Tuesday, 13 April 2021 00:20

University of Sydney explains how the gaming industry justifies in-game gambling

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With over 10% of gaming revenue coming from in-game gambling, such as loot boxes, the University of Sydney says game developers are operating in an increasingly competitive sphere, and are looking to in-game gambling to increase revenue, arguably to detriment of players.

As at last year, we're told the global gaming industry "was valued at USD$162B (AUD$213B), with at least $20B (AUD$26B) of this revenue sourced from in-game gambling mechanisms.

"Loot boxes – virtual lucky dips that players can purchase with real-life money – have become prolific: almost 60% of games in the Google Play store in 2020 contained them."

A literature review published in the Journal of Gaming and Virtual Worlds, led by a University of Sydney researcher, identifies how the gaming industry defends in-game gambling mechanisms: 

  1. It cites the rising costs of game making. For example, in 1996, it cost around $1.7m to make a major blockbuster game, like Crash Bandicoot. By contrast, one of the biggest games of 2020, Red Dead Redemption 2, cost more than $250 million. Despite rising profits from games, the games sector uses such figures to defend gambling-equivalent monetisation methods.
  2. It states in-game gambling is necessary for profit-making, due to greater competition in the gaming marketplace.

Lead researcher, Lecturer in Digital Cultures Dr Mark Johnson, also found a third reason for the rise of in-game gambling: game development companies are increasingly profit-oriented.

“A major shift is taking place in the games industry, from creating a cultural product and trying to make enough money to be sustainable, to loading games with monetisation methods,” he said. "As a result, the industry is now constantly finding new ways to extract money from players. Loot boxes, which are effectively gambling devices, are highly effective, as they kick in after players have been recruited through the allure of free play.

“This is inevitably leading to changes in the types of games that are being created, how players experience games, and public opinion on digital gaming,” Dr Johnson concluded.


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Alex Zaharov-Reutt

Alex Zaharov-Reutt is iTWire's Technology Editor is one of Australia’s best-known technology journalists and consumer tech experts, Alex has appeared in his capacity as technology expert on all of Australia’s free-to-air and pay TV networks on all the major news and current affairs programs, on commercial and public radio, and technology, lifestyle and reality TV shows. Visit Alex at Twitter here.

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