Opinion – Video Game Gambling is a Bad Business Model

….okay, so it actually is an excellent business model.

Video games have undeniably undergone a number of important additions and changes to their business model such as the rise of free-to-play games, pay per month MMOs, and the old standby of pay once.  These models have allowed for the development of unique and different games that might not have worked otherwise following previous practices.  Riot Games’ League of Legends stands out as a beneficiary of these changes, but plenty of other games rely on them too.  The video game industry is adding another new strategy in the form of loot boxes.  Unlike the previous strategies, loot boxes and their spinoffs rely on the same mechanics that fuel gambling and addiction.  The industry is now faced with a very real question:  Is addiction a worthy strategy for monetizing video games?

Economically, gambling and addiction approaches make a lot of sense.  After all, it works for a wide range of business including casinos, racing tracks, and organized crime.  By targeting the mental makeup of addiction prone individuals, these industries accrue enormous sums of money despite severe legal restrictions and often returning to the consumer nothing for the cost of their services.  Since the mechanisms for addiction are reasonably well understood and aren’t tied to the quality of the game (see: slot machines), developers can consistently produce high quality addiction mechanisms while not worrying about making a high quality game.  Finally, addictive games tend to review well as critics and players alike take the “addictive” nature of the game as a sign of how compelling it is rather than an example of targeted manipulation.  Seen in this light, introducing gambling mechanics into games makes the same strong economic case as they do in casinos.

If the economic benefits are the same, so too are the moral hazards.  The business model is designed to take advantage of the addictive personalities of big spenders (“whales” in developer speak) regardless of the very real damage that the addiction does to these people’s lives.  In enhancing the addictive nature of games, developers are deliberately preying on the weakness of certain individuals to extract as much money as possible.  It’s not hard to see how that creates very thorny moral issues that gaming hasn’t yet had to deal with.  Games have relied on gambling mechanics in the past (Diabloesque loot drops come to mind), but they’ve never tied those mechanics to real money.  The addition of money means that games can now do real damage like they never could before.

Gambling also harms the games themselves.  Developers are now looking for ways to include gambling mechanics into their games regardless of whether a game actually benefits from it.  The most obvious example is EA’s Star Wars: Battlefront II where key elements of the multiplayer were stuck in loot crates to promote their usage, but that’s hardly the only game.  Genres that don’t have space for these mechanics are pushed aside in favor of those that do.  The push among major game makers is figuring out how to squeeze more money out of addictive people rather than create good games that incentivize the broader gaming crowd to buy them.  Like the open world fad before, we can expect developers to invest heavily into this market to the exclusion of everything good that came before.

Just to be clear, there’s nothing wrong with making money.  There’s nothing wrong with providing extra content for gamers who want more from a game.  This is all a normal and desirable part of the video games industry.  The problem is when the developers cross the line from convincing people to give them money to preying on addictions.  At that point, the game developer is no better than the casino that advertises to gambling addicts or cigarette companies that target people with mental illness.  It’s a disgusting business model that should have no place in the gaming world today.


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Filed under Opinion, video games

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