Gambling, for Children | Just Cosmetics – A Loot Box Story

Humble Beginnings

Loot Boxes. Like all great evils, they come from humble beginnings, where perhaps the first time they were utilized was in the 2007 Chinese free-to-play title ZT Online. The prevalence of pc bangs in China, which are more or less LAN gaming cafes, meant players could practically play any popular games for free so long as they were at a cafe with the game available. This, combined with a lack of disposable income to spend on premium titles and widespread, rampant piracy pushed developers to change their approach to monetization. By giving their game away for free and devising content to sell in-game that players will want to buy, they could trump all of these problems and improve their game tremendously, both in terms of accessibility and profitability.

“…these systems are inherently designed to rope children into an experience that is for all intents and purposes gambling.”

The free-to-play supported-by-microtransactions-and-loot-boxes model flourished in Asia and spread its way around the globe, and we all know about the dirty, dirty things that have been going on in the various mobile app stores since then, or the rotten garbage that’s been festering on Facebook for far too long, but for a while, North America’s and Europe’s gaming industries were relatively clean as far as microtransactions, and subsequently in-game gambling went, so long as you didn’t go stomping about in either of those two muck holes.

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The Android and iOS App Stores, where many of the modern schemes in the Western triple-A market were refined in “freemium” mobile games.

As much as I’d like to think – as much as we’d all like to think this lack of microtransactions in our games was out of honor and a desire to preserve them from such indignities as gambling for upgrades instead of playing the game for them, I think we all know in the bottoms of our hearts that they just hadn’t realized quite how juicy of a cash cow they were letting go un-pimped in their domain.

Players Equals Profits

Smelling your untaken money in the air, in 2011 Valve would make what was ultimately a very smart business decision by converting their premium 2007 title Team Fortress 2 into a free-to-play game supported by microtransactions with a loot box and key system. Within nine months of becoming free-to-play, Team Fortress 2 had revenue increases by a factor of twelve, no doubt partially due to their now-much-larger player-base, which had the complementary effect of also improving the game for other players through the increased population.

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By this time, Activision had long-sank its fangs of corruption into Blizzard, and when they released Diablo 3 in 2012 with a fully-integrated real-world-money auction house, they delivered unto the beloved franchise what was, among a myriad of other problems, the finishing blow, the coup-de-grace on a title released by a developer that had previously and up until then hit the nail on the head time after time again with games like Warcraft 2 and 3, Diablos the first and 2, Starcraft, World of Warcraft and all of their assorted expansions. In what was generally agreed to be far too little far too late, the game was salvaged and heavily revamped, but the stain never quite came all the way out. It’s a kind of sadness that’s rare, that’s far too reminiscent of what Square Enix went through with Final Fantasy XIV, an MMORPG they had to quite literally completely scrap the 1.0 of and rebuild from the ground up.

Of course, we’re here to talk about loot boxes, and the point is that the developers saw that Valve was eating. And they saw that Valve was eating good. And suddenly, they were all in their boardrooms meeting with their executives, and they were salivating and foaming at their mouths, and they began devising strategies as to what might best feed them, because they were hungry too.

From Baby Steps to Overreaching

Around Team Fortress 2’s conversion to free-to-play, EA was also getting some bites in, although unlike Team Fortress 2, EA wants to sell you their game at full retail price, and then they want you to spend more money on microtransactions in-game. In their premium FIFA series EA sold booster packs filled with soccer player trading cards of assorted rarities for use in a multiplayer game mode where players build and upgrade their teams using said cards.

EA also pulled some of the same tomfoolery with Mass Effect 3, a premium, full-price triple-A title that featured a co-op mode with so-called “equipment packs” which could be bought either using credits you obtained through grinding out missions, or by spending real-world money on “BioWare points” and exchanging those for the equipment packs.

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EA’s Dead Space 3 was one of the first single-player triple-A titles in the Western market to offer a truly “pay-to-win” monetization scheme.

The envelope would continue to be pushed, and what do you know –  EA are the ones that kept a-pushin’. Their 2013 full-price title Dead Space 3 launched with microtransactions in its single-player campaign, selling crafting materials that could be found in-game to players, henceforth allowing them to purchase advantages such as weapon upgrades outright in what was surely one of the first truly pay-to-win schemes to penetrate the Western market. EA was eating, and they were eating good. Really good. Not good enough to keep Visceral Games’ doors open to continue developing more games, but some beasts know no satiation.

Gambling, for Children

Returning to our friends at Valve – the ones who sort of kicked off this whole feeding frenzy against your own consumers trend – they too had developed a bigger appetite, and with the release of Counter Strike: Global Offensive and its 2013 Arms Deal update, they were well on their way to bigger and better scandals. The skins in CS:GO’s loot crates would go on to create a blackmarket currency fueled in large part by gamers under the legal gambling age, but because of the relatively new existence of these economic systems, they lie in legal grey areas that have been exploited numerous times on record to varying degrees, including famously by Tmartn, who failed to disclose he owned a skins gambling website that he promoted on his Twitch and YouTube channels for several months, to his following, which is made up largely of viewers too young to legally gamble. As recently as June of 2017 case-opening and gambling websites have been exposed as being able to fix rolls on the back end for streamers that promote their gambling service. Reports have even described a so-called “rape mode” that allows contestants to receive only the lowest-valued of items in their winnings whenever it is engaged, regardless of what amounts they may be betting, and it has been alleged that virtually all skins gambling websites operate on this same made-to-be-abused architecture.

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Richard Lewis reports on a so-called “rape mode” that a skins-gambling site architect revealed to him as standard in most skins-gambling websites.

“They’re Just Cosmetics”

Back to the loot boxes themselves, we arrive finally at Overwatch in 2016. Activision Blizzard has been a thing for quite a while now, and microtransactions are here to stay. Overwatch releases for $40, or $60 for the Collector’s Edition that all games need to have for some reason (dev/pub greed), and it’s a smashing success. The kind of success you’d expect Blizzard to achieve with a new franchise debut. And loot boxes are one of it’s core features – but don’t worry, they’re just cosmetics. If you want a particular skin or weapon, the only means to obtain it is to receive so many duplicates at such an abysmal return rate on said duplicates in terms of crafting materials that it could take weeks of farming to save up just for one item, and the only way to get that item you want is to farm more and more and more for that one item, or throw more and more money at loot boxes until you have enough dust to craft that one item. Or, you catch a lucky break – one hell of a lucky break – and get it as a drop. “But, they’re just cosmetics, so any criticism of this system is useless or unfair.” That argument just doesn’t hold any water, and the issue for me goes back to the fact that these systems are inherently designed to rope children into an experience that is for all intents and purposes gambling. The issue for me is that time and time again, these developers ask to reach inside your pocket, while flashing giant “buy” buttons in your face, while doing market research and patenting matchmaking that will encourage you to spend for the premium item that your spender opponent just beat you with because they had an unfair objective advantage. Enough is never enough when it comes to corporate greed and consumers will eventually have to draw a line somewhere. Overwatch thankfully has not been perverted to the extent of selling anything beyond cosmetics, but to talk about the modern scourge of microtransactions and loot boxes in gaming and not mention Blizzard’s enormous role in their recent popularity would be to do the history of this evil manifestation a disservice.

Blizzard certainly isn’t perfect, and they certainly are going in a scary direction. They’ve recently announced that certain skins for new Heroes of the Storm heroes will now only be purchasable with gems – a currency that is primarily only available via purchase with real-world money – as bundles. This prevents players who have been saving the other in-game crafting materials from circumventing a real-money purchase, but thankfully a big corporation like Activision Blizzard has the corporate double-talk to defend this decision for days, and they simply presented it as a win for their players. We can all respect that they have to make some money, but choosing bigger bucks over happier players has been part of the Heroes repertoire for a while now – for instance, by creating one legendary skin, coloring it five times, and adding it to the game as five distinct legendary skins – so, maybe you get lucky and the skin you want drops out of that loot chest! But it’s not in the color you want. And if that same skin drops again in the same color, you can’t just unlock another color variation, such as the one you want – you have to accept 400 shards, or 25% of the full crafted value of a legendary skin. This system may seem a little “accidentally unfair” and perhaps it even started that way, but this is a system of severely poor diminishing returns that Blizzard has used time and time again, with intent and to an effect of wild success. They’ve wholly embraced the shift to “gaming as a service,” but we’d have to be blind to not see what may be on the horizon for them, and it’s scary, and it’s disappointing. Lately, most of Blizzard’s games revolve primarily around satisfying daily quest requirements, and most of them are lacking a sense of real progression, and that seems to be a big part of what “gaming as a service” is. They’ve recently even gone so far as to release Starcraft 2 as a free-to-play game, bringing it in line with Heroes of the Storm and Hearthstone. Starcraft 2’s multiplayer may benefit from this move but so far there’s no reason to expect it will contribute to any long-lived major increase in its player-base. Regardless, it’s a bold move that brings a great game to more people, but it’s hard not to question the motive in comparison to the rest of their modern lineup. Blizzard’s priorities have evolved over the years: creating amazing experiences through innovative, addicting, and rewarding video games has become second to conjuring up anti-consumer schemes in the name of satisfying shareholders.

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Most of Blizzard’s modern line-up relies upon daily quest systems to unlock currencies as a means to circumvent having to make real-world purchases – but as mentioned with Heroes of the Storm, the options for non-paying players are becoming fewer and fewer.

Microtransactions Today

The big story right now, of course, is Star Wars Battlefront 2. Everyone else has already said everything there is to say, and I highly recommend the most recent Co-Optional Podcast, or any of the relevant videos Jim Sterling has put out over the past month or so, should you need to get caught up. It’s the most blatant example of a greedy, pay-to-win money-grab that we’ve seen from a developer to date, and of course it was EA, and of course they did so using an intellectual property (Star Wars) they knew it would work with. It’s worth mentioning, people are currently rejoicing as EA finally decided to remove the microtransactions from Battlefront 2. They realized that they done goofed and are probably tired of the negative press, so they removed the microtransactions. Well, temporarily. Some people are patting EA on the back and saying good on you, but as we’ve covered, it’s temporary, which means sooner or later they’ll be back –  and when they are, we can judge their new system on its own merits, but it’s EA, so we can anticipate that they will be awful, they will probably still have pay-to-win elements, and frankly I wouldn’t be surprised if they were hardly changed at all. Perhaps this suspension is just a device to weather the debut of their product – because games as a service is not just about launch sales. It’s about ongoing sales.

“Blizzard’s priorities have evolved over the years: creating amazing experiences through innovative, addicting, and rewarding video games has become second to conjuring up anti-consumer schemes in the name of satisfying shareholders.”

And the big story before Battlefront 2? It was Warner Brothers and Middle-earth: Shadow of Mordor. One of the executive producers at Monolith, the developers, a gentleman by the name of Michael Forgey passed away. Warner Bros released a DLC in Forgey’s memory and actually attempted to profit off of Forgey’s death under the guise of a charitable cause. There was a charitable cause, of course, but it would only receive a portion of the DLC revenue from a small portion of the areas Warner Bros was collecting money from. The greed of these publishers. I honestly don’t know what to say on this one. It just disgusts me.

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The Forthog Orc-Slayer DLC for Middle Earth: Shadows of Mordor was used deceptively by Warner Bros. to profit off the death of one of Monolith’s developers – despicable.

There are still lots of great indie things happening – just look at Cuphead – and in a lot of ways 2017 has been a great year for video games. Some major studios are now even vowing to stay away from loot boxes, cognisant of the detriment they have yielded for some of the titans of the industry. Within the past few days, it’s been announced that Belgium is investigating Blizzard and EA in association with their loot boxes and the gambling element present in their games, but it’s too early to know just what to make of this investigation yet. One thing is for certain with this developer greed: it will get worse before it gets better.

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Gambling, for Children | Just Cosmetics – A Loot Box Story

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