Lootboxes to Become Increasingly Profitable Despite Regulations
According to analysts, lootbox revenue is expected to grow every year until it reaches $20 billion per year in 2025. However, this development will not continue indefinitely.
Juniper analytics group predicts a steady increase in revenue from lootboxes in the coming years. According to this company, in 2025 this form of game monetization will bring publishers $20 billion a year. In 2020, revenues from this title amounted to $15 billion and analysts predict that they will grow by about 5% each year. This is the conclusion of the report titled In-game Gambling & Loot Boxes: Legislation, Market Evolution & Forecasts 2021-2025.
According to Juniper, more than 230 million players will be buying lootboxes in 2025. Mobile users are expected to make up the vast majority of this group. However, analysts do not forecast a stable growth indefinitely. The report concludes that it's only a matter of time before the growth of this sector slows down, because sooner or later people will get bored with buying virtual boxes.
However, it is not only the changing preferences of players that will hurt the future of lootboxes. Analysts point out that this business model is perceived negatively and governments are increasingly attempting to limit it through new regulations. Recall that a few days ago we wrote about the adoption by the German Bundestag amendment to the law on the protection of minors. Experts predict that it will allow the authorities to limit lootboxes only to games that are classified as productions for adults.
However, analysts do not think that publishers will look at all these changes idly. They expect the way lootboxes work to be modified so that players don't become bored of them, and to avoid classifying this business model as gambling.
The tendency to "soften" lootbox mechanics should be welcomed, although many people would prefer if this way of earning money would go away altogether. Some developers are actually moving in this direction. Lootboxes were removed from Fortnite, Rocket League and Star Wars: Battlefront II, and each time such change met with a warm reception by players. At the same time, companies like 2K Games and Electronic Arts earn so much money on lootboxes in sports games that they will probably defend this way of monetizing games to the death.
