The company that gave us loot boxes has lost 77 percent of its value

Remember Pascal’s Wager, the Chinese game Apple used to demonstrate the power of its new iPhone this year? The company behind it might be in trouble.

Giant Network used to be a top competitor in China’s gaming industry, rivaling the likes of Tencent and NetEase. It was the first company to popularize loot boxes, effectively introducing in-game slot machines to the masses. The Shanghai-based company was even listed in New York at one point, before re-listing in Shenzhen in 2016. 

But over time, China’s gaming industry has become largely a two-horse race as Tencent and NetEase try to one-up each other. Giant Network, on the other hand, has lost 77 percent of its value, or 120 billion yuan (US$17.2 billion), since March 2017.

Giant’s struggle only came under scrutiny after the gaming juggernaut announced that it could no longer purchase the Israel-based gaming company Playtika, known for its casino-style mobile games. Giant led a consortium to buy the company in 2016 for 30.5 billion yuan (US$4.4 billion). The company later sought to buy the company alone for 42.5 billion yuan (US$6.1 billion). But the acquisition attempt raised concerns among regulators of both Giant’s financials and Playtika’s gambling-related games.