Blizzard Entertainment 2020

Abstract

Technology is evolving and have influenced or changed many industry practices. The video game industry is one of the industries that rely on technology and keep changing every couple of years because of it. The video game industry is facing a constant challenge with pricing their products due to the increasing cost of game development and publishing. These challenges kept coming up throughout the years since the origin of this industry in the 70s until the present day. One of these challenges is analyzing their consumers and measuring how much they are willing to spend on the product. Technological products can be altered to satisfy the consumer’s demand and that is what Blizzard Entertainment did with their consumers. By creating an online platform that hosts millions of players around the world (Battle.net), Blizzard was able to collect valuable data about their consumers and what value they can provide to them while increasing the company revenue. Blizzard’s solution was Overwatch, a 5 vs. 5 competitive shooter game that is once purchased the player will get all the games’ content. Blizzard’s focus was not only to make Overwatch a success but to also keep the player engaged and to spend more. Thus, the introduction of loot boxes. A loot box is a in-game mystery box that give the player five random items to be used in-game. These items could be character skins, emblems, in-game currency, and more. The loot box is the only item in the game that require a purchase to be obtained. With a simple box containing only cosmetic items to be used only in-game, Blizzard was able to generate millions of dollars. Why? What drove the consumers to keep buying a box filled with cosmetic items only? What value does the consumer see in the loot box?

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