Wedbush Securities Analyst Michael Pachter has told the Video Game Bar Association in Los Angeles that loot boxes exist because “consumers are stupid” and willing to spend money on rare or hard-to-get items.
In a transcript published by GamesBeat, Pachter made these remarks while discussing the next steps video game publishers might take in light of recent controversies and proposed legislation.
“There are three alternative outcomes for what’s going on with proposed regulation and legislation,” he said. “Either the publishers comply and get rid of loot boxes, which I think is a low-probability outcome, or they fight, which I think is a high-probability outcome, or they withdraw from those countries and let the consumer bitch and moan, which I think is the most likely outcome.”
Pachter believes the China’s handling of loot boxes, which reveals the odds of getting each item, is a reasonable solution and the right way forward.
“This thing has a 1-in-250 chance in the loot box, or you can buy it for $250,” he said as an example. “Then people realize, I have to buy 250 loot boxes for $600 to get it? Then they’ll just buy it.”
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