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Loot Boxes Hurting EA’s Company Value? Maybe Not

Last Updated on September 21, 2019 by Michael Brockbank

Over the past few days, Electronic Arts has experienced a backlash of empirical proportions. This is thanks to the loot boxes fiasco which is being debated as gambling. As a result, EA’s company value continues to drop and stock prices are the lowest they’ve been since April. But is “lootgate” to blame?

EA’s Company Value Symptom of Larger Problems

If you look back over the past three months, you can see how EA has been struggling as a business. It has been consistently dropping before loot boxes were targeted by angry players. This newest addition just made matters worse.

In reality, Electronic Arts may be suffering from more than just Jedi envy. The longer this problem continues, the more difficult a time EA will have trying to pull out of it.
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The Company You Love to Hate

Electronic Arts has an exceptionally long history in the gaming world. In fact, I remember seeing it’s logo splashed across the Commodore 64 back in the 80s. The company was responsible for some of my favorite titles back in the day.

Today, it’s but a shadow of its former self as greed and inadequate practices lead many to downright despise the company as a whole. Which is sad, really. It had a lot of potential 30 years ago.

Jesus, I’m old.

If you go to any EA-related video on YouTube, even before “lootgate,” EA has been hated by many. The company has a history of taking over the smaller guys and then butchering or canning projects gamers are anticipating.

Add in the fact that most games published by EA nowadays feel rushed and focus more on shareholders and not gamers, it’s no wonder why the company is feeling the burn today.

The Negative Implications from Pay-to-Win

A pay-to-win platform is where you throw money at a game developer so you can acquire items that give you a decisive advantage. This is one of the premises under the loot box issue going on right now. Well, that and the need to grind the hell out of a game so you can be Luke Skywalker or Darth Vader.

Unfortunately, this is also the business model behind a myriad of other games I personally stopped playing. Take Wolf Team, for example. An otherwise enjoyable title, it was exceptionally difficult to play against people who had the money to buy firepower and armor which made them impossible to play against.

Did we buy into Wolf Team to get the same unfair advantage? Negative. In fact, my teenage boys and I stopped playing the game altogether and moved on to something more balanced…like League of Legends. Another game that was successful without loot boxes.

The idea behind pay-to-win is good on paper, but it drives away those who simply want to enjoy a good title. This is especially true if you drop down $60 for a game. Although Wolf Team was free to play, I still abandoned it because of the P2W platform.

It should never be the goal of a game developer to frustrate an audience. You should want people to play the game because it’s fun. Getting your ass handed to you because the opponent has an unfair advantage is not a good time.

From the Battlefront II Trailer

Gambling to the Digital Level

The other part of the “lootgate” scandal is the gambling aspect to loot boxes. People are forking over cash in the hopes to “win” something that can benefit them in-game. Because many people want the latest and greatest ass-kicking elements, they’ll keep tossing in the money until they get it all.

In essence, any loot box that has an unknown item in it can fall into the category of gambling. In fact, one of the definitions of “Gambling” is to: “take risky action in the hope of a desired result.”

Sounds similar to me.

Personally, I don’t have a problem with loot boxes that only alter cosmetics of a game. It’s when players get items that drastically change their skill levels that make it an issue.

One of my favorite things about EverQuest 2 is the ability to outright buy cosmetic items without the risk of not knowing what you’re getting. I’ll go into that a bit more later.

Consistent Decline of Stock

Back in December of 2015, The Street claimed EA to be a stock worth buying. This was amidst the issues EA had when releasing Star Wars Battlefront in 2015. Shortly after it’s release, companies like GameStop and Amazon drop the purchase price of the game by $20.

This was mostly due to the fact of how the gaming community raged against the Star Wars title even without loot boxes. It was laggy, EA had server issues and it just overall seemed to be a rushed title. As a result, those who looked forward to the game were greatly disappointed.

Fast forward to 2017 and issues arise as a sequel. Although the drop this time around is far more severe than it was back in 2015, it’s par for the course.

I’ll make a prediction though…I bet the stocks climb back up after the beginning of the year just like it did last time.

This is because people will still buy EA games no matter how much they hate the company. Even I am having a hard time resisting the urge to buy Battlefront II only because I really want to play it. However, I am not going to feed the beast with my $60.

Is Government Regulation the Answer?

I know a lot of people are anti-government. However, sometimes a ruling body who has certain controls and privileges keep consumers safe.

Can you imagine what a grocery store would look like without the FDA? Hell, we could have seven-year olds picking up a nice smooth pack of Camels before tossing down a fifth of Jack.

Sometimes government intervention is a good thing. On the other hand, it also gives politicians more power when it comes to producing game titles and content. I highly doubt a representative from Utah would support Mortal Kombat.

Just Sit Back and Wait

In the meantime, all we can do as consumers is sit back and watch as the story unfolds. The best way to make EA adhere to the wishes of the consumer is to hurt ’em where it counts – the stock market. Stop supporting the company and you force change. But it’ll take more than a handful of us for this change to happen.

Michael Brockbank
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Michael Brockbank

Michael developed ColoradoPlays to help various charities through his favorite pastime. Since then, the blog and Twitch channels have donated several hundred dollars to Extra Life, Geeks of Grandeur and Operation Supply Drop to name a few.