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Divulging the Odds — Loot Boxes & The App Store

Posted Jan 9, 2018

Shortly before Christmas, Apple introduced several new rules for the App Store, the most notable of which is related to so-called “loot boxes” and requires developers need to share the odds of the contents before users make an IAP purchase. What does that mean for developers around the globe in 2018?

This is a big change for Apple and brings it into line with laws in China, as well as addresses some of the major criticisms of AAA console and PC games using similar systems that sprang up over the course of 2017.

Apple’s move is an important worldwide move for self-regulation to head off legal challenges around the world.

What’s In a Name?
Lootbox GenericIf an app has an IAP item containing other random items, then Apple considers that a loot box. End of story. The App Store rules officially define the term as “mechanisms that provide randomized virtual items for purchase.”

This is an important step towards industry-wide standardization of the random-item systems that have been popular in mobile gaming for years. Loot boxes, grab bags, treasure chests, and so on, have allowed some developers a bit of obfuscation when it comes to how these items worked.

With a clearly defined definition of the term, Apple has made the first platform-level stamp on what these systems are called. While the term doesn’t hold any legal weight yet, Apple has adopted the most prevalent term used by politicians and lawmakers.

The Ongoing Storm
As mobile gaming has grown, the console and PC gaming industry has sought to capture some of mobile’s best practices for revenue. Microtransactions for one-time power-ups in mobile games made their way to console games from EA, Ubisoft, Activision, and others long ago, for example.

As the trend of loot boxes and “battle packs” made their way into the world of IAP items rather than level-up rewards, lawmakers around the world started looking at the systems with a closer eye.

A Chinese law that went into effect in May 2017 requires “online game publishers” to publicly release the “draw probability of all virtual items and services”. The law also bans the purchase of loot boxes directly with real-world currency. Some publishers have changed their items available to purchase to follow the letter, if not the spirit, of these laws.

Toward the end of 2017, players the world over became enraged at the content-gating and loot box requirements for EA’s Star Wars Battlefront II. The situation escalated to such a point that EA ended up backing down on a number of fronts, though the damage done to the game was likely already done.

Activision’s Fall tentpole title Destiny 2, developed by Bungie, has also seen its fair share of controversy around loot boxes this Holiday season too.

While the most high profile examples of loot boxes have moved from mobile to console and PC, the key fact remains — people want to know what they’re spending their money on.

What Developers Can Do
Apple’s wording in its new rules regarding loot boxes gives developers some room to keep the curtain drawn on many random aspects of a loot box since it only requires the divulging of the chances of receiving item types, rather than specific items.

This gives developers an opportunity to win over customers with truly transparent odds of receiving items, as well as advertising guaranteed items in loot boxes too. If the guaranteed or high-odds items are good enough, users might consider any extra items a bonus, leading to higher IAP in the long run.

For developers with thousands of random items, this might be tough.

Developers should consider ranking the items so that you can divulge the odds in order of greatness. Fate/Grand Order for iOS and Android by DELiGHTWORKS is a good example of showing the odds by “tier” which complies with Apple’s wording.Fate/Grand Order Purchase odds

It’s also worth noting that Fate/Grand Order is upfront about using up the in-game currency (Saint Quartz) users earn before any in-game currency that’s purchase with real money via IAP.

Fire Emblem loot oddsNintendo’s Fire Emblem: Heroes mobile title also discloses the probability of summoning new characters of varying quality. Many mobile titles developed in Japan already disclose random draw odds already, a result of Japanese laws that were adopted between 2011 and 2014 in response to the popularity of “Kompu (Complete) Gacha” style games. The Japanese Consumer Affairs Agency used a law already on the books against “Unjustifiable Extras or Unexpected Benefit and Misleading Representation” and expanded the ruling to loot boxes.

With Apple leading the platform-level charge on how loot box odds have to be quantified and disclosed, developers should expect Google to follow suit in the Play Store soon as well. For developers who haven’t already added the odds into their titles now is a good time to cover all the bases and take a consumer-centric view of the practice.

Transparent loot boxes have the potential to be a huge win for data-minded developers to really deliver value to loot box earners (perhaps via Rewarded Video as well as IAP) by highlighting the value of guaranteed or high-odds items.

Loot boxes and their like aren’t going anywhere, but it’s up to developers to make them a worthwhile purchase for their users.

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