Deepest Pockets Win - Monetisation and the Video Games Industry

Mobile games, in particular, contributed to 49% of this figure, an important detail as they have an undeniable association with monetisation.  

For instance, adverts (ads) in mobile games earn the developer $10 to $50 per 1,000 views (though the exact amount varies depending on the game and advertising network). 

This makes it a highly profitable format, thus leading to it becoming ubiquitous in the mobile games industry. 

Furthermore, the industry is commonly associated with in-app purchases (also known as IAPs), which do, indeed, contribute to over half the revenue generated by mobile games and are almost as frequent in the free-to-play market as ads.  

However, unlike ads, IAPs can often be insidious in their implementation.  

The most infamous example is the concept of ‘loot boxes’, which first appeared from 2004 to 2007 and have remained a popular form of monetisation in many free-to-play games and even some paid titles. 

At their core, loot boxes are consumable items that can be redeemed by a player in exchange for a random selection of in-game items.  

However, they have faced much criticism, with their use of interfaces deliberately designed to seem appealing and trigger a positive psychological response compared to similar techniques used by slot machines or roulette wheels.  

Their use of rarity tiers to dictate the chances of certain items being rewarded, combined with systems such as ‘pity timers’ where redeeming a certain number of loot boxes increases one's chance of being rewarded with a rarer item, have further been criticised for feeding into a negative compulsion loop that contributes to video game addiction, itself compared negatively by critics to gambling addiction.  

Another less controversial system of monetisation in video games are ‘battle passes’, which, though originating in 2013, became hugely popular five years later in 2018.  

Battle passes constitute a system where players are given quests or objectives to complete to earn points which advance their rank, with each level giving players a prespecified reward with the rewards given changing at fixed intervals.  

Often, they have a lower and higher tier of rewards, with players only receiving rewards from the lower tier unless they pay for access to the higher tier where rewards are often greater in volume and more unique.  

Players may also be able to pay real money to advance their rank without completing missions.   

At first, this seems to address many of the core concerns of loot boxes as battle passes have fixed rewards and don’t contribute to addiction, but they, in turn, have been criticised for manipulating the idea of FOMO (Fear of Missing Out) to pressure players into paying for higher tier rewards which are often unique and rarely return after the battle pass expires.  

Both loot boxes and battle passes are also criticised for creating a ‘pay to win’ system, where a game does not reward players for effort or understanding of the game’s mechanics but instead for spending money on IAPs.  

This is more evident when one considers that a paper completed for the Journal of Business Ethics interviewed 1104 gamers and, using the UK’s Unfair Trading Regulations to define ‘problematic’ in-game transaction practices (excluding loot boxes due to their prominence), found 35 accounts of said problematic features.  

Out of these, some of the most concerning were reports of games coercing players to spend real money by, for instance, featuring systems that force people who do not want to spend on IAPs to invest disproportionate amounts of time grinding for gear or experience points or waiting for lengthy digital timers to complete to progress in the game.  

 As well as this, it was also reported that some games feature unfair matchmaking systems designed to pit players against better-levelled or equipped opponents who have an unfair advantage, making them feel a need to invest in IAPs to engage in balanced competition.  

All in all, this data reveals that many games in the modern market are being designed to reward player spending instead of effort.  

Some progress has been made, such as, for instance, many countries endeavouring to bring loot boxes under the jurisdiction of gambling laws.  

However, due to the difficulty defining and enforcing these laws, they are often ineffective. Beyond loot boxes, other negative monetisation practices have received little attention.  

It is clear that more needs to be done: we are being presented with ever greater quantities of evidence that clearly suggests a presence of predatory practices being used to the detriment of gamers, and without government legislation to regulate these trends, they will only become more widespread.