.
This is significant, as classifying lootboxes as gambling would change the laws under which they are controlled… but the authority stops shy of doing that, even as it mentioned that lootboxes are definitely like gambling and certainly promote gambling behaviors. But they’re not considered technically gambling and thus remain in a legally nebulous zone, with the official recommendation to vote on more conclusive statements later. So the resolution is to resolve things later. Proactive!
If you were in any way hoping that the Dutch Gaming Authority’s ruling about lockboxes would lead to a worldwide shift, it seems that’s not quite what’s happening. Valve was one of the companies told to change their lockboxes or face prosecution in the Netherlands for failing to comply with the country’s policies, and Valve has responded… by disabling the Steam Marketplace selling or direct trading of lootboxes for CounterStrike: Global Offensive and DOTA 2 in the Netherlands.
The official statement from Valve indicates that it does not agree with the DGA’s ruling and that appeals are ongoing but that the current action is the only possible solution to the problem. There’s no word of any sort of long-term plans if the DGA does not change its ruling, especially as Valve is currently framing the disabling of lockboxes as a wholly temporary measure. Our condolences to players negatively affected by the decision.
You know how sometimes, when nosy press asks you a question with no good answer, you’re better off shutting up? And when they don’t ask you about a tricky subject, you probably shouldn’t go out of your way to run into it head-on?
Nintendo didn’t get that memo at E3, apparently, as during an interview with Bloomberg, it broke ranks with more diplomatic game studios to basically defend lockboxes and lootboxes.
“Loot boxes, broadly speaking, have gotten a bit of a bad rap,” Nintendo exec Reggie Fils-Aime told the publication (via GIbiz), in answer to a broad softball question about digital revenue.
GamesIndustry.biz has a fantastic piece illuminating the Entertainment Software Association’s apparent game plan on lockboxes going forward. The publication recaps a lengthy talk ESA president Mike Gallagher gave at the Nordic Game Conference seemingly designed to both incite concern over lockbox regulation and extol the virtues of the free market.
Gallagher primed the audience by comparing the lootbox controversy to the WHO’s so-called “gaming disorder” crusade and the US government’s unfounded attempts to link gaming and gun violence, then moved on to arguing that the gaming industry’s “right” to self-regulation and the “instantaneous feedback” of consumerism are what we should be trusting to keep lootboxes properly in check, not governments like Belgium’s and the Netherlands’, which have already curbed gambleboxes in their countries.
Last week, Guild Wars 2’s Crystin Cox gave a monetization interview to Gamasutra during which she made one specific argument I wanted to pull out and re-examine. She was trying to explain why lockboxes can provide a “value” to players that they can’t get any other way.
“When we talk about cosmetics, there’s a demand for every individual cosmetic. Like maybe I love cowboy hats, I just want to buy cowboy hats. But there’s also a demand, and a lot of players feel this way, for just cosmetic options. I like cowboy hats sure, but I also like bandanas, and I like clown hair, I like everything. I don’t really have a super strong preference. I just want more things to put in my dress-up box. That demand can be satisfied a lot better sometimes with just giving you a random thing because that can be done a lot cheaper. If you don’t care about which one you get and you just want one, you can get it for a lot cheaper. When you’re talking about games that have rarity, and rarity’s a big part of that game, then lootboxes can be done to distribute something on a small scale, so that not everybody has access to it but some do, as sort of a jackpot item. And then that gets into a little more complexity around the economy and your game, and whether not this is an enjoyable part of your game for people to play, play with the economy of some such. But if it is, then you can use lootboxes to be a pretty good distribution for something that’s very rare.”
Back in 2017, at the height of mainstream outrage over lockbox shenanigans, Belgium became one of the very first countries to take the problem seriously (instead of just passing the buck). The Belgian committee assigned to investigate concluded in November that “the mixing of money and addiction is gambling” and pledged to ban them. At the end of April of this year, the country effectively did just that. Its Gaming Commission spent several months investigating multiple games, ultimately finding that Overwatch, FIFA 18, and Counter Strike: Global Offensive are operating in violation of its laws specifically because of their lockbox mechanics.
At the time, we had only a few scattered quotes from a translated press release, but this week the Commission has released its entire report (and there’s even a version in English). Its goal is clear: to examine “whether the use of loot boxes in video games constitutes a gambling operation in the sense of the Belgian Gaming and Betting Act. ”
EA’s quarterly financial report and investor call turned out to be a doozy this year with quite a bit of useful news. To wit:
BioWare’s Anthem is set to ship “in the last quarter of the year, and in the last month of that quarter,” so if we’re counting by fiscal quarters, that’s March 2019, and no wiggling out of this latest delay, EA. According to PCGN, multiple execs inflated the hype, arguing it’s a “stunning and ambitious” game with a “fundamentally social experience.”
Also, in spite of industry interviews to the contrary, it appears that EA learned basically nothing from the Star Wars Battlefront II fiasco that drove the ancient lockboxes-are-gambling argument out of weary corners of the online gaming market and into mainstream politics. The plan going forward appears to be fighting the perception – now codified in Belgium – that lockboxes are gambling in the first place. “We don’t believe that FIFA Ultimate Team or loot boxes are gambling firstly because players always receive a specified number of items in each pack, and secondly we don’t provide or authorize any way to cash out or sell items or virtual currency for real money,” CEO Andrew Wilson said during the call.
Back in 2017, at the height of mainstream outrage over lockbox shenanigans, Belgium became one of the very first countries to take the problem seriously (instead of just passing the buck). The Belgian committee assigned to investigate concluded in November that “the mixing of money and addiction is gambling” and pledged to ban them.
Now, the country has effectively done just that. Its Gaming Commission spent several months investigating multiple games, ultimately finding that Overwatch, FIFA 18, and Counter Strike: Global Offensive are operating in violation of its laws specifically because of their lockbox mechanics.
So here’s an interesting case that could impact online game development in the US. Apparently, a few weeks ago the Ninth Circuit of U.S. Court of Appeals determined that a casual game, Big Fish Games’ Big Fish Casino, includes illegal gambling. You might be thinking, duh, it’s got casino in the name, of course it’s gambling, but that had nothing to do with the appeals decision, which returns the case to the lower district to reconsider. The ruling instead hinged on the fact that users have to keep buying chips (if they fail to come out ahead in their winnings of said chips, which they probably do because that’s how casinos work) to keep playing.
“Without virtual chips, a user is unable to play Big Fish Casino’s various games. […] Thus, if a user runs out of virtual chips and wants to continue playing Big Fish Casino, she must buy more chips to have ‘the privilege of playing the game.’ Likewise, if a user wins chips, the user wins the privilege of playing Big Fish Casino without charge. In sum, these virtual chips extend the privilege of playing Big Fish Casino.”
If you had expected the Netherlands to be leading the fight against lootboxes, you may be more clairvoyant than the rest of the population. After investigating 10 games, the Dutch Gaming Authority has found that four of the games tested feature lootboxes that violate the Better Gaming Act. That may not sound too serious until you consider that the offending games have eight weeks to make changes to the lootboxes to comply with the law.
Failure to do so can result in fines or just straight-up forbidding the games from being sold in the Netherlands. That’s a pretty big deal.
While the DGA did not specifically name games, the Dutch paper reporting on the situation cites FIFA ’18, Dota 2, PlayerUnknown’s Battlegrounds, and Rocket League as the offending titles. The remaining six titles are not in violation of the law but were still sharply criticized for the lootbox implementation, which is said to target younger players and encourage gambling. It’s also worth noting that each of these violations specifically pertains to tradeable items for real money, which just squeaks in as a gambling option.
How big a deal with the lootbox controversy that finally hit the mainstream last year? Pretty big, SuperData argues. In a new blog post, the analytics firm argues that “the loot box controversy hampered Star Wars Battlefront II out of the gate” as shown by the game’s monthly active users compared to its predecessor’s, and that the resulting dumpster fire has caused publishers to rethink lootboxes and self-regulate or at least modulate their greed – an effect we’ve already seen in the MMO industry too.
“At the upcoming E3, we’re likely to see presenters announce ‘no loot boxes’ or that paid content is ‘cosmetic only’ in order to get on the good side of creators and hardcore gamers,” SuperData predicts. “Loot boxes won’t disappear anytime soon given their success in games like Overwatch (over $600M of loot boxes sold through February 2018). In the short term, though, ‘No loot boxes’ will be the game industry’s own ‘gluten free water’ — and we’re likely to even see this slogan used to market titles where loot boxes would not make sense such as adventure games.”
Nexon isn’t the only Korean studio that has been targeted by the government and fined for dishonest practices with its online games and lockboxes. The South Korean Fair Trade Commission has handed out $950,000 in fines to the country’s studios for deceiving players and failing to provide accurate odds for winning any particular prize.
The three studios punished for their transgressions are Nexon ($875,000), Netmarble ($55,000), and NextFloor ($4,600). The Korea Herald notes, “The [South Korean] FTC’s actions have signaled alarm across the Korean game sector, as it could hurt the sales of in-game items — particularly randomized items, which users tend to continuously buy until they get a desired result — that contribute immensely to profits.”
Is this enough of a penalty to make the eastern market be more responsible with its lockbox policies, or are these fines merely a slap on the wrist? We will see.