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When good monetization meets bad ethics

Riot Games' Leanne Loombe says the industry needs to be driven by more than revenue to avoid regulation

Ethics in gaming is likely to be a point of focus in the near future as fights over monetization practices and the idea of gaming addiction play out in the coming years.

The discussion on those topics continued at last month's DICE Summit in Las Vegas, where Leanne Loombe, head of Riot Games' Riot Labs, hosted a pair of roundtables on balancing ethical pricing and monetization design with business needs.

Afterward, Loombe spoke with on the topic, starting with just what "ethical pricing" actually is.

"It goes hand in hand with value, doesn't it?" Loombe asks. "You're providing some value to players, whether it's a game, technology, or whatever you're selling. But the pricing of that thing has to be of the perceived value from the players' perspective. The expectations have to be set. I'm not saying this is right in any way, but if there was a legendary card, champion, character, or piece of clothing you really wanted that was at a price point that doesn't work for one player but works for another, is that OK?

"I don't know the answer to that, but it's a very interesting conversation. There are some people in the world who have more money than others. Does that mean we should provide avenues for those people to spend that, or should we try to balance it across all players?"

So where does Loombe think monetization design crosses the line and becomes ethically questionable?

"When you forget what the player is wanting, what the value is you're actually providing to players," she replies. "If you're driven just by revenue and that's the only thing that's important to you, then you're going to forget what players are actually asking for when it comes to something valuable."

Monetization must be about more than maximizing revnue

Loombe likens it to the sort of conflict of interest people might see when dealing with car dealers.

"You go and buy a car and they're trying to get you to buy the car that makes them the most money, but that's not the car you want," Loombe says. "It becomes a question of ethics when the value isn't being perceived properly, or players don't feel like they're getting the right value out of the thing they're trying to purchase."

Loombe notes that the way the audience perceives the value proposition is also affected by their expectations heading into the experience.

"Set expectations with the player so they understand the value they're getting from the outset, and then there are less surprises"

"We've seen recently some premium products that you pay $60 for, and the expectation is you're paying $60 for the complete game so you can play it," she says. "That's players' expectation. Then when they purchase the game and see what's inside is some sort of loot box or monetization strategy that is locking progression or stopping them from accessing content they thought they paid the $60 for, that's when the backlash happens. That mismatch of expectations really causes players to question...

"Set expectations with the player so they understand the value they're getting from the outset, and then there are less surprises. Obviously, there are way more nuances inside of that, because you can have something that seems fair from the outside but might not be when you start experiencing it."

Another common issue she sees crop up is when developers let players spend money in order to speed up progress in the game. It can be a lucrative design choice, but Loombe stresses it needed to be weighed carefully against progress earned by way of skill and progress earned by persistence.

"If games focus way too much on forcing players to spend money because they just can't get there with hours or skill, that's when it becomes unethical," she says. "There should be a balance there. You should be able to pay for the content, be skilled enough to get it, or play enough hours to get it. And then there's a balance there. When one of those two [non-paying options] is missing, that's when it becomes a discussion point. That's why players are frustrated, because they can see that in the game design."

The concern over exploitative monetization is tied into concerns about gaming addiction. Considering many free-to-play games rely on a relatively small number of their players to pay large amounts of money and a relatively small number of players have problems gaming in excess to a self-destructive degree, how can developers be sure they aren't building their businesses by taking advantage of others' problems?

"That's a really hard one, because there's a scale as well of the different players you get," Loome says. "You get the players who are willing and have money, those who are willing but don't have money, and then you get the players that are not willing. Trying to balance that scale is really important.

"If you run a free-to-play game and you look at the data and see 5% of your population are creating 90% of the revenue... you don't know out of that 5% who can afford to spend that money. You don't know who they are personally, if they do have an addiction or whether it's actually harming them. So it's very hard from that perspective to even understand if we're affecting players in that way, apart from if players actually get vocal and start talking about that."

"Gambling is state by state, but I think it will only take one state to say, 'This is gambling,' for everyone else to get on board"

Loombe also suggests looking at the incentives games give their players for spending more, something that was discussed during her roundtables. It might not be great to give them special items when they hit spending milestones, but perhaps developers could let players gift something to other players once they hit those milestones, so it benefits the player community instead of just themselves.

While ethics and laws are by no means tied together, an industry perceived as behaving in unethical ways is considerably more likely to draw the attention of legislators. Gaming monetization schemes like loot boxes are under scrutiny by a number of regulators around the world, and Loombe believes it's not without reason.

"I definitely think there are some valid things going on there," she says. "Belgium has just put together a bunch of laws now regulating that, and I wonder if that's the start of things to come. Gambling is state by state, but I think it will only take one state to say, 'This is gambling,' for everyone else to get on board.

"I think some of it is valid, because there are games out there that really don't have great loot box designs. There are some that do, and some that are clearly exploiting players, so those are the ones we really need to look out for and fix. And unfortunately, as soon as one company does that, it brings everyone else into that discussion, even if other people are actually doing it ethically and doing it the right way."

So how can the games industry avoid having regulators and legislators crack down on its monetization methods?

"I think we can self-regulate in some way," Loombe says. "It will be hard, but we can create guidelines. We can do workshops on how to actually create good, ethical business models that can still generate revenue. Because there are companies out there doing it. And if those companies can share how they're doing it and everyone else can learn from those companies... We could have some sort of committee around the industry where people come together and share that information, and try and weed out those bad actors, or at least teach them, or share knowledge with them so they can do it in the right way."

Loombe acknowledges that self-regulation will be a difficult task because it requires coming to a consensus on what's ethical and what's not in an industry where the models and experiences change so much from genre to genre and individual to individual. And the only way to convince the rest of the world that this industry is conducting itself in an ethical manner is by tackling that challenge properly.

"It's all about action, isn't it? If spending money is a natural by-product of loving and being passionate about the game and having fun in the game, that's how we want our players to feel," Loombe says. "We want them to spend money because they really love the game, not because they feel forced into it in any way. The only way we can convince players is by getting it right consistently, because the minute there's a bad actor, that's when it brings everyone down."

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Brendan Sinclair

Managing Editor

Brendan joined in 2012. Based in Toronto, Ontario, he was previously senior news editor at GameSpot in the US.