If you have played video games for decades, you may remember when your success largely depended on your skill. Although gameplay prowess still matters, other aspects also determine how far you get in quests and which levels you reach. That’s due to microtransactions and loot boxes in video games. When did these additions start becoming part of video games, and why are they so widely seen now?
What Are Microtransactions and Loot Boxes in Video Games?
Microtransactions and loot boxes are slightly different in the video game world, but they have many similarities. You can buy both things to improve your circumstances or enjoy customized elements.
Microtransactions occur while someone plays a game. Some are merely cosmetic, allowing people to buy something that changes the appearance of a character or landscape. In other cases, people pay real money to acquire in-game virtual currency to spend on things such as boosts, powers, lives or special items. Alternatively, people may buy microtransactions that expand the game’s content, such as by allowing them to explore additional storylines or lands.
Loot boxes are similar to microtransactions because people buy them while playing. However, there is an element of surprise because purchasers do not know what’s inside until they spend money on and redeem the loot boxes. Think of them as the video game equivalent of the mystery boxes and grab bags many companies offer to entice current or potential customers.
Why Did Microtransactions and Loot Boxes Become Popular?
Loot boxes originated as an off-shoot of loot-drop systems, where players would randomly receive goodies while playing particular games. However, the first known instance of loot boxes as we know them today occurred in June 2004, within the Japanese version of the MapleStory game. In that case, players spent 100 yen to buy a ticket they could redeem at in-game booths, allowing them to get surprise items.
Then, a few years later, loot boxes appeared in a Chinese game called ZT Online. An interesting characteristic was that it was a free-to-play title. Executives realized that urging players to pay for extra items opened a monetization opportunity they could not otherwise get because the base version of the game did not have an associated fee.
That insight helps explain why microtransactions and loot boxes are so popular. Video game company leaders want to make their titles as profitable as possible, and one well-established way to do that is to create an additional revenue stream.
Microtransactions and loot boxes in video games also gained momentum when people needed nothing more than web browsers to play some games. “FarmVille” — which gained prominence in 2009 — is one of the earliest examples.
The company that launched quickly earned a reputation for its data-driven approach to business. A former employee said hundreds or thousands of dashboards allowed workers to see five-minute slices of people’s interactions. They could then use that data to see which features enticed players most, shaping company leaders’ future monetization decisions.
Additionally, people began seeing the appeal of microtransactions when they realized how difficult it may be to get to their desired points in games. They understandably think a one-time purchase could give them a boost, but many individuals don’t just do single transactions.
The Payment-Related Problems of Microtransactions and Loot Boxes
Microtransactions and loot boxes in video games are now common, but that does not mean everyone loves them. One of the main complaints is that the base versions of video games are expensive enough. People believe they should not have to pay more for the same opportunities as those who have decided to spend money on microtransactions and loot boxes.
Even though “Fortnite” is free to play, it made $2 million daily from iOS users’ microtransactions after launching in 2008. That figure shows the massive interest in these perks. However, most people know how easy it is to lose track of spending. That’s especially true since we now live in a world where people can pay for things by tapping their cards or not using physical versions after they’ve stored their payment details.
The lack of barriers make things convenient, but they can also result in players buying items without permission. Video games have fans of all ages, and many are young enough that they may not have bank accounts and payment cards yet.
In one case, the parents of an eight-year-old boy were shocked to learn that he unintentionally spent $4,000 while playing video games. The adults eventually got refunded, but it took months. A related element is that the virtual game worlds may blur the lines between fantasy and reality. That could mean that people believe they’re spending “fake money” by using a currency that only has value in the game. However, what is likely happening is that they are using real money to buy things that are only worth something in the game environment.
The Scary Link Between Loot Boxes in Video Games and Gambling
People in multiple countries have also spoken out about a particular characteristic that worries them about loot boxes: The uncertainty of what you’ll get. Anyone who has ever stepped inside a Las Vegas casino or tried a gambling app knows that element is also front and center in those environments. When people do not get the outcomes they want, many convince themselves they’ll give it “just one more try.”
A 2022 study of adults in Canada also found that loot box purchasers could be twice as likely to gamble versus those who do not buy them. Similarly, those who buy loot boxes have a higher likelihood of developing gambling problems than their counterparts. Legislators in various places, including Germany, the United Kingdom, Belgium and Australia, have proposed or enacted measures against loot boxes in video games. They range from attaching warning labels to games to banning the goodies.
Additionally, some people who already find it challenging to limit other forms of entertainment, such as their smartphones, may find loot boxes particularly alluring. That is especially likely for those who feel they just need a slight advantage over other players to get ahead in the game.
Employees at Las Vegas casinos must fill out forms whenever they change slot machine odds. However, since there are no widespread regulations for loot boxes, only people at the game companies know how likely the average player is to find genuinely valuable treats inside.
Loot Boxes Are Widespread and Potentially Risky
Even though many of the world’s most popular games have microtransactions and loot boxes, that doesn’t mean these in-game extras are harmless. If you choose to engage with those offerings, the safest approach is to set limits for yourself and be strict about staying within those boundaries.
Also, if you share a bank account with a spouse or use another arrangement where your spending decisions impact others, talk to them before adding a credit card to a game account. These precautions will help you enjoy extras when you wish while minimizing the possible unwanted effects.
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