Skin Betting, Loot Boxes and the Future of In‐Game Monetisation

Since the dawn of video gaming, companies have been seeking new ways to monetise games, ranging from multiple versions to subscriptions. However, some of the most recent forms of monetisation involve elements of gambling, such as skin betting and loot boxes. Our article will examine the various methods of monetisation, their effects and the future of gaming.

Arcades: The Start of Monetisation

One of the earliest forms of video game monetisation was arcade cabinets. Before people owned consoles and could play at home, they would go to arcades and play whatever was available on dedicated machines. To play arcade games, players had to insert coins, and if they lost, they had to insert another coin to continue. Some popular arcade games include:

• Pac-Man
• Street Fighter
• Mortal Kombat
• Space Harrier
• OutRun

Many arcade games were considered “quarter munchers” as they would create unfair bosses or levels to extend gameplay and earn more quarters. While they aren’t as popular these days, arcades still exist and often use prepaid cards instead of coins. However, as people moved from land-based casinos to Microgaming casino sites available to UK players, videogame players moved to consoles and other monetisation methods. These include loot boxes and gambling.

X Marks the Loot Box

Loot boxes are virtual crates earned in-game that contain various prizes like cosmetic items, stickers or equipment. They are usually awarded for levelling up in the game, participating in events, or completing achievements. However, players can also buy them using in-game currency or with real money. Some of the more prominent loot box games include:

• FIFA
• Team Fortress 2
• Star Wars Battlefront II

While they were initially only available in free-to-play games, since the 2010s, they have become a staple of paid online multiplayer titles like Overwatch. Aside from cosmetics, loot boxes sometimes have items like characters or weapons that can boost a player’s power. These items have led many people to decry the system, as it creates a pay-to-win dynamic in which players can buy their way to victory. Additionally, the items you get are random, so many people closely associate loot boxes with gambling. They’re also one of the reasons for the close connection between skin gambling and sports, as rare skins are harder to obtain and become more valuable.

Gachas

Some games, primarily mobile ones and those played in many Asian markets, use a model called gacha. Similar to real-life capsule machines, players use in-game currency to roll for a chance at getting a character, skins or equipment. Unlike skin betting, they’re guaranteed a prize every time. Gacha games have been gaining global popularity with titles like:

• Fate/Grand Order
• Genshin Impact
• Wuthering Waves
• Umamusume: Pretty Derby

Currency can be obtained by playing, through events or by buying it with real money. Sometimes players also get special tickets on select banners. Players roll on banners to get specific items, which usually have an increased chance of appearing for a limited time. There are even pity systems that further boost the chances of getting certain in-game items. Most gachas are free-to-play and rely purely on funds from this model.

Skins Betting

While skins are usually used to customise characters by making them wear silly hats or cool costumes, some players have started using them as tokens for gambling. Some players were frustrated that their Steam funds couldn’t be cashed out for real money, so they started betting on eSports events using these skins. Some of the games people gamble on include:

• CS:GO
• Dota 2
• League of Legends

The value of a skin depends on its rarity, and once a player has placed their bet, the skin is removed from their inventory. They can only get it back if they win. Since skin betting sites use Steam’s interface for gambling, Valve worked to shut them down, and lawsuits were filed against the sites. However, skin gambling and sports remain closely linked.

Addiction and Monetisation Concerns

While getting a cool new outfit for their character can be exciting, many people are concerned about the risk of addiction associated with skin betting and loot boxes. Prizes are random, and some players can spend a ton of money trying to get a particular skin. Since these games target children and teens, they can influence them to develop an addiction from an early age. The CEO of GambleAware, Zoë Osmond, believes this could also
impact them later in life:

Exposure to this gambling-like content from a young age can lead to an increased risk of experiencing gambling harm later in life.
– Zoë Osmond, CEO of GambleAware

Organisations like GamCare have even published tips to help prevent addiction to loot boxes. However, addiction isn’t the only concern, as regular players feel loot boxes and skin betting are ruining game design.

Games like Star Wars Battlefront II were criticised for locking characters behind loot boxes and gambling. They require you to spend too much time playing or paying for them with real money, even after already spending money buying the base game. The link between skin gambling and sports also has a negative effect on eSports.

Other Types of Monetisation

While skin betting and loot boxes are well-known for being part of multiplayer titles, there are other ways to monetise games. Downloadable content, or DLC, is one of the most common forms, as it allows companies to add new levels, outfits, or stories to a game without having to make a separate expansion. Many games also come in bundles or with deluxe editions that can feature:

• Collectable figures for physical editions
• Art books and soundtracks
• Exclusive outfits

Many games also set up pre-orders, with players getting early access or other items for buying the game before its official release. The price and content of DLC can vary, with some games even offering free DLC, such as weapon skins. However, DLC has also sometimes been the source of controversy, with companies asking exorbitant prices for skins. The high value of skins sometimes further increases the link between skin gambling and sports.

The Future of In-Game Monetisation

Many games still operate as live-service models, constantly updating with new features. While skin betting and loot boxes have become controversial, there are other ways to monetise them. Battle passes are a new form of monetisation that lets players use a free tier or buy an upgrade to unlock premium rewards. As they level up, they earn better prizes. Popular battle pass titles include:

• Call of Duty
• Rocket League
• Fortnite

Battle passes seem to be the currently preferred method of monetisation. However, some also have in-game stores where players can buy skins with in-game currencies. There are even games that integrate their skin stores with other websites like Discord. As developers once again focus on single-player games, future monetisation methods will likely shift alongside them, moving away from skin and sports betting.