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The Rise of Gacha and Loot Boxes

https://kotaku.com/loot-boxes-are-designed-to-exploit-us-1819457592

‘Fire Emblem Heroes’ Revenue Reaches $400 Million Worldwide

Over the past several years, the Google Play and App store have seen a rise in Gacha games. With the success of mobile games such as Puzzle and Dragons (PAD), released the US in 2012, the Gachapon-style game popular in Asia had been introduced to a whole new market, and has since become a huge hit. Since then, many companies have made the decision to localize their Gacha games for the US (and worldwide), flooding mobile game markets with gambling games that make millions, such as Nintendo’s more recent Fire Emblem Heroes (see second link). Another form of these is under the guise of “lootbox”, evidenced in popular video games such as League of Legends and Overwatch. Although they have shed the mantle of “Gacha”, they have similar models: spending money for a small chance at rare items or skins.

Why have these become so popularized? It all falls back to the concept of information cascade. With the huge success of PAD and initial Gacha games, many other companies developing for the mobile game market were faced with a decision: make a gacha game that has already been shown to be a success or try to create their own genre of games which may have varying degrees of success. Many companies will choose the latter. Each of these companies is an entity with personal, private information; they make the decision to develop a game under their brand or intellectual property; since they are already in the gaming industry or have connections to it, they see the success of the Gacha model through the release of other Gacha games; thus, they infer that the consumer market thoroughly enjoys the Gacha model, even though the company does not know for sure. Now the company decides that creating a Gacha game would be profitable over other models. This trend then carries over to other companies and Gacha games become ever more popularized in a cascading chain.

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