A Loot Box opening in Overwatch.

‘Overwatch’ Crosses $1 Billion, Or Why Loot Boxes Aren’t Going Away

Overwatch is undoubtedly one of the most popular new game titles to be introduced in the last couple of years. The PlayStation 4, Xbox One, and PC hero shooter continues to sell like gang busters, crossing over $1 billion in revenue for Activision Blizzard and demonstrating why loot boxes are sticking around for a while.

Activision-Blizzard reported record first quarter 2017 net revenues of $1.73 billion, up from $1.46 billion in the first quarter of 2016. This included a 50 percent increase in revenue from digital channels and a 30 percent year-over-year increase of in-game purchases, which leads directly to the publisher touting Overwatch.

“Among the drivers of our results was Overwatch, which now has over 30 million players globally. The Overwatch League is gaining momentum and we’re excited to offer our community of players the best professional league experience,” Activision Blizzard CEO Bobby Kotick stated in the earnings results press release.

That 30 million players represents not only gamers who have purchased the game over the past year, but have also spent money on in-game loot boxes for character skins, voice packs, and other customization options. This has led to total revenue for Overwatch to cross $1 billion, the eighth franchise to do so per Activision.

“Overwatch continues to be Blizzard’s fastest growing new franchise, reaching over 30 million players globally less than a year after launch. Overwatch is now the 8th billion-dollar franchise in Activision Blizzard’s portfolio.

“Blizzard had record first-quarter time spent, up a double-digit percentage year-over-year. In late January, Overwatch had its fourth seasonal event, Year of the Rooster, to celebrate the lunar new year. The event drove engagement records for the game. Blizzard launched a fifth seasonal event in April, Uprising, including a player-versus-environment game mode which drew record time spent.”

D.Va doing the selfie highlight in Overwatch.
[Image by Blizzard Entertainment]

The success of Overwatch demonstrates a marked shift in how game publishers and developers handle the issue of continuing to make money after a game releases. The traditional formula has been to release DLC packs containing maps, possibly characters, and/or weapons.

This slowly started shifting to card packs and loot boxes to unlock content with games like Plants vs. Zombies: Garden Warfare and Halo 5: Guardians. Now, it has taken off like never before with Overwatch.

Even full-priced games with DLC or expansion packs have gotten into the loot box action. Both Call of Duty and Destiny offer the slot-machine-like options for players to spend in-game or real world money on.

Still, the success of loot boxes in games like Overwatch, Halo 5, and even Gears of War 4 is noticeable. It allows the developers to create and offer new maps, characters, and modes without splitting the player base or making consumers feel like they are forced to purchase add-on content to keep playing. That is, as long as the items offered in the loot boxes remain cosmetic.

Reaper takes aim in Overwatch.
[Image by Blizzard Entertainment]

Halo 5 suffered a bit from the card packs being sold that unlocked vehicles and weapons in the Warzone mode. Fortunately, the game kept those separate from the more competitive Arena modes. Meanwhile, Gears of War 4 packs offers plenty of cosmetics, but also ability bonuses in the popular Horde mode. Call of Duty has also raised the ire of some gamers by offering weapons in loot boxes.

Overwatch remains one of the few games that sticks to purely cosmetic items, which makes its success even more eyebrow raising.

China recently introduced regulations requiring games offered in the country to share the chance of winning items in loot boxes, as reported by PCGamesN. League of Legends was one of the first games to start reporting their odds. It will be interesting to see those odds for other titles and if other countries decide to follow China’s lead.

[Featured Image by Blizzard Entertainment]

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