Random Thoughts – Randocity!

The FTC is investigating pay-to-win loot boxes

Posted in advice, video game design, video gaming by commorancy on December 4, 2018

img_3728.jpgThe FTC is investigating video game loot box issue that was so prominent in Star Wars Battlefront II and in many other games. Is it a form of gambling? Let’s explore.

Pay to Win?

The issue with loot boxes is that people feel ripped off by them, particularly after having already spent $60 for a big named video game title. If you spend $60 to buy a game, the implicit nature of that already hefty price tag is that it covers everything needed to play and win the base game without any additional payments. Any additional downloadable content (DLC) that appears later has a separate price tag. We understand this aspect of DLC. You can buy DLC if you want, but it’s not necessary to pay for DLC to win the base game. DLC is a tried-and-true model and it works to extend the gaming experience, but is not necessary to win the base game. Not everyone likes DLC, but as long as the DLC is created as separate world components, it’s fine.

When loot boxes were introduced, you might end up spending another $60 in addition to the already spent $60 to for the random chance to gain rare weapons or armor or level-ups that are not available in any other way and which are required to progress in the game.

The argument by game developers is that these pay add-ons are not strictly necessary. It depends on how you interpret that statement. It may not be strictly necessary to play the game, but it may make the game experience less enjoyable and possibly even problematic. If you plop down for the loot in the loot boxes, then your experience becomes much easier and better. Loot boxes turn games into a pay-to-win model.

Pay-to-win games to me are not fun. There’s no challenge in plopping down $5 here and $5 there just to get past a level or a boss or whatever it is holding you back. The challenge is and should be in the base game, not in buying add-ons needed to win. If the add-ons become the game, then the base $60 you paid is seen as a rip-off.

Smart Phone Games

Pay-to-win games have been available on the smart phone market for years and that’s fine. These games are typically free to download and free to play to a point. You only run into pay-walls when you want to progress beyond certain points or to buy more lives. Again, most phone game apps are designed around a pay-to-win model. However, there’s no challenge in paying to win a game. Paying to win only depends on how much money you are willing to spend. It’s just a money making scheme.

In the free download app model, you’re not paying an initial $60 to download the game. You’re paying nothing. This means there’s no base expectations set. So then each micro-transaction does help cover the developer costs of producing that free game. In the AAA $60 game arena, you’ve already paid for the development costs and you expect a fully functioning game in return for that $60. That’s the expectation of paying $60.

For example, adding loot boxes to Star Wars Battlefront II was simply a money grab by EA and nothing more. Everyone expected this loot to drop as a result of completing levels. No one expected that you’d have to pay to buy level up cards in addition to the already spent $60… cards that you might not see for many, many hours of play if they ever drop at all. Cards that are needed to unlock key pieces of the game.

Rethinking this Model

Fundamentally, game producers need to think long and hard about the pay-to-win model. Personally, I don’t like it and I will never be a fan of pay-to-win. You pay for the game itself, not for the ability to win it.  You should win the game or not on your own skill as a game player. For a $60 price tag, the game should drop all necessary loot or, if absolutely necessary, offer some kind of in-game credit system that you can spend towards the loot crates as you progress. Many games do give in-game credit that are awarded at level’s end that can be used towards ‘buying’ loot. You can also spend real money to buy those same credits in a store. This gives you two ways to ‘buy’ loot in the world. You can play the game and win credit or you can pay for it. The difficulty is when the game only drops the tiniest amount of credit within the game and then expects you to make up the difference with real money. Again, pay-to-win and I am so not a fan of this.

If you’ve already paid $60 to buy the game at the store, then don’t throw down real money loot boxes in front of the gamer and expect people to open their wallets and be happy about it. Real cash microtransaction loot boxes, again, turn the game into a pay-to-win model.

The argument here is that loot box costs offset the already expensive price tag of video game production. I counter argue that if a game now costs $80 or $100 or $120 per copy to develop, then simply raise the price of the game in the store accordingly and leave out the unnecessary loot boxes. No one says that a developer must sell a game at $60. They can price it at whatever they need to recoup their costs. If they can’t recoup their costs of a game at a $60 price tag, then perhaps they shouldn’t be in the video game business. Or, perhaps they should have kept to a lower budget production. However,  they are also free to raise the price of their game of they want to build bigger, flashier and more expensive games.

Other Alternative Systems

Let’s take a page from the toys-to-life games area. If developers want to offer a level-up swag system for the game, then do it through physical trading cards you can buy at Target or Walmart. Then, use a code on the card to load the card into an app linked to the game. This then gives you legitimate reasons to go buy the cards at the store. It also means anyone can go buy these cards to enhance their game experience… and you’re getting actual collectible trading cards for your money.

It also means the retailer can put the cards on sale and offer discounts on them. Digital cards coming from loot boxes purchased in-game are a waste that can only be used once and have no value after the game ends. It’s just money lost in addition to whatever you paid for in the game itself. Physical trading cards hold their value long after a game becomes a fond memory running on a Raspberry Pi emulator years later. It also means you can trade or sell these cards to others who might value them and at least recoup some of the money spent towards the game. Some of the cards might even become extremely valuable. A video game copy will never have that value.

Having cards produced into 5 or 8 card blind packets means the consumer gets to discover what cards they got and they can trade them with their friends if they get duplicates. It’s a real world way of adding value to the game and a shareable component, but at the same time offers a real world tangible component. Having these cards should also not be necessary to win the game, but they can be used to gain access to weapons, armor and character stats that might otherwise take a lot of grinding to obtain. All physical cards sold in blind packs should be discoverable in the game itself. But, they may contain exclusives that aren’t necessary, but add fun value to the game.

I’m a much bigger fan of using add-ons like real world trading cards than using in-game digital loot boxes… as long as these items are not needed to win the game. Pay-to-win needs to stop in general and these pay-to-win systems definitely have no place in a game sold at $60.

Are Loot Boxes a form of Gambling?

Here’s where some people feel that there’s a problem with loot boxes within video games. If you pay real USD to purchase a loot box, then you’re paying for the ‘chance to win’ something rare. In fact, when you pay for a loot box at all, it can be seen as a form of gambling strictly because of the ‘chance to win’ aspect. If the loot boxes drop on their own for free, there’s still a chance to ‘win’ something rare, but you’ve paid nothing for it and this would not fall under gambling. Gambling is when you pay money for a chance to win.

The paying of real USD to ‘win’ in-game loot is THE bone of contention and is the part in all of this that is seen as a form of gambling. Paying money to win anything is technically a form of gambling. It could also be considered a form of a lottery, much like a scratch card. Because lotteries are considered illegal unless operated by official state organizations, placing an illegal lottery into a video game could result in legal problems for video game producers. As a result, many people view for-pay in-game loot boxes as a form of gambling and in need of regulation under US gambling laws. Because gambling, at least in the US, is only allowed by persons 21 years of age or older, placing pay-to-win ideas into a video game designed to target minors and underage persons could be a problem for the video game industry. It also means the game should, at the bare minimum, put an M rating on any game that includes this mechanism.

These games could also be considered a form of early conditioning designed to teach children about gambling early and get them addicted to its risk-reward system. Because many video game companies also hold stakes in gambling operations, such as producing gambling machines for Las Vegas or actually own stakes in casinos, loot boxes could become very problematic for video game companies.

On the other hand, gambling usually entails winning money, not prizes. In Vegas, you pay to win money. At Dave and Busters, you pay to win prizes. So far, playing games to win tickets at an arcade has not fallen under gambling laws. However, you’re winning tickets, not prizes. The only random chance involved is how many tickets you win. In an arcade, simply playing the game is guaranteed to give you at least one ticket, usually more. The tickets are then redeemed for prizes of your choice. It’s not exactly a random chance kind of thing like a loot box. In addition, arcades use the payment given towards playing a game of skill which then gives you tickets. Giving tickets after playing a skill game that you can redeem is not exactly like paying for a loot box in a game with random chance to win its contents. Loot boxes are much more like a slot machine or lottery scratch card than they are like Dave and Busters skill-game ticket model.

I’m hoping that the FTC will find that any payment of real money towards ‘winning’ in-game loot is ruled as a form of gambling. This would mean that instead of paying for blind random chance boxes, that video game producers would have to set up a store and sell you exact items needed in the game. No ‘random chance to win’ involved. Either that or they must continue to drop the loot boxes in-game at no cost. Better, don’t drop loot boxes at all. Just create a store and sell us the the things we need… that, or use the suggested trading card system sold separately outside of the game.

If the FTC rules that the loot box is considered an illegal form of lottery, this mechanism could no longer be added to video games. I’d be fine with that outcome too.

↩︎

Advertisements

Is DealDash a Scam?

Posted in scam, scams by commorancy on October 1, 2018

I’ve always been fond of online auctions, until I found DealDash several years ago. I’ve also seen a number of people who have complained about DealDash and how it operates. Let’s explore if it’s a scam.

Auctions and Bidding

In a traditional auction, you’re actually buying from a seller who has put an item up for consignment to the auction house. This is how eBay works it. The seller uses the eBay platform to pay for their auction. If the item sells, eBay gets a cut of the profit. This is a typical auction from a typical auction house.

Bidders pay nothing to bid at eBay. You simply join the platform and off you go on your merry bidding way. You will pay for any auctions you win or any Buy-It-Nows you buy, but if you bid and don’t win, you pay nothing. This is important when understanding the difference between a site like eBay and DealDash.

At eBay, auctions have a finite end. If the auction closes at 6PM today, then it’s over at 6PM. Whomever was the highest bidder at 6PM is the winner of that auction.

DealDash Auctions

With DealDash, the auctions here work a bit differently. Instead of joining and bidding for free, you must pay for your bids. The bid cost can range between 12¢ and 60¢ per bid. In order to get started on DealDash, you’ll be required to pay for some initial bids. Sometimes DealDash offers bid sales for as low as 12¢ per bid.

As for the auctions themselves, they work quite a bit differently from eBay. Unlike eBay’s fixed close time, DealDash has no fixed auction close. Their auctions infinitely run and continue to extend until the 10 second countdown timer runs out without any further bids. As long as even one bid happens within that 10 second countdown, the auction extends with another 10 second countdown timer. Basically, an auction can run infinitely or until no one else places a bid. Bids also increment the item cost at 1¢ per bid. You spend 12-60 cents to raise the bid on an item by 1¢. Admittedly, that means the item cost goes up very slowly, but it also means that the bidding can go on for days with enough bidders.

Bid Extensions

You’re probably wondering about how people can manage to bid within 10 seconds. To answer your question, they don’t. Bidders use a feature that DealDash offers known as Bid Buddy. See below for more details. Suffice it to say that DealDash’s automated system continues punching in those bids in an automated way so users don’t have to. You’ll also notice that many of those bids are made right at the last moment of second 9. There’s no way a human could time a bid that precisely.

However, there has been some speculation that some of the bidding is rigged by DealDash. That speculation alleges that DealDash itself has its own set of automated bidders driving up auction prices and bringing attention to those auctions. I can’t tell one way or another if this is true. I’ll leave that speculation alone because of Bid Buddy and how it works.

Buy-It-Now

Both eBay and DealDash offer a Buy-It-Now option. However, these work entirely differently between DealDash and eBay. The eBay Buy-It-Now feature can be standalone or attached to an auction. If it’s standalone, you can only buy that product through Buy-It-Now. If it’s attached to an auction, you can only use Buy-It-Now before the auction begins. Once an auction has a first bid, the Buy-It-Now option disappears for that item.

With DealDash, if you bid on an auction, you are eligible to Buy-It-Now when the auction finally closes. You’ll buy the item at whatever price that DealDash offers, which they claim is usually at a substantial discount. In addition to buying the item, you’ll also get all of your bids back for free. This means you can reuse those bids again on future auctions. It’s not a bad deal if you really want that item. However, if you decline the Buy-It-Now purchase, you lose all of your bids. There’s a big incentive to bid on items where you are likely to buy it when the auction closes no matter the price.

Bid Buddy

DealDash offers an automated bidding service called Bid Buddy. It continues to bid on your behalf even when you’re not around to do so. eBay also has a similar feature, but it’s tied to the actual bidding process and doesn’t have a name. If you put in your maximum bid on an eBay auction, eBay will continue to bid on your behalf at the current bid increment until your maximum bid is reached. After that, you’d be responsible for upping your maximum bid or bidding manually.

Bid Buddy works in a similar way. It continues to bid on your behalf until you’ve run out of bids or reached the maximum number of bids set on that auction. The reason to use Bid Buddy is clear. Those who are using Bid Buddy get priority over those who are manually bidding. It is in your best interest to set up and use Bid Buddy rather than manually bidding. Otherwise, your manual bid will always be last in line.

So far, So good

So far, there’s nothing here extraordinarily bad about how DealDash works. Other than the infinitely open auction which I don’t personally like, it’s pretty straightforward in how it all works.

Products and Quality

Here’s where this site falls down hard. Do you go to DealDash to buy merchandise for a great deal or to spend time gambling to win? If it’s the former reason, then you might run into problems considering all of the below. If it’s for the latter reason, you might want to seek gambling help.

DealDash claims to offer overstocked products at “discount” prices. The difficulty with this business model is that DealDash is in this business to make money off of bidding with the side effect of an eventual sale of a product. They are not a retailer, not a discounter and definitely not in any way a reputable store. They are an auction house and that’s how they run it.

As a buyer, you’ll notice there’s nothing mentioned about a Return Policy or what to do if you receive damaged or unacceptable goods. Indeed, there’s nothing on any of DealDash’s auction listings that even mention the quality or authenticity of the merchandise that you will receive if you buy or win the bid.

The products purport to be genuine, but are they? Also, unlike eBay where there’s a seller behind each and every product, with DealDash, DealDash is the seller. This means that if you have a question about the sale of a product, you have to go to DealDash to get it answered. Worse, buyers have tried doing this with no response from DealDash.

If you’re actually wanting the product you’re bidding on, you might want to consider that what you’ll receive may entirely differ from the listing. In other words, the trust level with DealDash’s merchandise is very, very low. If you really want that merchandise, you can probably find it cheaper from a more reliable seller on eBay or Amazon without the bidding fees. On eBay, both the sellers and the products themselves have a reputation score. You can see what buyers are saying about both the product in the listing and of the seller’s reputation. You’ll notice that on DealDash, there is no reputation information about the seller nor reviews from buyers about the product or what they received. DealDash is a black box.

Being the black box that it is, unfortunately, DealDash is about as scammy as it can get from a site like this. If you can’t readily see what other buyers have received from a listing, then how do you know that you’ll receive anything of value? You don’t.

Additionally, because DealDash is not a traditional store, returning any merchandise may be next to impossible, particularly when you can’t get in touch with anyone at DealDash. If the item you receive is damaged, misrepresented or outright garbage, you’re stuck with it. Otherwise, you’ll have to dispute the credit card charge. The only other thing you can do is complain about DealDash… and many people have done exactly that on RipOff Report. However, other than venting your frustrations to the world or forcing a chargeback, you may not be able to get your money back.

Jumpers and No Jumper Auctions

Here’s where DealDash also gets just a little bit more scammy with their auction site piece. A jumper is a person who jumps in at the last minute and begins bidding on an auction when they think the auction time is about to run out. Unfortunately, jumpers on DealDash effectively mean nothing. A “No Jumper Auction” is simply a way to allow early bidders not to be outbid by someone who wants to jump in at the last minute. With DealDash, there is no such thing as a ‘last minute’. On eBay, there is a ‘last minute’ because auctions have a hard close time. On DealDash, the auction is infinitely extended so long as even one person continues bidding.

A “No Jumper Auction” sets a minimum bid point that after that no new bidders are allowed to enter the auction. If the no jumper point is set to $5, that means new bidders attempting to bid after $5 will be unable to do so. Only bidders who placed at least one bid below $5 will be able to continue bidding on that auction.

This then excludes users from auctions after the no jumper bid price has been met. On eBay, this is called ‘sniping’ or ‘snipers’. A sniper is a little different from a jumper in that because the auction close time is finite, snipers join in during the last 30 second countdown to try and outbid the current high bidder. With DealDash, a “No Jumper” feature is entirely pointless and just gives DealDash a way to manipulate auctions and who can bid. This feature only serves to force people into auctions early or wait for another one to start. This feature is simply a way to lower competition and allow early birds to win the auction more quickly without extra folks jumping in and keeping the auction open much longer. That seems to go against the idea of DealDash making more money. It’s kind of a weird feature for DealDash to add a limit auctions and prevent even more bidding, losing DealDash even more money in this process.

The scammy part of this is that apparently these “No Jumper” auctions don’t work properly, or DealDash is able to manipulate the “No Jumper” price randomly against would-be bidders. Some bidders have claimed to join in on standard “No Jumper” auctions with the default threshold set to $5. Yet, the auction price never reached $5 and they were unable to bid with DealDash claiming they were a jumper. Fishy. It seems this feature is being manipulated by DealDash in a way that prevents certain bidders (new or not) from bidding on that “No Jumper” auction.

Is DealDash worth it?

DealDash is ultimately an addictive form of legalized gambling, but it actually feels much like playing slot machines in Vegas. Mostly you lose, rarely you win and you spend a lot of money doing it…. which is how DealDash likes it. It’s what keeps them in business. If you’re willing to Buy-It-Now, you can buy back some of your bids at the cost of the product stated in the listing. But, don’t expect the price of the Buy-It-Now merchandise to be any less expensive than what you’ll find in a retail store, according to many who’d done this.

Some complainants who’ve used the Buy-It-Now option have been quite disappointed in the process. One user claimed that instead of getting their bids back as was promised, the “total value” of the bids was deducted from the price of the Buy-It-Now item. However, the “total value” of the bids applied to the reduction in the item’s cost were substantially lower than what the user paid for the actual bids. They might deduct at 12¢ per bid when the user paid 60¢ for the bids. Assuming you can actually get your bids back instead of this deduction thing, that’ll buy you a little more time to bid on new items and addict you further to this form of legalized gambling. This getting-bids-back idea is a little like losing $500 at BlackJack and then winning back $100. You’ve still lost $400. It’s simply a way to make you feel a little better about having lost $400.

If you get a high off of gambling, DealDash may be worth it… particularly if you don’t care about whatever it is you might win.

If you do happen to win the bid on item, then you’ll lose all of your bids plus whatever the winning cost of the item. If you happen to win a bundle of bids, then you’ll lose your bids only to gain some back. If you win the bid on a pair of earrings, you’ve lost however many bids it took to win that bid plus the cost of those earrings.

Consider if you don’t do Buy-It-Now often and you continually keep losing bids, you need to keep track of how much money you’ve spent there. You need to keep track because all of your lost bid money adds up when you finally do win a bid. For example, if you’ve spent $500 buying and losing bids for a while, then win a $50 coffeemaker, technically you’ve spent $550 for that coffeemaker. That’s not such a great deal. You could have bought 11 coffeemakers for the amount of money you spent to win that bid at DealDash. You simply can’t ignore all of the money you’ve spent on bids as non-existent. Those bid costs add into the cost of any items you bid and win. This means you can’t claim you got a toaster for $5. It was $5 plus the cost of however many bids it took you to get there.

Scam or Not?

The idea behind the site is fine, the execution of it is poor. If DealDash had partnered with legitimate sellers to back each of the auction products and if DealDash had allowed buyers to review the product listings for quality and authenticity and if DealDash offered a buyer’s protection plan and an actual Return Policy like a legitimate store, I might be more inclined to say it’s not a scam.

As it is, because DealDash doesn’t act like a legitimate store and also doesn’t offer feedback from buyers nor is there a buyer and seller relationship to ask questions, I cannot recommend the use of this site for any purpose… not for buying products and definitely not to get your gambling fix.

There’s too much of a chance to lose far too much bid money and very slim chances you’ll actually win a bid. Of course, you’ll be given the option to Buy-It-Now and get your bids back on auctions where you lost the bids, but that’s of little consolation if the merchandise you receive is trash, assuming you receive anything at all. Between the bids you pay for and the Buy-It-Now, this is how DealDash makes money. The rest is all an addictive game.

Testimonials

Don’t be fooled by people holding up a piece of merchandise that they claim to have received from winning an auction. There’s no guarantee those are legitimate photos. You have no idea if the merchandise you will receive is legitimate, counterfeit, refurbished, used, hot or in any other condition.

Even if the “winner” photos are legitimate, what you don’t know is how much those people have spent in bids to DealDash to “win” the privilege to buy the item at that price. They could have been bidding for years and have already spent a ton on bids before they finally won an iPad. In fact, they could very well have spent more than simply going to the Apple store and paying full price for one.

It’s just like being in a Casino. When you hear the bells ring and see the lights flash on a machine because someone has hit the jackpot, you really don’t know if that’s a win or if someone is simply making back a little money towards what they’ve already lost.

Recommendation

Site Recommendation: 👎 Avoid!
Reasons:

  • Highly Addictive
  • Form of gambling
  • Not a store
  • No Return Policy listed
  • No Product Reviews
  • No User Reviews
  • No Seller Reviews
  • Auction items don’t describe authenticity or condition
  • Pay to bid
  • Pay to win (separate from item cost)
  • Costly
  • Difficult to Communicate with DealDash
  • Mostly a scam to separate you from your money
  • Doesn’t operate like a legitimate store
  • May be less costly to shop elsewhere
  • Questionable business practices

As always, if you find Randocity a fascinating read, please leave a comment below and please click the Follow button in the upper right under the Search bar to be notified of any new Randocity articles.

↩︎

%d bloggers like this: