Loot box

A Loot box is a form of an in-app purchase that revolves around players paying to get randomized items of various quality, ranging from simple customization options for player's avatar or character to game-changing equipment such as weapons and armor.

The basic idea of loot boxes could be first seen in MapleStory in 2004 as "gachapon" mechanics and were later popularized worldwide by FIFA 09 's Ultimate team mode with packs of random player cards to collect. Loot boxes have become a prominent feature in free-to-play mobile games since 2013, and have since grown in prominence due to the success of popular freemium games such as Clash of Clans and Candy Crush Saga, now being present in retail games for home consoles and computers.

The generic term of "loot boxes" was named after the eponymous example of the mechanics found in Overwatch, while the term "gacha" was named after the Japanese toy capsule machines which the concept of loot boxes is based on.

How They Work
Loot boxes contain a randomized selection of items that can be used for either cosmetic or gameplay purposes. Depending on the game, players can earn more loot boxes by simply playing, buying them via in-game credits, or by purchasing them using real money. Loot boxes often include "rare" items that have lower chances of being obtained while the lower "rarity" items appear often enough that the player will frequently get duplicates.

Examples

 * 1) Overwatch - The game that coined the term "loot boxes". Skins, emotes, sprays, and other cosmetic items can be obtained by opening "loot boxes" gained by leveling up, getting one every 3 wins in Arcade (up to a maximum of 9 wins/3 crates per week), or by purchasing them with real life money. Overwatch is assumed to be the game that started the loot box craze, but not the first game to use them.
 * 2) Counter-Strike: Global Offensive - When playing, you will sometimes obtain a container containing weapon skins. Similar to Team Fortress 2, you need to buy a key (or get one from another player) to open them. The main difference of CS:GO loot boxes is that weapon skins could be sold for real money, which effectively turned it into a virtual gambling platform.
 * 3) Plants vs. Zombies: Garden Warfare and Plants vs. Zombies: Garden Warfare 2 - Using "PvZ coins" earned by playing the game or purchased with real money, sticker packs can be purchased to get sticker cards which unlock character accessories, character variants, and upgrades (in the first game only), and also increase the stock of consumable items to summon assistant characters, pots/turrets, and consumable items for retries in the horde mode called "Garden Ops" or "Graveyard Ops". To unlock character variants, a complete set of five stickers must be obtained. The items in the sticker packs are randomly selected.
 * 4) Halo 5: Guardians - "Requisition Packs" give you cosmetics and in-game bonuses.
 * 5) Call of Duty series - Starting with Call of Duty: Advanced Warfare, loot boxes were seen in the form of "Supply Drops", in which you unlock weapons, skins for the armor, weapons, exo-suits, taunts, and callsigns inside the box. These drops are obtained at the end of a match at random, ranging from common to epic in rarity. Players can get rare or epic drops if they were lucky enough to get it at the end of the match unless you pay a large sum of money for these Supply Drops. Modern Warfare Remastered added Supply Drops for a 9-year-old game in a later update.
 * 6) Destiny 2 - "Engrams" contain a variety of cosmetic items, and they are acquired after every 5 "level ups".
 * 7) *The items themselves can also be purchased with "Bright Dust" that is gained from various bounties, although the selection of purchasable items randomly changes every week and some, like the Exotic emotes, can cost a lot of Dust.
 * 8) *An update added the ability to directly purchase most seasonal items as opposed to wagering on engrams.
 * 9) Forza Motorsport 7 - "Prize Crates" contain gear for your driver, race mods (changing things such as difficulty levels, which was not locked to "prize crates" in older games of the series), and exclusive cars. Fortunately, they were removed in November 2018.
 * 10) The Forza Horizon games handled this slightly different with wheel spins being awarded with experience, perks, or being purchased with in-game currency, never actually paid. Most content can be won or bought, with the only items costing actual money are some of the added vehicles post release.
 * 11) Dungeons and Dragons: Neverwinter - There are tons of loot boxes with each expansion and are often found frequently from defeated enemies or bought for 200 Astral Diamonds. To open these loot boxes, it's required to buy Enchanted Keys using Zen, a currency bought with real money (though you can also obtain them via Astral Diamonds Exchange) and is often associated with Perfect World Games. Another form of loot box is the Strongbox of the Dragonflights, which often contain an item needed for some powerful gear plus vouchers for items needed to upgrade strongholds.
 * 12) Clash Royale - In the form of chests. Most of them are easy to find (Golden, Silver, Free) but some like Legendary, Super Magical, and Epic take a lot of time to get, or a lot of gems to buy (the Epic Chest costs 10000 gold in the shop in higher arenas, however). The Super Magical Chest costs a fortune (over 4000 gems) and it doesn't always give rare cards. In the Electrifying Update, 3 new chests were added and they are cheaper than the previous ones (Lightning Chest, Fortune Chest, and Legendary King's Chest, costing 250, 750, and 2500 gems respectively.) Supercell created a game mode called Gem Rush which gives you 250 gems if you complete it, so you can get a legendary chest after 2 gem rushes.
 * 13) Star Wars Battlefront II by Electronic Arts - Star Cards, Crafting Materials, and additional credits are earned via loot boxes. Crafting Materials can be used to create and increase the effects of Star Cards. The Star Cards affect aspects of characters used in multiplayer gameplay when equipped, enhancing their stats and abilities. This decision was seen as "Pay to Win" by gamers and was received negatively in general. In fact, on November 16, 2017, gambling authority has started an investigation on the loot box system found in this game and Overwatch.
 * 14) Team Fortress 2 - During drops, there is a chance that you might get a crate or a cosmetic case that contains an item from the list in its description. The problem is you need to obtain a key ($2.49 USD each, or get one from another player via Trading) to even open them. And if you don't have any money, they might clog up your backpack if you don't have a Premium account. The game is known for being one of the first western games to use a loot box system. However, you are able to sell these crates or delete them.
 * 15) Need for Speed Payback - There are two types of loot boxes known as "Shipments". Base Shipments contain vanity items and basic currencies. They can be bought with Speed Points (a premium currency that can only be bought with real money) but can also be obtained via leveling up. Premium Shipments yields the contents of a base one plus 2 random Speed Cards, they're only obtainable with real money.
 * 16) Dragon Ball Z Fighterz has loot boxes too, but they are free of charge with zero paywalls.
 * 17) Fortnite - The Save The World mode's loot boxes (AKA Llamas) are used to give you better heroes, defenders for your F.O.R.T Base, weapons, V-Bucks etc.
 * 18) The primary method to obtain new cars in CSR Racing 2 is by opening loot boxes. Even back in the game's beta, several high-end cars such as the Mercedes-Benz SLS AMG Black Series, the Lamborghini Aventador LP750-4 SV and the Bugatti Veyron Super Sport require loot boxes to obtain. After the game's release, pretty much every car introduced in updates are first only obtainable as a milestone prize, but after said crew championship featuring the car ends, the car is only obtainable via loot boxes 2 weeks later. Some other cars introduced in updates like the Honda Civic Type R (FK8), Porsche Cayman GT4 (981), Nissan Silvia Spec-R (S15) Rocket Bunny and 2016 Audi R8 V10 plus Coupé (Type 4S) are only obtainable through loot boxes and the best way to get them is wait for 10X drop rate silver crate before prestige cup featuring said car.
 * 19) *Its Gameloft competitior, Asphalt Street Storm Racing, has loot boxes as well, but they are free every several hours (depending on which type of loot box). You can also spend gems to buy them, to get one random blueprint of a car. Cars such as BMW M2 Coupe (F87), Nissan SKYLINE GT-R (R34) are only available in loot boxes. Thus making the game pay to win.
 * 20) Skullgirls (on mobile) doesn't have loot boxes, but instead, they have Relics, which do the same thing, by giving the player Fighters, Moves, or Canopy Coins. The downside is that you also have to buy them using Theonite, which is another type of currency other than Canopy Coins.
 * 21) Phantasy Star Online 2 uses scratch cards, which works a lot like loot boxes in that the results are often random with a selection of three choices. Worse yet, because certain events are random, one can spend at least 3000 yen ($30 roughly) to get at least one part of an outfit they want. Fortunately, most of these are cosmetics and can be bought with meseta, the in-game money, through other players' shops if one doesn't mind grinding for it. Not only that, but the stuff needed to progress for each character can usually be obtained through in-game farming.
 * 22) Dragon City has card packs that used to be free but now they use real money and gems for the game. This cost up to 59.99 for a better pack of this.
 * 23) Pokémon Masters EX - Sync pairs that are not normally available through story mode can be obtained through Sync Pair Scout from the shop which cost gems (that can be obtained by completing adventure missions for the first time, completing goals, using real money, etc.).
 * 24) Need for Speed: World - This game has card packs, most of which can only be bought with SpeedBoost, a premium currency that can only be obtained with real life currencies. Thankfully, when Soapbox Race World was released a few years after the real game's closure, it was gone. All card packs can be bought with in-game credits.
 * 25) WWE 2K20: Because 2K Games got really desperate with microtransactions and loot boxes again, except this time, they got even more desperate. They managed to implement loot boxes in a WWE wrestling game. Ever since they acquired the WWE license, there have been no Loot boxes in any WWE games they have made so far even when they got greedy with NBA 2K18, making this game the first WWE game to have them.
 * 26) EA Sports: Ultimate Team: The main thing that started the concept of Loot Boxes, opening packs that give a chance at random cards, like having to keep buying Points if you want a higher chance at a 99 OVR card of like Khalil Mack, Aaron Donald or Bobby Wagner.
 * 27) Rocket League: It used to have loot boxes in the form of Crates that contained exclusive Bodies, Decals, Goal Explosions, Rocket Boosts, Trails, and Wheels. Since 2019, the crates were discontinued and instead replaced with Blueprints.
 * 28) Diabalo Immortal: One YouTube user estimates that it would cost $110,000 in order to fully upgrade a character with five-star items.

Why They're Not Surprise Mechanics

 * 1) Unlike regular microtransactions where the player decides what they're spending money on, the contents of the loot boxes are completely randomized, meaning whether you'll get the item you want is entirely dependent on luck. If a person buys a loot box and doesn't get something useful they can be tempted to buy another one and try again. This is extremely dangerous and can cause addiction because some people, especially children, lack a sense of self-control and could potentially waste excessive amounts of money in attempts. This can cause severe financial problems for the families if not caught in time.
 * 2) *One woman in particular spent over $31,000 on lootboxes.
 * 3) *Loot boxes can exploit this by making valuable items rare, meaning players will most likely fail to obtain those items and encourage them to spend more money in more attempts which will likely also fail. To makes this worse, the RNG that determines what items the player will get are often rigged against the player.
 * 4) While other products that give randomized items do exist such as trading card game packs or lucky toy packs, those products give a physical tangible object with real value that the owner can do whatever they want with. Loot boxes on the other hand do nothing but unlock already existing data within the game at random, those do not have any real value and the player cannot do anything with the items found in loot boxes.
 * 5) You're spending money on a luck-based system to potentially get a reward without any guarantee of said reward being what you want. That's borderline gambling.
 * 6) Recent studies show that even if loot boxes technically aren't gambling by the legal definition, they still abuse people's compulsive and addictive tendencies to keep buying more and more, just like regular gambling.
 * 7) *It is known from internal communications that companies know this and that loot boxes and similar systems are specifically targeted at those (commonly known as "whales") who while small in numbers, often spend the equivalent to dozens or even hundreds of copies of the game in microtransactions out of addiction.
 * 8) Although regular microtransactions in free-to-play titles are known to be more acceptable since the games need other ways to make a profit, randomized loot boxes are more questionable since regular microtransactions already made money off them.
 * 9) *Full price AAA games now also implement loot boxes which is even more insulting than regular microtransactions. We already paid money for the game, so why do we need to spend more money?
 * 10) *Publishers who push for loot boxes in full price games often use the "games are too expensive to develop" excuse to justify them, however it's been proven that those expensive games already make big profits with or without microtransactions.
 * 11) Loot boxes can be set up in such a way that it is mandatory for the player to spend as much money as possible to have an advantage over those who choose to play the game normally; one major example being Star Wars Battlefront II.
 * 12) Games that implement loot boxes tend to punish gamers who don't buy them by forcing them to do massive hours of tedious grinding to get those items (i.e. Middle Earth: Shadow of War 's fourth act).
 * 13) *Developers/publishers often include some kind of "time-saver packs" under the claim that they are offering players "choice" or "a chance to save time." However, it is only an illusion of choice, and the inclusion of "time-saver packs" effectively reduces the overall value of the game as a whole and systems are rigged to make loot boxes take longer to obtain without spending money.
 * 14) *It has been definitively proven that games with loot boxes indeed are rigged against players that don't spend money on them, as when those games are forced by law to disable buying loot boxes they immediately become completely unbalanced or outright broken.
 * 15) Some games have loot boxes be the only way to access features that came with the game (or past entries in a series, possibly for free) in the first place, such as the Prize Crates in Forza Motorsport 7.
 * 16) Loot boxes have made more and more publishers push for multi-player only games and Games as a service business models, since single player games are much harder to put pay-to-win loot boxes into. This has resulted in more cash grab multiplayer games flooding the market and less story driven single player games.
 * 17) *That hasn't stopped some developers from trying to put pay-to-win loot boxes in single player games though, such as Middle Earth: Shadow of War'.
 * 18) *This has gone to the point that some publishers are now advertising single player as a selling point for their games. 
 * 19) This excessive monetization may run afoul of the Eighth Amendment's ban on excessive fines.
 * 20) Because loot boxes are often purchasable with real currency, ESRB/PEGI guidelines stipulate that games containing them constitute as gambling, and should carry an Adults Only or 18 rating; however, because the major console owners, being Sony, Nintendo, and Microsoft, don't allow games with the former on their respective platforms, the ESA can negate this by simply saying that loot boxes "aren't gambling".

Reception and Impact
Loot boxes have been looked upon unfavorably for cutting out essential game features and causing them to devolve into matches in which whoever pays more money has an advantage over those who don't. Loot boxes are even more hated than microtransactions because regular microtransactions let you decide what you get. Loot boxes often give you items you don't want.

It should be noted that much like microtransactions, loot boxes can be relatively harmless if done right, mainly if the items you receive are purely cosmetic, entirely optional, and can be obtained via normal gameplay at a reasonable pace. For example, Rocket League, which gives you free items and loot boxes after a match and only the keys require you to pay, so you can open them. For Overwatch as stated above, loot boxes are cosmetic only, and are given out to players by leveling up, winning 9 matches a week, given one for free when a event starts (5 on Christmas day) and by giving players ratings. However, some people, such as Jim Sterling, dislike loot boxes even if the only items obtainable are cosmetic items if they actually consider those as part of the gameplay mechanics of the game. Jim Sterling himself considers all cases of loot boxes equally as bad as microtransactions.

Following the success of a mobile RPG gacha game Puzzle & Dragons in 2011, Japan - the country where loot boxes system originated from - has issued a guidelines to ban a "complete gacha" system, which revolves around player have to collect all common rarity items in a specified pool to exchange for rarer items.

In December 2016, China's Ministry of Culture announced legislation which required all online game publishers to display the "draw probability of all virtual items and services", another changes in the legistation requiring the publishers to limit the numbers of loot boxes any player can purchase in a day, and also requiring the publishers to give more favorable chance for player to get more valueable items with the number of loot boxes they have purchased, essentially mandated every Chinese publishers to implementing a "guaranteed gacha" system. In November 2019, China has enforced a new regulation to prohibit the sales of loot boxes to any users under eight years of age and limit a maximum monthy spending limit of players under 18 years old

In November 16, 2017, Belgium’s gambling authority has started an investigation on the loot box system found in the 2017 Star Wars Battlefront 2 game and Overwatch.

In 2018 Belgium and The Netherlands would be later become the leaders of battle against loot boxes in the west by regulating them, the former declares them a violation of Belgian gambling laws, while the latter forbids loot boxes that allow items to be cashed out for real money.

The UK government has done some strong investigation work looking into loot boxes and gambling, and while they acknowledge that UK laws haven't caught up with technology in the gaming sphere, the DCMS committee has called for loot box regulation, recommending that they are either banned outright, or at the very least forced to carry higher age restrictions and demand that game companies that promote loot boxes be required to obtain gambling licenses or face severe penalties.

On November 16, 2017, gambling authority has started an investigation on the loot box system found in the 2017 Star Wars Battlefront 2 game and Overwatch.

As of December 22, 2017, Apple now requires game publishers and developers to reveal the chances of obtaining items from loot boxes.

Hawaii representative Chris Lee is currently working on laws that either ban loot boxes or restrict them by forcing publishers to put direct warnings similar to that of cigarettes or alcohol. In 2018, ESA representatives were invited to a conference about Loot Box regulations. The ESA representatives failed to answer Chris' questions properly.

Thankfully, the negative stigma that loot boxes now carry and the ongoing pressure from governments has scared publishers who wanted to milk loot boxes for all their worth and now they're putting less loot boxes in their upcoming games, many games would remove loot boxes from their games, but unfortunately yet unsurprisingly, Electronic Arts is the only one that will still add loot boxes in their games (FIFA games at least).

In fact, it's gotten so severe that the U.S Senate has created a bill to ban loot boxes and pay to win microtransactions In the U.S, which by the way, has gained bipartisan support.

To this day however, the ESA and its lobbyists continue to fight against government intervention by making all kinds of flimsy excuses and justifications to deny the connection between loot boxes and gambling, even going as far as to "disagree" with the UK parliament's research and findings, while they themselves have shown little to no evidence that disproof the latter's findings. The industry's response to loot box concerns have been poor otherwise by doing the bare minimum to self-regulate, such as introducing the useless "In-Game Purchases" label which, as stated countless times, doesn't address any of the backlash since the label could also encompass upfront DLC and expansions, like The Witcher 3's two major expansions. The ESA's only response to regulation has been to simply deny gambling connections, or to disagree with findings. It is also worth noting that the "We disagree with these findings" response has been used multiple times by every company that wants to have loot boxes whenever damning evidence against loot boxes is presented since loot box investigations began late 2017.

Even the actual gambling industry has acknowledged that loot boxes in video games have less regulation than literal gambling in Casinos do.

Unfortunately, it was reported that Governments failed to regulate and legislate Loot Boxes, after EA confirmed they will be sticking with Loot Boxes for FIFA 23's Ultimate Team mode, after it was effectively given the green light by the UK Government not to legislate the controversial in-game monetisation system, sparking mass outrage from many gamers and parents of children.

Read More

 * The Blurred Lines Between Loot Boxes and Gambling by FANDOM
 * The Psychology of Loot Boxes and Microtransactions by Platinum Paragon

Videos that focus on criticizing loot boxes
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