Loot boxes basically mean special promotional offers where there is a “virtual box” that the player opens. Opening this box confers random in-game bonuses, either temporary or permanent, to the player. Loot boxes are either tied to some sort of extraordinary performance within the game, or more often they are part of how a game monetizes itself, and thus available for purchase. Most of the world’s most popular games offer loot boxes for purchase, including NBA 2K20, Call of Duty, Counter-Strike, League of Legends, DOTA 2, FIFA, Overwatch (the video game), Team Fortress 2 and Magic: The Gathering, among others.

Variations in loot boxes in video games

Different companies will have different loot box strategies, depending on their MO and the type of game in question. In a card-based game like Magic: The Gathering, for example, the “loot” available will almost be the virtual “cards” themselves. These can be traded at times among players for sometimes eye-poppingly high values, depending on their value in the game and their scarcity. Also since it’s largely duel and tournament-based, it’s important that players see a fairly level playing field. For this reason, in-game buffs would be a bad idea to include in loot boxes in such a video game.

League of Legends has also, over the years of its existence, removed things like runes and permanent buffs almost entirely, opting for an entirely different system, for much of the same reasons. The difference with a game like League of Legends is that it lets you buy the champions themselves which you play. However, League of Legends’ loot boxes are not centered around the champions themselves, but rather their skins. The online culture surrounding that game has to do with skins; they are seen as a status symbol in-game. “Skins mean wins”, League of Legends players are known to say.

Are loot boxes gambling?

Loot boxes aren’t exactly the same thing as gambling in an online casino, since there is no chance for non-monetary winnings to be provided to the player, however, they do have many similarities. The biggest one of these similarities is simply the fact that loot boxes are chance-based, and tend to be responded to emotionally in the same way by players as gambling for real money does. Research has indicated a possible correlation between the dopamine high from winning at roulette, for example, and getting an optimal result from a loot box in a videogame. This indicates a similarity between loot boxes and gambling.

Legally, various countries have come to conflicting rulings regarding loot boxes, but most countries, like France and Australia, have ruled that, since real-world money is not available to be won, they don’t legally constitute a form of gambling. Perhaps most importantly, the UKGC, the world’s most authoritative and prestigious gambling authority, has just ruled that loot boxed do not fall under their regulatory purview. An important counterpoint, however, is that in-game items are often bought and sold on third-party websites, and, as such, loot boxes could wind up legally being considered a de facto form of gambling in the future.

Conclusion

Loot boxes are part of a wider mechanic of in-game purchases that have been wildly successful for video game provider companies. Over the past couple of decades, these companies have found that this type of model works a lot better than a subscription-based model, which was a common way of monetizing a video game roughly two decades ago, at the onset of massive online gaming. Almost all players wind up “coining” at one point or another in their online video gaming experience with any given game. Also, monetizing in-game benefits removes the ceiling per player present with a subscription model.