If ever there were an article that would likely get someone flamed, this would be a pretty good example. After all, right now there are pitchforks drawn for the very concept of loot boxes and anyone daring to advocate them is going to be tarred, feathered and run out of town.

This article is not going to argue in favour of loot boxes; only you can decide whether they’re a benign method of introducing a collection mechanic while earning the developer extra resources, or the worst thing to ever happen to games. Rather, what my aim is here is to avoid the sensationalism that surrounds the topic, highlight some of the pros and cons associated with microtransactions generally, loot boxes specifically, and perhaps suggest some rationale where the need to be quite so angry about them doesn’t exist.

For the past decade, I’ve taught many people working in the games industry across numerous companies that the best way to make a gamer angry is to talk about money. At all. The second you associate commercial concerns with the entertainment form about which people are passionate you cheapen it. You transform exciting, escapist worlds and adventures from games into products, changing gamers into customers, or worse consumers, you talk about brands, franchises, monetisation… Way to get me fired up about what should be a highly enjoyable experience. It’s a constant reminder that there are people out there in games-industry-land that don’t see gamers the way they see themselves, the simply see a dollar value.

Now, the rational-headed me who has the best part of 20 years within this industry understands the necessity of thinking in this way (more on that in a moment), but the me who sinks hours on a daily basis into playing games feels like I’m just another mark.

Being able to see both sides of this picture from a first person perspective means that I’ll evaluate in-game purchases on a case by case basis, buying them when I feel the value is good, rejecting them when I don’t, but I’m far from being a typical gamer. For one, I rarely finish games – largely because my preference is for open-ended experiences, equally because I simply don’t have the time. Secondly, I don’t give a hoot about collections, achievements, completionism or “winning”. I rarely play narrative-driven games, and even when I do, I’ll bail out frequently after a few sessions’ progress. I’ve got maybe 4 hours into the GTA 5 campaign, but 50 into GTA Online. Oh, and I’ve worked for several Evil Publishing Companies. I’m not typical.

Why are loot boxes bad?

So what is it about loot boxes that is particularly offensive to so many players? There are numerous reasons, but let’s cover off a few of the biggest:

– (Version 1) I paid full price for this game, I shouldn’t be expected to pay more afterwards.

– (Version 2) I paid full price for this game, I should be receiving the full experience, not having parts of it locked away behind a pay or grind wall.

– It’s just developer/publisher greed.

– I am being forced to pay more money or grind for hours.

– This kind of thing used to be free.

– Hey, remember when these were called cheat codes and you could just use them for nothing?

– It’s nothing but gambling.

– Won’t someone think of the children!?

Did I miss anything? Be sure to add any other staples you’ve seen in the comments.

The only one of these I’m going to dismiss out of hand is those who’ve referenced children. Purely because this reference has been made in a very cynical way – the same people who are currently yelling about children being adversely affected by these mechanics, are the same people who will textually light you on fire if you suggest that violent video games affect those same children in any way. You can’t have it both ways. From my own perspective, yes a mechanic like this does manipulate children adversely, but I also believe that exposure to violent games desensitizes those same children. Age ratings are there for a reason, and gambling, simulated or real should be fully covered.

It is payday

Why do loot boxes and microtransactions exist in the first place?

The answer is straightforward, and you won’t disagree. It’s money. That’s not the only reason however, the second is that they also represent a great player retention mechanic; giving players more reason to keep playing a game, keeps them playing that game for longer. The longer that player is in your game, the longer the game remains alive. The longer your game stays alive, the better you can make money from it. Hmm. So the first reason is money and the second reason is, in a roundabout kinda of way, money as well.

So it’s all about money then? Yes it is, but the motivation is different to the simplistic “THEY’RE JUST BEING GREEDY” you may have heard once or twice.

From the moment you start playing a game, pretty much any game, especially those with online components or that release updates and patches, you are eating into the revenue that has been made by the company responsible.

Let’s say a brand new development studio has 100 people in it. They work for 2 years to make a game and release it, complete (no early access here). The game cost $24M to develop ($10k per developer month, times 24 months, times 100 developers) and was funded by a bank, an investment group or a publisher. Then additional money was sunk into the project in order to market the game. It might be the dark arts of game publishing, but if you have aspirations to sell a significant number of copies of your game, you’re going to need some marketing.

When the game goes on sale, repaying all development and marketing investment (plus interest) is the first mouth to feed, meanwhile the studio is still burning through money at a rate of $1M per month – and that’s before you take into account the running costs of any servers or other technology the game requires. If the game has uncaught bugs that require patching, you either get that patch made or damage your reputation. If you’ve unfulfilled promises you made during development, you either add those as updates or again damage your reputation. Either way, you’re now burning money with no further payday in sight.

From the second the game releases, any profit it is making is being consumed at a rapid pace, and those are profits the studio would (almost) always like to use to make their next game – hopefully without having to lean on a publisher or other investment source.

Ever read a story about a studio releasing a game, then laying off a large amount of staff immediately afterwards? This is why.

But we’re not talking about freedom-fighting independent or part-independent developers are we? The main focus of player fury towards loot boxes is reserved for gargantuan publishers adding them to full priced games. These publicly traded corporations routinely speak in astronomically large figures on investor calls, earning millions if not billions from the games they release. How on earth can anyone justify them employing the same commercial mechanics, especially when those games are so expensive for people to buy in the first place? Because the same thing holds true – any development time not invested in something that has commercial value is a big problem.

Your smash hit game releases and your attention shifts to the next project, but you do not need the full studio to be working on it (it’s actually impractical to do so), so do you lay off programmers, artists and designers who aren’t yet required, do you keep them hanging around with nothing to do, or do you keep them engaged in work that has commercial value? You don’t want to lay them off – quality development staff aren’t commonplace. Sure, you could keep them around with little to do, but that’s not going to win you any friends among your investors – they get to call the shots now, and their motivation is pretty straightforward, welcome to capitalism.

So why not focus purely on fully-fledged expansions rather than this nickle and dime stuff? While full DLC is another route to the balancing act between games, if your audience has moved onto other games by the time the pack is released your likely sales have shrunk dramatically. Loot boxes containing collectible items however, are well proven to hold the attention of players beyond their normal lifespan in a game. In other words, they maintain the size of your audience until your DLC pack is ready to roll out.

That they can also generate additional profit, is a second good reason to employ them as well.

What about the argument that the kinds of things included in loot boxes used to be free? While the quantities involved weren’t as prolific, it’s certainly accurate to say that many things used to be freely included in games, but then games used to be a whole lot more intrinsically profitable. Instead of generating single digit multiples of their development cost (as the most successful, publisher backed games do now), games were making double or triple digit times the amount they cost to develop.

In the PlayStation 1 era, a monster-selling game would regularly cost 1/100th the amount an equivalent game does now – because they were easier to make, and took far fewer people. The original Tomb Raider development team at Core Design had just 6 people in it. Additionally, there were no servers to support or patches to create. These things were free because they were often left-over from primary development, or created because part of the team finished their work ahead of the finalised game, or simply because the amount of money the game was going to make was enormous compared to the development cost.

Pay your money, take your chances

Are loot boxes gambling? In most cases, they’re not. For one thing, you’re guaranteed to receive an item of value that the developer considers equal to the cost of the box. Whether you consider that item to be of equal value is immaterial – especially if it cannot subsequently be sold for real money. If I, as a developer, want to charge you £50 for a floppy hat for your character it is up to you to decide if it’s worth the money or not. If I decide that one 5th of your loot box contents is a 10 minute XP booster, and that it’s worth $0.50 that’s what it’s worth. Whether that’s what you’d be prepared to pay for it if it were standalone notwithstanding.

The recent petition submitted to the UK government outlines the legal position here, and as much as various media sites have said the answer was vague, it’s not:

“Where items obtained in a computer game can be traded or exchanged outside the game platform they acquire a monetary value, and where facilities for gambling with such items are offered to consumers located in Britain a Gambling Commission licence is required. If no licence is held, the Commission uses a wide range of regulatory powers to take action.”

If the item in question cannot be traded for cash, regardless of whether you believe it was of high enough value for the cost of the lootbox or not, it is not considered gambling. There’s a reason eBay doesn’t allow the selling of in-game digital items, or accounts.

Okay, so there are (your mileage may vary) good commercial reasons for the existence of loot boxes. Does that mean we, as gamers, should just blindly accept their presence?

No. Not even slightly. If you dislike loot boxes, don’t buy them. If you oppose that they exist in any form, don’t buy the games that include them. If you want to see change, persuade others to follow suit.

Are they 100% anti-consumer in nature?

Again, no. Some are better than others, and you’ll know when you are in a game that does them well, because you’ll immediately want another one. Not because you were short changed, but because what you received was great. If you’re getting nothing but duplicates, boosters, rando-currency or other “meh” items, you don’t need anyone to tell you it’s a crap loot box, you know it already and chances are you won’t buy another one.

Ultimately, you are the one to decide whether a loot box is bad, benign or good and your behaviour when confronted by them will influence whether they stick around or not. The one thing to keep in mind throughout, is that funding beyond launch is needed for almost every game. If loot boxes were to disappear overnight they’d be replaced with something else. Hopefully whatever that is will be better. In the meantime, you don’t have to let them come between you and a good game, but if you’d sooner protest with your wallet in hand, more power to you.

I’ll leave you with one final thought on the subject. Which game do you believe is more likely to receive developer support post-launch? The one that is still making money through ongoing commercial opportunities, or the one that isn’t?

Disclosure of obvious bias: Green Man Gaming sells loot boxes. Historically, these have contained collections of indie titles of varying quality (as measured by user reviews) with occasional star prizes. The pricing of these loot boxes was based on the minimum possible non-discounted price of the games offered within them. The response to these loot boxes has at best been “mixed”, but more frequently for most people buying them hasn’t been an outstandingly positive experience. We will be addressing this with future loot box offers, listing the possible contents along with the odds of receiving a particular title in those loot boxes. We don’t believe this mechanic is inherently good or bad although we accept that some of those offered previously have not lived up to expectations in quality. We want to ensure that those who choose to buy a loot box have a clear view on whether it is or isn’t in their interest to do so, the goal being that every title included is objectively a quality title. Subjectively, of course, this is down to you to decide.