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 selection of other virtual items, such as customizations for a player's character or important game items like weapons and armor. Loot boxes are often used to earn money, either by buying them directly or by earning them during gameplay and later purchasing "keys" to open them. These systems are sometimes called "gacha," a term from Japan based on capsule toys, and are often found in gacha games.
Loot boxes began as part of reward systems in online role-playing games and later became common 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 games earn money without relying on paid downloadable content or subscriptions, and to keep players interested by offering new items and decorations. Loot boxes are one type of chance-based reward system in games, and studies have looked at how they affect children, families, and the line between gaming and gambling.
Loot boxes became widely used in 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. Concerns included "pay to win" systems that gave an advantage to players who spent real money on loot boxes, unfair changes to gameplay, and unfair practices in games that cost money to buy. Because of worries about loot boxes being linked to illegal gambling with game items, some countries started regulating them under gambling laws. Due to these legal issues, many game developers began using other ways to earn money, such as battle passes.
Design
A "loot box" may have 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 equipment. 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 for leveling up their character or completing a multiplayer game without leaving. They can also be received through promotions outside of gameplay, like watching streaming events. Players may also buy loot boxes directly using real money or in-game currency, which sometimes requires spending real money to obtain. Some loot boxes can be opened right away, while others need special items called "keys" to unlock them.
Loot boxes are typically opened through an in-game interface that uses bright visuals and sounds to make the experience exciting. Some interfaces resemble slot machines or roulette wheels, designed to create a sense of anticipation. When players run out of loot boxes or keys, a button may appear to let them buy more.
The items inside a loot box are usually ranked by "rarity," meaning the chance to get an item decreases as its rarity increases. While the items are randomly chosen, there may be guarantees, such as at least one item of a certain rarity. Some systems show colors that match an item's rarity before it is revealed, adding to the excitement. A "pity-timer" system may also be used, which increases the chance of getting a rare item if the player has not received one in recent loot boxes. This system might also apply if the player buys multiple loot boxes at once, ensuring one of them contains a rare item.
Player inventories are stored in databases managed by game developers or publishers. This allows players to view others' inventories and trade items. Most items from loot boxes are visible to all players during gameplay, such as seeing a character's appearance or hearing a voice line.
Most loot-box systems give items without considering what the player already has. Ways to get rid of duplicates usually include trading with others or converting them into in-game currency. Some systems let players use this currency to buy specific items they do not own.
Some systems, especially from Asian developers, use a method inspired by gashapon (capsule toy) machines. These are called "gacha" games, where players "spin" to get random items, characters, or other virtual goods. A type of gacha called "complete gacha" lets players combine common items to create rarer ones. However, as players get closer to completing a set, it becomes harder to find the missing items, especially if many are needed. This practice was banned in Japan by the Consumer Affairs Agency in 2012, though gacha games overall are still allowed.
Some games offer seasonal or special event loot boxes with 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 obtained from packs but may still be used outside standard play through in-game currency.
History
Loot boxes are similar to random reward systems used in older video games, often found in large online role-playing games (MMORPGs) or similar games. These systems were adapted to help free-to-play mobile games earn money. Loot boxes also include the chance-based element seen in gachapon toy machines, where players receive random prizes.
The first known use of a loot-box system was called "gachapon tickets," introduced in June 2004 in the Japanese version of the game MapleStory. Each ticket cost ¥100, and players could use them in-game to get random items from virtual machines called "Gachapon."
In 2007, the Chinese free-to-play game ZT Online (also called Zhengtu) became an early example of a game using loot boxes. Many Asian players could not afford to buy full versions of games, so they played for free in Internet cafes or through piracy. To earn money, ZT Online used loot boxes, which helped the game’s publisher, Zhengtu Network, earn over $15 million monthly within a year. This success led to more games adopting free-to-play models with microtransactions, such as Puzzle & Dragons (2011), which earned over $1 billion through its loot-box system.
In Western regions like North America and Europe, games like FIFA 09 (2009) and Team Fortress 2 (2010) introduced loot-box-like features. FIFA 09 let players open card packs using in-game currency or purchases. Team Fortress 2 allowed players to earn random "crates" that could be opened with purchased keys. These systems aimed to 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, with card packs sold as a revenue source. Similar systems were later used in games like Mass Effect 3 (2012), where players could buy packs to get rare items.
Other early games with loot boxes included Counter-Strike: Global Offensive (2013), Battlefield 4 (2013), and Call of Duty: Advanced Warfare (2014). These games used loot boxes to offer random items like weapon skins or character gear.
By 2016 and 2017, many popular games, such as Overwatch, Call of Duty: WWII, and Star Wars Battlefront II, included loot boxes. However, Star Wars Battlefront II faced criticism in 2017 for its loot-box system, leading to discussions about its legality. Review sites like OpenCritic began tracking how much loot-box systems affected gameplay. This topic became a major industry trend in 2017.
Criticism
Loot boxes are part of a game design cycle that encourages players to keep playing. These cycles can lead 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," which works similarly 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 papers found that spending on loot boxes and signs of problem gambling are somewhat connected. Gambling concerns are higher in games with loot boxes, especially those played by children. Loot boxes also increase feelings of social anxiety related to "fear of missing out" (FOMO), as some items from loot boxes may only be available for a short time. Players may spend money to get loot boxes to avoid missing these items. Systems like "pity-timers," which suggest players will eventually get a valuable item, can also lead to the gambler's fallacy, where players believe they are more likely to get a good item after opening many boxes.
Video games are usually considered games of skill, not chance, and are not regulated under most gambling laws. However, researchers in New Zealand and Australia wrote in 2018 that "loot boxes are psychologically similar to gambling." A 2021 study in England also concluded that "loot boxes are structurally and psychologically similar to gambling."
Supporters of loot boxes argue they are like opening collectible toys, such as Hatchimals, or physical card game booster packs, like those in Magic: The Gathering. These physical items have faced legal challenges but were not found to be gambling. In some countries, like Belgium, collectible card games are not considered gambling because they do not involve real money. Opponents of loot boxes say the experience of opening digital loot boxes is designed to be exciting and immediate, which can affect people who are prone to gambling. This is different from physical booster packs, which do not have this same effect.
Some say the popularity of loot boxes in games, such as FIFA, grew because opening loot boxes is exciting for players and viewers, like those watching on YouTube or live streams. NPD Group, which tracks video game sales, found no change in consumer purchases for games with loot boxes by September 2017. NBA 2K18, which faced criticism for its loot-box system, was the best-selling game in North America that month. Juniper Research predicted 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 key 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 these items with others, can lead to "skin gambling." In skin gambling, players trade customization items, called "skins," for real money or use them to gamble on esports or other games. These activities have been labeled gambling by legal authorities, and legal challenges occurred in 2016 to stop them. Valve's Counter-Strike: Global Offensive, which added random loot drops in 2013, became a major example of skin gambling by 2016. Other games, like Rocket League and PlayerUnknown's Battlegrounds, avoided skin gambling by limiting trading or removing the ability to trade items.
Academic studies have shown a connection between spending on loot boxes and problem gambling, especially among teenagers and young adults. These studies focus on systems like unpredictable rewards, audiovisual feedback, and designs similar to slot machines.
Other researchers say the psychology of playing with loot boxes can lead to risk-taking behavior, especially when rewards are monetary and the cost to play is low. However, some warn that not all links between spending and gambling are cause-and-effect. Some studies suggest people who are already prone to gambling are more likely to spend on loot boxes, not the other way around.
Critics say many loot boxes use "dark patterns," which are design techniques that trick players into spending money. These include limited-time offers, reward streaks, and unclear pricing. Some games use systems that make players think opening more loot boxes will lead to better rewards, even if the chances are the same. Researchers say these methods can exploit thinking errors like loss aversion and sunk-cost fallacy, making it hard for players, especially younger ones, to make smart spending choices. Because of this, dark patterns are a major topic in debates about fair game design.
In free-to-play games, some loot-box systems are criticized as "pay-to-win" models, where players might be called "pay-to-loot." These systems include items that directly affect gameplay, like booster packs for card games, with the value of the item depending on its rarity. This can make a player's ability to compete depend on random loot-box results, pushing players to buy more boxes to get high-value items. Hearthstone, a card game by Blizzard, requires spending on booster packs to be competitive, though Blizzard says it tries to reduce this by allowing players to use only cards from a limited set.
Some experts worry that for loot-box models to work, games must be designed to encourage players to buy loot boxes, which can change how games are made and weaken their core mechanics. This might involve using loot boxes as a main feature in the game.
Regulation and legislation
Games that use loot boxes may be considered a form of gambling because players use real money to get random items. While gambling laws differ in different countries, one key difference between loot boxes and gambling is that loot boxes cannot be turned back into real money through legal means in video games.
Loot box systems have been regulated in several Asian countries, and some Western countries are still deciding whether they are legal. In the 1990s, similar concerns about gambling were raised in lawsuits against the baseball card industry and the physical Pokémon Trading Card Game, but these cases did not lead to major changes in those industries.
In December 2016, China’s Ministry of Culture required online game publishers to publicly share the odds of receiving virtual items from loot boxes starting in May 2017. When the law was enforced, publishers released statistics showing the chances of players receiving different items, with some odds as low as 0.1%. Other rules required publishers to limit daily loot box purchases and ensure players received rare items after opening a set 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 5% fully disclosed the odds as required by law.
The law also banned the direct sale of loot boxes as "lottery tickets." In June 2017, Blizzard Entertainment removed loot boxes from its game Overwatch in China, instead offering in-game currency as a gift for purchases.
In November 2019, China’s General Administration of Press and Publication banned the sale of loot boxes to players under eight years old and limited spending by players aged 8 to 18 to 200–400 renminbi per month.
In Japan, the gacha system, popularized by Puzzle & Dragons in 2011, was recognized as gambling, especially for younger players. In 2012, Japan’s Consumer Affairs Agency banned "complete gacha," a practice where items from loot boxes combined to form rarer items. This was done by reinterpreting existing laws from 1977, not by creating new legislation. Major game publishers quickly removed complete gacha rules, though some found ways to work around them. Japanese companies later formed the Japan Social Game Association, which later merged with the Computer Entertainment Supplier’s Association (CESA) in 2015.
In March 2015, South Korea’s National Assembly proposed laws requiring game companies to disclose loot box item odds, including types, quantities, and probabilities. Self-regulation efforts by the games industry did not satisfy lawmakers, who argued that penalties were needed to protect consumer rights. Revisions to self-regulation now require clear display of loot box payout rates, with plans to expand rules to other in-game purchases.
South Korea’s Fair Trade Commission oversees consumer issues related to loot boxes. In 2018, it fined Nexon $875,000 for deceptive loot-box practices in Sudden Attack and imposed smaller fines on other companies.
In February 2023, South Korea passed a law requiring loot box odds to be published or face fines, with enforcement starting in March 2024. This led to changes like Apex Legends publishing loot box rates and FC 26 disabling Ultimate Team packs for Korean users.
In October 2014, Singapore passed the Remote Gambling Act, banning unlicensed gambling websites and fining violators. The law defined gambling as involving "virtual credits" or other items obtained through chance, raising concerns about loot boxes. In response, Singapore’s home affairs minister clarified that the law did not apply to social games where players could not convert in-game items to real money or merchandise. Platforms like Steam, which use virtual currencies for other products, were also excluded.
In 2021, Singapore’s Ministry of Home Affairs reviewed the Remote Gambling Act 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 random items.
In Australia, loot boxes may fall under gambling laws if they involve "money or anything of value." However, it is unclear whether in-game items have enough value to be considered gambling. The Victorian Commission for Gambling and Liquor Regulation considers loot boxes gambling but cannot prosecute overseas companies.
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 claimed 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 stated that FIFA games do not have parental controls to limit spending. This, combined with the pay-to-win nature of Ultimate Team, may encourage underage gambling. The lawsuits referenced 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 claimed that Apple allowed games on its App Store to use loot box mechanics, which it said encouraged gambling and addictive behavior among consumers, including children. The lawsuit argued that Apple’s actions violated laws meant to protect consumers and stop such practices. It also stated that these apps turned Apple devices into unauthorized gambling devices, which are illegal under California law.
In August 2020, another class-action lawsuit was filed in California 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 asked a jury to decide whether Ultimate Team loot boxes are considered gambling mechanisms under California law and sought $5 million in damages.
In November 2020, a lawsuit was filed against EA in California, claiming that the Dynamic Difficulty Adjustment feature in FIFA, Madden NFL, and NHL games was designed to change how players play, making it harder to earn items in Ultimate Team. This, the lawsuit said, would push players to buy items through microtransactions. This case was dropped in March 2021 after EA provided technical information and allowed the plaintiff to consult with its engineers. The engineers concluded that Dynamic Difficulty Adjustment was not used in any Ultimate Team modes.
In January 2022, a class-action lawsuit was filed in Illinois against Take Two Interactive over the use of loot box mechanics in the NBA 2K series. The lawsuit, filed by a parent on behalf of their child, stated that the games made it harder for players to understand the real-world cost of buying loot boxes. The lawsuit claimed this was a deceptive practice.
Impact
In late 2017, increased criticism and rules led many game developers and companies 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. Some companies changed how they make money instead, using methods that avoid randomness, such as battle passes that require completing challenges, like those in Fortnite Battle Royale.
Other games kept loot boxes but changed how they work or how they are bought. For example, in March 2019, Heroes of the Storm stopped allowing players to buy loot boxes with real money. Loot boxes with random items are still given for free, but players can now buy certain cosmetic items directly with real money. In January 2019, Fortnite: Save the World changed its loot boxes so players could see what was inside before buying, to reduce concerns about gambling. In 2022, Fortnite stopped allowing real money to buy loot boxes or starter packs. In June 2021, FIFA 21 introduced a similar change called Ultimate Team Preview Packs, letting players see the contents of packs before purchasing.