Loot Boxes & Controversy (A Simple Guide)

6 minutes read
Loot boxes can be used for good and for bad

Movie fans probably already know what the term Easter egg means. In case you don’t know, then they’re basically messages, images, or some other fun surprise that’s hidden in a movie, usually a pop-culture reference.

These special treats can also be found in video games, and loot boxes come under this heading as well. But what exactly are loot boxes?


What is a Loot Box?

Loot boxes are crates that can appear at random in a game or at the end of certain stages. A loot box contains a mystery prize that’s designed to add something to your gaming experience. It could be a new skill, a powerup, weaponry, or something simple like a costume change.

The defining feature of a loot box, other than the fact they contain useful prizes, is that the reward is random. In general, they also cost money. Some are free, as part of a promotion or in-game achievement. In most cases, though, players pay for a random reward.

That means you don’t know what you’re getting when you pay for a loot box. The value of the prize could be worth less than the cost of the loot box or it could be worth more.

Some people have likened this to gambling which, in turn, has drawn criticism from governments and regulators, but more on that later.

Loot boxes' purpose is to upgrade your characters

The History of Loot Boxes

Loot boxes evolved from the loot system that was first introduced into massively multiplayer online role-playing games (MMO and MMORPGs) in the early noughties.

The Japanese version of the side-scrolling MMORPG MapleStory (2004) is credited as the first game with a loot system. In this game, the loot box was actually called a gachapon ticket.

For reference, gachapon machines (where the term for modern gacha games comes from) are popular in Asia but versions of them exist around the world. They’re like vending machines.

You put in a coin, turn the handle and a random box/ball falls out. Inside that box/ball is a toy. The same premise is true with loot boxes.

The original loot box in MapleStory cost 100 JPY (Japanese Yen) and, once a player deployed their ticket, they received a random in-game reward.

The loot box system gradually gained traction after 2004 thanks to games such as ZT Online. It wasn’t until the advent of online (social) and mobile gaming, however, and specifically free-to-play games, that loot boxes really took off.

Because free-play games typically come under the casual gaming category, developers want to keep players engaged for longer in order to generate more ad revenue.

Loot boxes have been slowly implemented in all sorts of game types & genres

Adding the Loot Box System to All Games

As such, loot boxes were introduced as a way of adding new elements to social and mobile games such as Zynga Poker. From here, the idea caught fire with developers and players.

The loot box system quickly became popular in video games and, from 2010 onwards, many of the top titles were experimenting with random rewards.

For example, in 2013, Counter-Strike Global Offensive introduced a weapons case update. These cases cost money but contained a random weapon players could use in the game.

Battlefield 4 quickly followed suit with its battle packs and, from there, a new side industry was born. Today, the loot box system, although controversial for some, remains part of gaming.

In fact, according to data from Statista and Juniper Research, loot boxes, as a sub-sector of gaming, will be worth $20 billion by 2025.

Most loot boxes improve your characters' skills and / or design

So now, having covered what a loot box is, let's take a look at some of the most popular loot box rewards out there.

These random rewards come in all shapes and sizes. As we previously mentioned, they aren't confined to one genre alone, and they can be found in almost any type of game - from casual to strategy games.

You could theoretically find a loot box for almost anything. Some of the most common rewards you can get are:

  1. New costumes
  2. New items
  3. New weapons
  4. Skill upgrades
  5. Increased health, power, status points
  6. Game credits/currency
  7. Game skins
  8. New characters
  9. Extra time

Basically, anything that could help you progress in a game can be stuffed into a loot box. It’s worth noting that loot boxes aren’t available in all games. Some games simply don’t have the capacity to offer this feature, others wouldn’t fit into the genre.

What is the Loot Box Controversy?

Loot boxes have become extremely popular over the last two decades. The way in which they’re presented, however, has raised the debate as to whether or not they’re a form of gambling.

Researchers from Australia and New Zealand likened loot boxes to things such as lotteries and slots. Writing in Nature Human Behaviour, the researchers described loot boxes as “psychologically akin to gambling.”

This assessment hinges on the fact that the rewards offered are random. The rewards can be worth more or less than the cost of the loot box, meaning that players are taking a risk when they purchase them.  This risk is similar to what casino gamblers experience when they play slots et al.

Others argue that loot boxes are simply a fun addition to games. They’re not compulsory and players aren’t buying them with the intention of financial gain.

The point here is that there is a debate and governments around the world have commissioned reports into the nature of loot boxes. Some countries have drawn up rules regarding their use in video games, others have said they must comply with local gambling laws.

What’s important to remember, however, is that loot boxes aren’t illegal, and they are still available in games.

The future of loot boxes is still unclear

The Future of the Loot Box: NFTs and the Metaverse

Loot boxes could play a prominent role in the Metaverse. With life in a digital world essentially like a game, there is scope to offer random rewards for anything and everything via the loot box system.

We’re not quite at that stage yet, but we’re already seeing NFTs being put inside crates. For example, Atari released its first loot box NFTs in 2022.

The idea is that people can buy a loot box and receive a random NFT at a later date. Given that more and more companies are creating their own NFTs, loot boxes could be a way of generating hype.

In turn, they give people a chance to receive a random NFT that could be worth a lot or a little. What’s more, with gaming companies also embracing NFTs, we could see more crossover innovations with loot boxes in the future.

Only time will tell!

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