League is dropping lootboxes (VentureBeat)
- Rocket League, a highly successful live-service video game (PC/console) debuted in 2015 is still very popular, ranking in the top 10 most played games on gaming distribution platform Steam.
- Its developer, Psyonix, was recently acquired by Epic Games and is now dropping the lootbox-style crate system it used to generate revenues from its player base.
- Psyonix has already shifted the main focus of its monetisation strategy over to premium progression passes (so-called Battle Passes), which have been very lucrative for Epic Games.
Analysis and Comments
- Lootboxes and micro transactions have long been popular monetisation techniques in mobile games, but it is only more recently that the big-budget games from AAA studios have been introducing them as well.
- The main reason we are highlighting this story is because it showcases the subsequent shift away from monetisation techniques based on randomized item rewards (in premium games), as they have received a lot of attention and criticism in the near past – and come with a looming regularity overhang.
- Battle Passes, on the other hand, are a tried and proven method to generate revenue from a game’s player base (and importantly not hated by gamers, unlike the “surprise mechanics” of lootboxes).
- There are many successful examples of companies using this technique (including Epic Games & Riot), with perhaps one of the best ones being Valve’s annual Battle Pass sale for the esports World Championship of its game Dota 2: the game’s prize pool is almost entirely crowdfunded via the Battle Passes, and while only 25% of the in-game sales actually go towards the prize pool, the total prize pool currently amounts to more than US$32m, with 18 days left until the crowdfunding ends.
- Notably, the Battle Pass-funded prize pool has consistently broken its own record every year, with this year’s officially being the largest single-event prize pool in esports history.
Tencent’s Share price (majority shareholder of EPIC Games)
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