In video games, a loot box (also called a loot crate or prize crate) is a virtual item that players can use to get a random choice of other virtual items, such as decorations for a character or powerful equipment like weapons and armor. Loot boxes are usually a way for game companies to earn money. Players may buy them directly or earn them during gameplay and later purchase keys to open them. These systems are sometimes called "gacha," a term from Japan that refers to games based on capsule toys, and are often found in gacha-style games.
Loot boxes began as part of reward systems in large online role-playing games and in free-to-play mobile games. They first appeared between 2004 and 2007 and have since been used in many free-to-play games and some paid games. Developers use loot boxes to help earn money without relying on paid downloadable content or subscriptions. They also aim to keep players interested by offering new items and decorations through these rewards. Loot boxes are one example of chance-based systems in games, and studies have examined how they affect children, families, and the line between gaming and gambling.
Loot boxes became widely used in many games during the mid-2010s. By the late 2010s, some games, like Star Wars Battlefront II, expanded their use of loot boxes in ways that caused criticism. This included systems that gave players who spent real money an unfair advantage and changes to gameplay that hurt the overall experience. Concerns about loot boxes being linked to illegal gambling with game items led some countries to regulate them under gambling laws. Because of these legal issues, many game developers began using other ways to earn money, such as battle passes.
Design
A "loot box" can be called by different names, depending on the type of game it appears in. Terms like "loot box," "loot crate," or "lockbox" are often used in shooter games because they provide new outfits or gear that players can use. Digital card games may use the term "booster pack," which comes from collectible card games.
Loot boxes are usually given to players during gameplay, such as when they level up their character or complete a multiplayer game without quitting. They can also be received through promotions outside of gameplay, like watching specific streaming events. Players can buy loot boxes directly, most often using real money, but sometimes with in-game currency. In some cases, in-game currency must be purchased with real money to get loot boxes. Some loot boxes can be opened right away, while others require additional items called "keys" to unlock them.
Loot boxes are typically opened through an in-game menu that uses colorful visuals and sounds to make the experience more exciting. Some menus look like slot machines or roulette wheels and are designed to create a sense of anticipation. When players run out of loot boxes or keys, a button may appear that lets them buy more.
The items inside loot boxes are usually ranked by "rarity," with rarer items being harder to get. While the contents are randomly chosen, some loot boxes guarantee at least one item of a certain rarity. During the redemption process, some games show the rarity of an item with colors, which increases excitement. Some systems use a "pity-timer" mechanic, which gives players a better chance of getting a rare item if they haven’t received one recently. This mechanic may also apply if players buy multiple loot boxes at once, ensuring one of them contains a rare item.
A game’s developers or publishers store players’ inventory in server databases. This allows players to see other players’ inventories and trade items. Most items from loot boxes are visible to other players during gameplay, such as special outfits or voice lines.
Most loot-box systems give items without checking what the player already owns. Players can usually get rid of duplicate items by trading them with others or converting them into in-game currency. Some systems let players use this currency to buy specific items they don’t have.
Some loot-box systems, especially from Asian developers, use a method inspired by gashapon (capsule toy) vending machines. These systems, called "gacha," let players "spin" to get random items, characters, or virtual goods. One type of gacha, called "complete gacha," allows players to combine common items to create rarer ones. At first, it’s easy to collect common items, but as the number of missing items decreases, it becomes harder to complete a set. This is especially true if many common items are needed, as one specific item might be required. This practice was banned in Japan by a government agency in 2012, though gacha games overall are still allowed.
Some games offer seasonal or special event loot boxes that include items only available during specific times. In digital collectible card games, booster packs for certain expansions may only be available while the expansion is active. Once an expansion is retired, its cards can no longer be earned through packs but can still be obtained using in-game currency and used outside of standard play.
History
Loot boxes are a type of system used in video games to give players random rewards. These systems were first used in older games, especially in large online games called MMOs or MMORPGs. Loot boxes later became a way for free-to-play games, especially on mobile devices, to earn money. They also include the idea of randomness found in gachapon machines, which are vending machines that give out small toys.
The first known use of a loot-box system was in the Japanese version of the game MapleStory in June 2004. Players could buy tickets for ¥100 each. These tickets were used in-game to get random items from machines called "Gachapon," similar to how gachapon machines work in real life.
Another early example was the Chinese game ZT Online (or Zhengtu), released in 2007. This game used loot boxes to earn money because many players in Asia could not afford to buy full-price games. Instead, they played in Internet cafes or used pirated copies. ZT Online helped Zhengtu Network earn over US$15 million monthly within a year. This success led to more games using free-to-play models with microtransactions, such as Puzzle & Dragons, released in 2011, which earned over US$1 billion through its loot-box system.
In Western countries, around 2009, companies like Zynga made free games on social networks like Facebook, using microtransactions to help players progress. FIFA 09, released in March 2009 by Electronic Arts (EA), was one of the first games to use loot-box-like mechanics. Players could buy card packs with in-game currency or money. Another early example was Team Fortress 2, released in September 2010, where players could earn random "crates" to open with purchased keys. Valve, the company behind Team Fortress 2, said this helped attract more players and increase revenue.
The FIFA series later added a mode called "FIFA Ultimate Team," where players used virtual trading cards to build teams. This mode became free in 2010, and players could buy card packs to earn money for the game. EA used a similar system in Mass Effect 3 in 2012, offering "packs" with rare items to help fund the game’s multiplayer mode.
Other games later added loot boxes, such as Counter-Strike: Global Offensive in 2013 with "weapon cases," Battlefield 4 in 2013 with "battlepacks," and Call of Duty: Advanced Warfare in 2014 with "supply drops."
By 2016 and 2017, many popular games, including Call of Duty: WWII, Halo Wars 2, and Forza Motorsport 7, included loot boxes. However, by October 2017, critics and governments began discussing the fairness of these systems. The game Star Wars Battlefront II, released in November 2017, faced strong criticism for its loot-box system. Review sites like OpenCritic started tracking how much loot-box systems affected gameplay. In 2017, the use of loot boxes became one of the most talked-about trends in the video game industry.
Criticism
Loot boxes are part of a game design cycle that keeps players interested in a game. These cycles are linked to video game addiction and are often compared to gambling addiction. This is partly because loot boxes use a system called a "variable-ratio reinforcement schedule," similar to how slot machines give out prizes. While many players may not spend real money on loot boxes, some players, called "whales," may spend large amounts on virtual items. A study of 15 research projects found that spending on loot boxes and signs of problem gambling are somewhat connected. Gambling concerns are higher in games that include loot boxes, especially those played by children. Loot boxes also increase feelings of "fear of missing out" (FOMO), as some items from loot boxes are only available for a short time, encouraging players to spend money to get them. Features like "pity-timers," which make players think they will get a rare item if they open enough loot boxes, can also lead to the gambler's fallacy.
Video games are usually seen as games of skill, not chance, so they are not regulated under gambling laws. However, researchers in New Zealand and Australia wrote in a 2018 study that "loot boxes are psychologically similar to gambling." A 2021 study from England also said that "loot boxes are structurally and psychologically similar to gambling."
Supporters of loot boxes argue that they are like opening collectible toys, such as Hatchimals or booster packs from physical card games like Magic: The Gathering. In the United States, physical card games have faced legal challenges about being gambling, but were not found guilty. Some countries, like Belgium, exempt physical card games from gambling laws because they do not involve gambling. Opponents say that opening digital loot boxes is designed to create excitement and immediate rewards, which can affect players prone to gambling, a feature not present in physical card games.
Some say the popularity of loot boxes grew after FIFA games, as opening loot boxes became exciting for players and viewers on platforms like YouTube or live streams. NPD Group, which tracks game sales, found no change in consumer purchases for games with loot boxes by September 2017. NBA 2K18, criticized for its loot-box system, became the best-selling game in North America that month. Juniper Research estimated the global video game market, worth about $117 billion in 2017, would grow to $160 billion by 2022, partly due to loot boxes, especially in China. For these reasons, some game developers see loot boxes as a way to earn money, knowing some players will buy them even if most do not.
Games with random in-game rewards, including loot boxes, and the ability to trade items with others can lead to "skin gambling." In this practice, customization items called "skins" become a virtual currency traded for real money or used to gamble on esports. Legal authorities have labeled these activities as gambling, leading to legal challenges in 2016. Valve's game Counter-Strike: Global Offensive, updated in 2013, became a major example of skin gambling by 2016. Later games like Rocket League and PlayerUnknown's Battlegrounds limited trading or excluded it entirely, reducing skin gambling.
Academic studies have shown links between spending on loot boxes and problem gambling, especially among teenagers and young adults. These studies focus on reward systems, like unpredictable rewards and visual effects, similar to slot machines.
Other researchers say the psychology behind loot boxes can lead to risk-taking, especially when rewards are monetary and entry barriers are low. However, some caution that not all connections between loot boxes and gambling are direct causes. Studies suggest that people already prone to gambling may be more likely to spend on loot boxes, not because of the loot boxes themselves.
Critics say some loot boxes use "dark patterns," design tricks that manipulate players. These include limited-time offers, reward streaks, and unclear purchase costs. Some games use systems that make opening more loot boxes seem more valuable, even if the chances of getting good items stay the same. These tactics can exploit thinking errors, like fearing losses or overestimating the value of past spending, making it hard for players, especially younger ones, to spend wisely. Dark patterns are now central to debates about ethical game design.
In free games, some loot-box systems are criticized as "pay-to-win," meaning players must spend money to gain an advantage. These systems may be called "pay-to-loot" if they include items that directly affect gameplay, like rare cards in a digital card game. This can make a player's ability to compete depend on random loot-box outcomes, pushing players to buy more boxes to get rare items. Blizzard's Hearthstone, released in 2014, is often criticized for requiring spending on booster packs to succeed. Blizzard claims it reduces pay-to-win by allowing players to use only cards from a "core set" and recent expansions.
Some experts worry that for loot-box models to work, games must be designed to encourage spending, which can harm core game design and weaken gameplay. This may involve using loot boxes as a main feature, even if it affects the game's original mechanics.
Regulation and legislation
Loot boxes in video games use chance to give players items after they spend real money. This has led some to compare loot boxes to gambling. Gambling rules differ in different countries, but one common rule that often makes loot boxes different from gambling is that players cannot legally turn the items inside loot boxes back into real money within the game.
Loot boxes have been regulated in several Asian countries. In some Western countries, people are still discussing whether loot boxes should be considered gambling. Steven Wright from PC Gamer noted that similar issues about gambling were raised in the 1990s through lawsuits involving the baseball card industry and the Pokémon Trading Card Game. However, those cases did not significantly change those industries.
In December 2016, China's Ministry of Culture passed a law requiring online game companies to publicly share the odds of receiving virtual items from loot boxes starting in May 2017. When the law began, companies followed it, sharing statistics that showed the chances of getting different items, some as low as 0.1%. Other changes required companies to limit how many loot boxes a player could buy in a day and to give better odds for rare items after opening a certain number of boxes. A 2021 study found that 91 of the top 100 games on China's Apple App Store used loot boxes, but only about 5% fully shared the odds as required by law.
The law also banned selling "lottery tickets" like loot boxes directly. In June 2017, Blizzard Entertainment announced that loot boxes in its game Overwatch would no longer be sold in China. Instead, players would buy in-game currency and receive loot boxes as a gift.
In November 2019, China's General Administration of Press and Publication banned selling loot boxes to users under eight years old. It also limited how much older users under 18 could spend on loot boxes each month, between 200 to 400 renminbi.
After the success of the gacha system in Puzzle & Dragons in 2011, Japan recognized that the system was similar to gambling, especially for younger players. In May 2012, Japan's Consumer Affairs Agency banned "complete gacha," where items from loot boxes combined to form rarer items. This was done by reinterpreting existing 1977 laws about baseball trading cards. Within a month, major Japanese game companies removed complete gacha rules, though some found ways to avoid the ban. Japanese mobile game companies formed the Japan Social Game Association in 2015, which later merged with another group called CESA.
In March 2015, South Korea's National Assembly proposed changes to its games industry rules, requiring companies to share details about loot box items, including their odds of being received. Industry self-regulation efforts did not satisfy lawmakers, who continued pushing for legal rules. A lawmaker argued that self-regulation lacked proper penalties and failed to protect consumers. Later, self-regulation rules were updated to require games to clearly show loot box odds. Future plans include expanding these rules to other in-game purchases.
South Korea's Fair Trade Commission oversees consumer issues related to loot boxes. In April 2018, it fined Nexon $875,000 for deceptive loot-box practices in its game Sudden Attack, and smaller fines were given to other companies.
In February 2023, South Korea passed a new law requiring games with loot boxes to share item odds or face fines. Enforcement began in March 2024. This led to companies like Respawn Entertainment sharing loot box rates for Apex Legends, and EA disabling Ultimate Team packs in FC 26 for Korean users.
In October 2014, Singapore passed The Remote Gambling Act, banning unlicensed gambling websites and imposing fines for violations. The law defined gambling to include using virtual items bought with real money in games of chance, raising concerns that game developers might need licenses. In response, Singapore's home affairs minister clarified that the law did not cover social games where players cannot convert in-game money to real money or items outside the game. Platforms like Steam, which allow virtual currencies for other purchases, were also excluded.
The minister warned that the line between social games and gambling might become unclear over time, which is why the law was written broadly. In 2021, Singapore reviewed the law to make it more technology-neutral, possibly including loot boxes in future regulations.
In October 2021, Malaysia's Office of the Mufti for Federal Territories stated that loot boxes in PUBG: Battlegrounds qualify as gambling (maisir) under Islamic law because players pay real money for items that are not guaranteed.
In Australia, loot boxes would fall under gambling rules if they are played "for money or anything else of value." However, it is still unclear whether in-game items have enough value to be considered gambling.
Litigation
In February 2020, two class-action lawsuits were filed in France against Electronic Arts (EA) over the Ultimate Team feature in FIFA games. The lawsuits claim that this feature is similar to unregulated gambling. One person involved in the lawsuit said they spent more than €600 on Ultimate Team packs but never received a high-ranking position, which is needed to compete online with other players. The lawsuits also state that FIFA games do not have parental controls to limit spending. This, combined with the pay-to-win nature of Ultimate Team, is said to encourage underage gambling. The lawsuits reference decisions made in 2019 by courts in Belgium and the Netherlands.
In June 2020, a class-action lawsuit was filed in California against Apple. The lawsuit claims that Apple allows games on its App Store to use loot box mechanics, which encourage consumers, including children, to engage in gambling and addictive behavior. This is said to break laws designed to protect consumers and stop such practices. The lawsuit also states that Apple’s devices become unauthorized gambling devices, which are illegal under California law.
Another class-action lawsuit was filed in California in August 2020 against EA over the Ultimate Team loot boxes in FIFA and Madden NFL games. The plaintiff was represented by the same legal firm as the June 2020 case against Apple. This lawsuit asks a jury to decide whether Ultimate Team loot boxes are considered gambling mechanisms under California law. It also seeks $5 million in damages. A separate lawsuit filed in November 2020 against EA claimed that the Dynamic Difficulty Adjustment feature in FIFA, Madden NFL, and NHL games changes how players play to reduce their chances of getting items through in-game rewards. This, the lawsuit said, pushes players to buy items through microtransactions. This case was dropped in March 2021 after EA shared technical details and allowed the plaintiff to consult with its engineers. They concluded that Dynamic Difficulty Adjustment was not used in Ultimate Team modes.
In January 2022, a class-action lawsuit was filed in Illinois against Take Two Interactive for using loot box mechanics in the NBA 2K series. The lawsuit, filed by a parent on behalf of their child, states that the games make it harder for players to understand the real-world financial cost of loot box purchases. This is said to be a deceptive practice.
Impact
In late 2017, increased criticism and rules led many game developers and publishers to remove loot boxes from their games. These games include Star Wars Battlefront II, Dauntless, Middle-Earth: Shadow of War, Forza Motorsport 7, and Rocket League. Other games changed their ways of earning money to avoid the unpredictable parts of loot boxes, such as using challenge-based battle passes from Fortnite Battle Royale.
Some games kept loot boxes but changed how they could be bought or how they worked to reduce randomness and gambling-like features. In March 2019, Heroes of the Storm stopped letting players buy loot boxes with real money. Loot boxes with random items are still available as free rewards, but after the March update, players could also buy cosmetic items directly with real money. In January 2019, Epic Games changed how loot boxes in Fortnite: Save the World worked when bought with real money, letting players see the contents before purchasing. In 2022, Epic removed the ability to buy loot boxes and starter packs with real money. In June 2021, EA added a similar change to FIFA 21, called Ultimate Team Preview Packs, which let players see the contents of these packs before buying them.