Video games are usually commercial products that, like books, TV and films are designed to both entertain and make money. However, while there is broad awareness about the costs of other media, because video games are still relatively new and evolving it’s important to understand how they are sold.
Understanding this commercial aspect of games not only ensures there are no surprises, but also enables parents and carers to find the games that offer the best value for their family. It’s in this context that loot boxes are best understood.
What Are Loot Boxes?
Loot boxes are a longstanding way to offer players the chance to win sought-after items in the video games they play. This may be something cosmetic like an outfit or “skin” for a gun. But it can also be something that helps them advance like a new character or piece of equipment.
Loot boxes are only part of a small number of games. Where they are included in games, they’re usually unlocked completely for free as part of game play - for example, when a player levels up - and are an optional
The big way that loot boxes differ from other types of ways of making money is that you have a random chance of winning certain items. While a loot box always gives you something every time you open them, , you only discover what you get when you open to them..
How Do They Work?
Loot boxes are purchased for a one-time cost. This is usually a small amount but does range in cost. Once purchased, the player opens the loot box to reveal the item they have inside. They are never empty.
Similar to mystery toys or football stickers, the rarity of the item revealed in the purchased varies. The rarer items have more value in the game, although they have no monetary value. Once opened the item is added to the inventory of the player and can be used in the game.
Although loot boxes themselves are a small transaction, they are often purchased with in-game currency that needs to be acquired with real money. This game currency is commonly sold in a range of denominations from a few to hundreds of pounds. Additionally, there is no automatic limit to how many loot box style purchases a player can make if the device they are playing on has not been set-up to do that.
Why Do They Exist?
Loot boxes exist as a way to offer players access to a range of items of different rarity. This combines the surprise of opening the item with the ability to access harder to obtain items regardless of how much you spend.
Loot boxes aim to provide balance to games too. By providing content at random, they allow players to unlock the best items even if they don’t pay. This prevents ‘pay to win’ approaches to play.
They also encourage variety in play. While players might unlock content that isn’t exactly what they wanted, loot boxes can reveal in game items or cards that can players hadn’t considered useful and show them their value - helping them change tactics or strategies in the process.
They exist as a way for video games to make money without charging an up-front fee. Games like Fortnite are free to start playing, and then offer a range of in-game purchases, some of which are loot-box in style.
Other games use loot-box style purchases as a way to extend features. FIFA, for example, can be played without any additional purchases. You can extend the experience of playing the Ultimate Team mode by purchasing packs of players that are opened to discover who you have won.
How Do They Make Money?
Loot boxes make money for game developers by offering small transactions that players can make as often as they like. These pocket-money purchases then go towards funding further development of the game.
It’s effective because it enables games to build a large player base without having to charge them to start playing. It lowers the barrier to entry in a way that democratises gameplay. Players can then choose to make these optional additional purchases if they like a particular outfit or item.
Concerns About Loot Boxes
Loot boxes have raised concerns because in widely reported rare instances children have racked up large bills without parents realising. The combination of a credit card associated with a game console or smartphone, no passwords set-up and the ability to make repeated purchases of loot box style items make it possible to spend a lot of money very quickly.
Although this controversy usually centres on loot boxes, it’s really a wider issue with in-game purchases in general and beyond that to ensuring video game accounts are setup appropriately.
The loot box style purchases seen most harshly by parents and carers are those that exist in games that have been designed specifically to encourage (and in some cases require) players to advance through the game by making purchases. These pay-to-win style games are in fact quite rare on smartphones and tablets, and even rarer on consoles.
Solving Loot Box Concerns
Once you understand how loot boxes work and why they exist you are in a position to set-up your gaming equipment to ensure a safe and sensible experience.
In August 2019, publishers and platforms made an industry-wide commitment to publish the probabilities of obtaining a paid randomised item from the contents of a loot box by 2020. This ensures that players know the odds of the likely outcome of a loot box before purchase.
Whether you play on a console, computer, smartphone or tablet device, you can specify how money is spent on your system. The parental controls and family settings (link) enable you to set spending limits or require a password before any transaction is completed.
You can also opt not to associate a credit card with your child’s account. When they would like to make a purchase you can either add a specific amount as a one-off transaction. Or you can avoid entering any credit card details by using the book-token style vouchers purchased in stores or online to get them credit.
It’s worth noting that this can take a little time to set-up but is time well spent. On consoles, it’s important to set these settings with a parent account and set up children with a child account. You can then specify a password on the parent account to make sure there is no way to change the settings without your say so.
It’s a good idea to apply these settings with your child. This not only ensures they understand how much they have to spend each month, but also creates an open context where they can tell you about any unexpected transactions. This is also a good way to start them on a journey of understanding the value of virtual currency and online purchases.