Loot boxes are set to have a phenomenal few years, with revenue predicted to hit $US20 billion ($26 billion) by 2025 according to a new report from Juniper Research. The majority of this revenue is expected to come from the Far East and China, with North America and West Europe also considered future heavy spenders in the area.
Over 230 million gamers (5 per cent of players) are expected to spend money on loot boxes, with the majority of these players gaming on mobile devices.
It’s been a long road to success for loot boxes over the last decade, with frequent backlash forcing changes to games like Star Wars: Battlefront 2 and Shadow of War. Despite calls for more intense regulation and the links drawn between problem gambling and purchasing loot boxes, the mechanic has thrived over the last few years.
#VideoGame #LootBoxes to generate over $20bn in revenue by 2025.— Juniper Research (@juniperresearch) March 9, 2021
However, growth, averaging 5% per year, will be slower than previous years, as consumers become fatigued with loot boxes and legislative constraints limiting the market.
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In mainstream gaming Overwatch has led this charge, but newer mobile games like Genshin Impact and Nintendo titles Animal Crossing: Pocket Camp and Mario Kart Tour have also helped normalise loot boxes.
While the report noted revenue for loot boxes was just $US15 million ($19 million) in 2020, the average growth projection was set at 5 per cent year-on-year. Juniper Research stated projected growth would slow over time as consumer fatigue set in and new legislation passed but regardless, it predicted exponential growth in the sector.
“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,” Juniper’s Nick Hunt predicted.
Loot boxes have already found their way into every part of the games industry, including full-priced AAA titles. For some developers, they’re an unfortunate reality in an industry that’s become increasingly unsustainable. It’s likely we’ll continue to see them integrated into more titles as games become more ambitious and expensive to produce.