In a new study from Juniper Research, reports indicate that revenue from loot boxes used in online video games is expected to exceed $20 billion by 2025. This figure represents a $5 billion increase from the revenue that was reportedly generated in 2020.
A loot box is a “consumable virtual item” that players can redeem in-game for a variety of prizes. The prizes include features like character customization, new game-changing armor, or new weapons.
“Loot boxes in their traditional form are often considered exploitative; leading to increased legislative scrutiny,” writes research co-author Nick Hunt. “We expect to see game publishers react to this in future by changing loot box formats, in order to keep them compelling and outside the legal realms of gambling.”
According to Juniper Research, legislation restricting loot boxes is expected to be rolled out of the next few years, especially in Europe. As a result, several publishers have begun to develop new ways of using loot boxes in order to bypass the new rules.
The Profit‘s Take:
The loot box revenue growth projected here is impressive. This is especially true in light of the public backlash against loot boxes. My view is that only regulation can stop lootboxes, and I don’t think it’s necessary except in the case of young children. The reality is that most gamers continue to buy lootboxes (speaking with their dollars), and the most vocal opponents are likely not the big spenders in games. Thus, the demand for lootboxes will continue to grow and perceived resistance will not slow this down.
(All information was provided by Which-50)