Sections

Loot boxes expected to drive games market to $160 billion by 2022

Juniper Research also predicts Switch-driven console revival, with revenues to reach $33.2 in four years

While publishers continue to experiment with the role loot boxes play in monetising both free-to-play and premium games, one research firm believes they will be a major factor in the industry's growth.

Juniper Research expects the digital games market to be work $160 billion by 2022, thanks largely to the "increasing prevalence of loot boxes". By comparison, the firm reports the market is currently worth $117 billion.

It's latest report, Future Games Market: Market Sizing & Forecasts 2018-2022, claims that the use of loot boxes will be a significant factor in determining developers' success over the next four years.

Like so many over the past six months, Juniper Research also likened the mechanic to gambling.

"Loot boxes play upon the gamers' desire to have the most prestigious and sought-after in-game items, whether these be weapons or cosmetic goods," research author Lauren Foye observes.

"By monetising the random generation of items, developers are effectively encouraging a form of in-game gambling, extending both the lifecycle and engagement of games titles to their audience."

The use of loot boxes in high-profile AAA games such as Star Wars Battlefront II, Middle-Earth Shadow of War and Destiny 2 prompted outcry in the run-up to Christmas 2017, eventually attracting the attention of multiple governments and other authorities around the world.

Last month, both the Netherlands and Belgium have declared the monetisation model is in violation of gambling laws and are pushing for regulation. Our own Rob Fahey urges the industry to begin self-regulating before more authorities weigh in on the matter.

The backlash has driven several games firms to distance themselves from loot boxes or even remove them from their game entirely - including Electronic Arts, arguably the publisher at the centre of the turmoil, and most recently Robocraft developer FreeJam.

Nonetheless, Juniper Research maintains that loot boxes will continue to play a role in driving revenues for the global games market, in part thanks to their popularity in China.

The company also believes the console market stands to see its fortunes increase, with revenues expected to reach $33.2 billion by 2022 - a significant increase on the $25.3 billion recorded in 2017.

Juniper attributed this forecasted growth to the ongoing success of Nintendo Switch, as well as expected boosts in sales from the as-yet-unannounced next generation of consoles, which it predicts will be made available from 2020 onwards.

Related stories

Loot boxes, skins gambling to hit $50 billion by 2022 - Report

Juniper Research "strongly recommends regulation for skin trading and gambling" in report covering growth of practices

By Brendan Sinclair

30 million VR headsets by 2020 - Juniper

Research firm says 2016 will be "a watershed year" for the tech, with games and video driving initial growth

By Brendan Sinclair

Latest comments

Sign in to contribute

Need an account? Register now.