Loot box

"Loot crate" redirects here. For the subscription box company, see Loot Crate.

Mock-up image of opening a loot box in a video game

In video games, a loot box (also called a loot crate or prize crate) is a consumable virtual item which can be redeemed to receive a randomised selection of further virtual items, or loot, ranging from cosmetic customisation options for a player's avatar or character to game-changing equipment such as weapons and armour. A loot box is typically a form of monetization, with players either buying the boxes directly or receiving the boxes during play and later buying "keys" with which to redeem them. These systems are considered similar to gacha (based on gashapon, i.e. capsule toys), which is popular in Japan, and may be integrated into gacha games.

Loot box concepts originated from loot systems in massively multiplayer online role-playing games, and from the monetisation of free-to-play mobile gaming. They first appeared in 2004 through 2007, and have appeared in many free-to-play games and in some full-priced titles since then. They are seen by developers and publishers of video games not only to help generate ongoing revenue for games while avoiding drawbacks of paid downloadable content or game subscriptions, but to also keep player interest within games by offering new content and cosmetics through loot-box reward systems. Loot boxes are just one form of chance-based mechanism used in paid reward systems within some digital games, and research has explored their impact on children, youth and families, and the boundaries between gaming and gambling.

Loot boxes were popularised through their inclusion in several games throughout the mid-2010s. By the latter half of the decade, some games, particularly Star Wars Battlefront II, expanded approaches to the concept that caused them to become highly criticised. Such criticism included "pay to win" gameplay systems that favoured those that spent real money on loot boxes and negative effects on gameplay systems to accommodate them, as well as them being anti-consumer when implemented in full-priced games. Due to fears of them being used as a source in gray-market skin gambling, loot boxes began to become regulated under national gambling laws in various countries at the same time. Due to the legal concerns over loot boxes, many game developers switched to other mechanisms for monetization, such as battle passes.

Design

A "loot box" can be named several different ways, usually related to the type of game that it appears in. A "loot box", "loot crate" or "lockbox" is often applied to shooter games since one obtains new equipable outfits or gear from it. Digital card games may use the term "booster pack" following from collectible card game roots.

Loot boxes are often given to players during play, for instance as rewards for leveling up their character or completing a multiplayer game without quitting. Loot boxes may also be given out through promotions outside of gameplay, such as watching certain streaming events. Players can also buy them directly, most often with real-world funds but also through in-game currency (sometimes, in-game currency can or has to be paid for with real-world funds to obtain lootboxes). Some loot boxes can be redeemed immediately, while redeeming others requires further consumable items dressed as "keys".

Loot boxes are generally redeemed through an in-game interface which dresses the process with appealing visual and audio effects. Some such interfaces are similar to those of slot machines or roulette wheels, and designed to create a psychological response to increase player excitement. When the player runs out of loot boxes or keys, a prominent button may be displayed with which they can buy more.

The items that can be granted by a loot box are usually graded by "rarity", with the probability of receiving an item decreasing rapidly with each grade. While the set of items given are randomly selected it can come with certain guarantees, for instance that it will contain at least one item of a certain rarity or above. In some redemption processes, yet-revealed items are presented with a colour that corresponds to its rarity level, further heightening the excitement of revealing the items. Some game systems include a "pity-timer" mechanic, which increases the player's chances to receive a rarer item from a loot box if the player has not received one in the last several loot boxes they have opened. This pity-timer mechanic may also be used if the player purchases loot boxes in bulk rather than individually, such that one of the loot boxes in the bulk purchase is assured of having a rarer item.

The player's inventory is managed in server databases run by the game's developers or publishers. This may allow for players to view the inventory of other players and arrange for trades with them. Items obtained from loot boxes and equipped or used by the player's character are nearly always visible to all other players during the course of a game, such as seeing a character skin or hearing a voice line.

Most loot-box systems grant items without regard for what the player already owns. Means are usually provided to dispose of these duplicates, often involving trading them with other players or converting them into an in-game currency. Some loot-box systems allow players to then use this currency to directly purchase specific items they do not have.

Some loot-box systems, primarily from Asian developers, use an approach adapted from gashapon (capsule toy) vending machines. These gacha games offer "spins" (analogous to turning the crank of a capsule machine) to get a random item, character, or other virtual good. One form of gacha called "complete gacha" allows players to combine common items in a set in order to form a rarer item. The first few items in a set can be rapidly acquired but as the number of missing items decreases it becomes increasingly unlikely that redeeming a loot box will complete the set. This is particularly true if there are a large number of common items in the game, since eventually one single, specific item is required. This particular practice was banned in Japan by the Consumer Affairs Agency in 2012, though gacha games at large remain.

Some games may include seasonal or special event loot boxes which include specific items only available during the time of that event. In the case of digital collectible card games which rotate expansions in and out as part of keeping a viable meta-game, booster packs of a certain expansion may only be purchasable while that expansion is considered in standard play, and once it is "retired", these cards can no longer be earned in packs, though still may be gained from the use of in-game currency and used outside standard play.

History

An array of gachapon (capsule toy) machines in Hong Kong. Loot boxes were inspired by the random distribution of gachapon one could acquire through these machines.

Loot boxes are an extension of randomised loot drop systems from earlier video games, frequently used to give out randomised rewards in massively multiplayer online role-playing games (MMO or MMORPG) or similar games. Loot boxes took this approach and formulated a monetisation approach used by free-to-play games in mobile gaming. Loot boxes also incorporate elements of the randomness of acquiring gachapon capsule toys.

The first known instance of a loot-box system is an item called "gachapon ticket", introduced in June 2004 in the Japanese version of MapleStory. The tickets were sold at the price of ¥100 each. Like real-life gachapon machines, players attained random game items when they used the ticket on "Gachapon", in-game machines distributed across the game world.

The Chinese free-to-play game ZT Online (or simply Zhengtu) which was released in 2007 by the Zhengtu Network is also considered to be one of the early examples of video games that contained loot boxes as a part of its game system. Players in Asian countries typically do not have the funds to purchase full-cost titles, and use Internet cafes or PC bangs to play the game for free, or resort to online piracy to obtain copies of games for free. Instead of trying to change this approach, Asian games like ZT Online introduced loot boxes as a means to assure monetisation from a game that they would otherwise not receive revenue from the base sale.

Within a year, Zhengtu Network reported monthly revenue from ZT Online exceeding US$15 million, justifying the profitability of this scheme. This led to the approach of releasing games as free-to-play with microtransactions atop the title. Many free-to-play mobile games in Asian regions would offer loot-box approaches, most notably Puzzle & Dragons, released in 2011, which used its gacha approach to be the first mobile game to earn more than US$1 billion from its monetisation scheme.

In Western regions (North America and Europe) around 2009, the video game industry saw the success of Zynga and other large publishers of social-network games that offered the games for free on sites like Facebook but included microtransactions to accelerate one's progress in the game, providing that publishers could depend on revenue from post-sale transactions rather than initial sale. One of the first games to introduce loot box-like mechanics was FIFA 09, made by Electronic Arts (EA), in March 2009 which allowed players to create a team of association football players from in-game card packs they opened using in-game currency earned through regular playing of the game or via microtransactions.

Another early game with loot box mechanics was Team Fortress 2 in September 2010, when Valve added the ability to earn random "crates" to be opened with purchased keys. Valve's Robin Walker stated that the intent was to create "network effects" that would draw more players to the game, so that there would be more players to obtain revenue from the keys to unlock crates. Valve later transitioned to a free-to-play model, reporting an increase in player count of over 12 times after the transition, and hired Yanis Varoufakis to research virtual economies. Over the next few years many MMOs and multiplayer online battle arena games (MOBAs) also transitioned to a free-to-play business model to help grow out their player base, many adding loot-box monetisation in the process, with the first two being both Star Trek Online and The Lord of the Rings Online in December 2011.

Separately, the FIFA series included a "FIFA Ultimate Team Mode" that allowed players to use virtual trading cards to build a team. Initially released as downloadable content (DLC), the "FIFA Ultimate Team Mode" transitioned to a free add-on to the base game with the 2010 release, with the ability to buy card packs as a means to generate revenue for the game. EA took the success of this transition for Mass Effect 3 in March 2012. Mass Effect 3 offered "packs" that would offer uncommon gear, otherwise obtainable only by "grinding" through online gameplay. According to the game's producer Jesse Houston, these were used as a means to offset the development cost of the game's multiplayer mode. The Mass Effect 3 team worked closely with the FIFA team to get the rollout of these packs right, which Houston compared to opening a Magic: The Gathering booster card pack to make a player feel like they were always getting value from the pack.

Other early examples of packaged games with loot boxes included Counter-Strike: Global Offensive in August 2013, adding "weapon cases" in an update, and Battlefield 4 in October 2013, adding "battlepacks", though they did not become purchasable until May 2014 and never granted duplicate items. Call of Duty: Advanced Warfare, released in November 2014, included "supply drops" that contained randomised items including different variants of the game's weapons, character gear, and experience points that could be used to customise one's character.

With the financial success of Overwatch and its loot-box systems, several games—particularly from popular franchises—in 2016 and 2017 included the mechanic as part of its meta-game. This included Call of Duty: WWII, Halo Wars 2, Gears of War 4, Assassin's Creed Origins, Middle-earth: Shadow of War, and Forza Motorsport 7. By October 2017, this had led to critical review of the practice. In particular, the highly visible Star Wars Battlefront II, released amid criticism of its loot-box systems in November 2017, led to renewed discussions at various government levels related to the legality of these systems. The review aggregator OpenCritic announced plans to include a "business model intrusiveness" for games that provide a metric on how much a game's loot and DLC system can impact the game. The reaction to loot boxes in the last half of 2017 was considered one of the major trends in the video game industry in 2017.

Criticism

Player expenditures and gambling concerns

A row of slot machines in a legal casino. Various independent studies concluded or suggested that the mechanisms of loot boxes in video games share many crucial similarities with traditional slot machines in casino.

Loot boxes are considered part of the compulsion loop of game design to keep players invested in a game. Such compulsion loops are known to contribute towards video game addiction and are frequently compared to gambling addiction. This is in part due to the use of a "variable-ratio reinforcement schedule" similar to how slot machines dole out prizes. While many players may never spend real-world money in a loot-box system, such addictive systems can bring large monetary expenditures from "whales", players who are willing to spend large amounts of money on virtual items.

A meta-analysis of 15 studies found that lootbox spending and problem gambling symptomology were moderately positively correlated. Gambling concerns are heightened in games that offer loot boxes and are known to be played by children. Loot boxes also feed into the social anxiety around the "fear of missing out" (FOMO), as some random drops from loot boxes may be available for only a limited time, and players will be more inclined to spend money to obtain loot boxes so they do not miss out on these items. The use of pity-timers in loot box redemption also can feed into the gambler's fallacy, appearing to give credence to the player that they will be assured of a high-rarity item if they open enough loot boxes.

Video games have generally been considered games of skill rather than games of chance and thus are unregulated under most gambling laws, but researchers from New Zealand and Australia, writing in Nature Human Behaviour in 2018, concluded that "loot boxes are psychologically akin to gambling". A separate report from researchers in England in 2021 also concluded that loot boxes "are structurally and psychologically akin to gambling".

Proponents for the use of loot boxes have countered complaints that they are gambling systems by likening them to opening collectible toys such as Hatchimals or booster packs from physical collectible card games (CCGs) like Magic: The Gathering. In the United States CCGs have been subject to previous legal challenges related to if they are a form of gambling, but were not found liable. Some countries like Belgium have specifically exempted CCGs from gambling legislation because these games do not offer any type of gambling element. However, opponents of loot boxes address the fact that the process of opening a digital loot box is designed around a sensory experience and immediate return that can affect those that may be prone to gambling, a factor that does not exist with physical booster packs.

Some have argued the increased use of loot boxes in games since FIFA was due to the perception that the act of opening loot boxes is an exciting element for a game for both the player, and those watching the player either on YouTube videos or through live streaming, creating a number of multi-million subscriber video streams solely dedicated to opening loot boxes. NPD Group, which tracks video game sales, says that for games released through September 2017, there was no sign of consumer purchase change, positively or negatively, on games that included loot boxes.

NPD reported that NBA 2K18, which had been criticised by players for its loot-box system at its September 2017 launch, ended up as the best-selling game in North America for that month. Juniper Research estimated that the global video game market, worth around US$117 billion in 2017, is set to grow to about US$160 billion by 2022, buoyed by the increased use of loot boxes, particularly within China. For these reason, some developers see loot boxes as an essential means to monetise games, knowing that there will always be players willing to buy these even if most others do not.

Games with randomised in-game rewards, including those from loot boxes, and which offer the means to trade these items with other players, are known to attract the use of skin gambling. In skin gambling, these customization items, "skins", become a black market virtual currency among players and operators of websites that allow players to trade the items for real-world funds, or to use those items to gamble on esports or other games of chance; subsequently these activities have been identified as gambling by legal authorities, and several legal challenges arose in the last half of 2016 to stop this practice. Valve's Counter-Strike: Global Offensive, updated in 2013 to include randomised loot drops from in-games, has been the most visible example of skin gambling by mid-2016. Several games which followed in 2016 and onward that used loot boxes or other randomised rewards, including Rocket League and PlayerUnknown's Battlegrounds, did not include the ability to trade items or placed limits on trades, thus eliminating skin gambling from these games.

The similarities between the loot box systems and gambling mechanics have been studied in academic literature. There have been positive studies on the relationship between loot box spending and problem gambling severity, especially in adolescents and young adults., which are based on research designs of randomized reward schedules, variable ratio schedules, and audiovisual feedback mechanisms, which are reminiscent of slot machine design.

Other researchers maintain that the psychology behind playing loot boxes can be responsible of risk-taking behaviour, especially when the benefits of playing a game are monetary and the barriers to entering the game are low. Nonetheless, other researchers warn that not all correlations may result in causation. Certain studies have posited that people prone to gambling in the first place are more inclined to expend on loot boxes, which is not caused by loot boxes.

Critics have argued that many loot box systems rely on "dark patterns", a term used in behavioral economics and user‑experience research to describe design techniques that intentionally manipulate player behavior. These include time‑limited offers that create artificial urgency, reward streaks that encourage continued spending, and interface layouts that obscure the true cost of purchases. Some games also use progressive reward systems that increase the perceived value of opening additional loot boxes, even when the statistical odds remain unchanged. Researchers have noted that these design strategies can exploit cognitive biases such as loss aversion, sunk‑cost fallacy, and reward anticipation, making it difficult for players—particularly younger audiences—to make rational spending decisions. As a result, dark patterns have become a central focus of ethical debates surrounding modern game monetization.

Impact on game design

Some loot-box systems within free games are criticised as "pay-to-win" systems, and may be derogatorily referred to as "pay-to-loot". In these cases, the contents of the loot box contain items, beyond superficial customization options, which directly affect gameplay, such as booster packs for a digital collectible card game, and with the impact on gameplay proportional to the item's rarity. This can tie the quality of a player's ability to compete with others to the random generation systems of the loot pack, and may drive players into paying for additional loot boxes to obtain high-rarity items to fairly compete with others. Blizzard's digital card game Hearthstone, released in 2014, is frequently considered to require financial expenditure in booster packs to be a successful player. Blizzard claims that it attempts to minimize the effect of pay-to-win in Hearthstone, by implementing a gameplay mode which only allows players to use cards from a "core set" and from expansions released in the prior two years.

Some commentators expressed concern that for these types of loot-box models to be successful for the publishers, the game itself has to be designed around promoting and encouraging the player to purchase loot boxes, which fundamentally impacts core game design principles and may weaken the underlying game mechanics. This may include the use of loot boxes as a means to bypass the need to grind missions repeatedly to get gameplay-changing items that significantly help towards completing a single-player game, which drives players to use real money to purchase these to avoid the time sink. For example, Middle-earth: Shadow of War has a second, true ending requiring the player to gain many more stronger allies to meet its higher difficulty.

While the developers playtested the balance of the game without the loot-box system activated, assuring the game could be completed without additional monetisation, reviewers found that the game required a great deal of time needed to complete numerous additional missions for the chance to acquire stronger allies, and with the consistent presence of the in-game market for loot boxes, made it difficult to avoid the allure of paying real money to bypass this grinding, creating a negative on the overall experience. The presentation of a storefront within a game which allows one to use real-world funds to purchase loot boxes or other equipment can also impact the sense of immersion a player has with a game. By July 2018, the developers of Shadow of War had released patches that completely removed the in-game storefront and loot-box system.

Incentives for monetisation

The implementation of some loot-box systems are considered anti-consumer by some players and commentators. Full-priced games which already provide downloadable content and then include a loot-box system have been heavily criticised by players. Some gaming journalists identify the inclusion of loot boxes in multiplayer games as a justified part of the publisher's cost for maintaining the game servers, but see their use in single-player games as only a means for the publishers to profit.

Developers and publishers consider loot boxes part of a necessary process of monetising AAA video games beyond their initial sale. Publishers have been hesitant of raising the base price of AAA games beyond US$60 (as of 2017) for fear of immediately losing sales, and instead seek post-release revenue streams to cover the increased costs and pace of the development process, the stagnation in growth in video game audiences, and a shortening window of time in which to gain full-price sales of their games after release. Monetisation schemes like loot boxes can help provide long tail revenue, well after the release of the game. Post-release monetisation is believed by publishers to be necessary to compete with the mobile gaming sector, which predominantly uses free-to-play monetisation schemes. An analyst for KeyBanc Capital Markets, in the wake of the Star Wars Battlefront II controversy, said that the price of video games, even with added purchases for loot boxes and micro-transactions, remains lower than other forms of media on a per-hour basis, and that games are generally underpriced for what value they give.

Developers noted that the decision to include loot boxes in a game, and how they will be priced in real-world funds, may come from their publisher or upper management, but the implementation of their mechanics, including what they include, how they are doled out, and the like, are frequently set by the developers themselves. Some developers argue that the loot-box approach can mesh well with certain types of games, as long as they are not implemented to be a predatory manner towards consumers, and the decision to implement loot boxes within a game may be chosen by the developers rather than a mandate from the publisher. When the loot-box systems are used principally as a means to gain post-sales revenues rather than as an incentive to continuing playing the game, developers feel this requires them to significantly alter the game design away from challenge in gameplay and onto getting players to spend money. They found that games where the baseline gameplay does not encourage or require spending money for loot boxes, the addition of new content obtained from loot boxes is generally celebrated within that community and may gain brief revenue from that. Further, loot-box systems are generally better handled when their use is determined early in development so the developers can design around it, rather than a last-minute addition. Developers found that the mechanics of loot boxes are more accepted by non-Western audiences and younger Western audiences, where these groups have developed different consumption patterns than older Western players, particularly as a result of growing up playing free-to-play mobile titles.

Specific examples

Overwatch

Blizzard Entertainment's Overwatch's loot box implementation does not impact gameplay, but other aspects of the system are subject to criticism. A free crate is given to the player each time the player reaches enough experience to level-up, but the rate of experience acquisition varies with player skill. While any item contains only cosmetic appeal and has no influence on gameplay, the desire for a specific item creates a strong incentive to purchase additional crates.

Overwatch's producer Jeff Kaplan detailed the desire to create an in-game currency allowing players to directly acquire an item independent of luck or skill, but currency is only given to a player after opening a crate. Overwatch's software-as-a-service model delivers continued revenue as Blizzard adds new items to obtain through loot boxes. In response to criticism, Blizzard has made adjustments to its loot box system; for example, reducing the frequency of obtaining duplicate items from loot boxes while attempting to maintain the same in-game currency earning rate in June 2017.

Blizzard's CEO Mike Morhaime said that with Overwatch's loot boxes, Blizzard avoided inclusion of pay-to-win, gameplay-changing elements and the ability to convert rewards from loot boxes back into real-world money, and thus "don't think Overwatch belongs in that [loot box] controversy". Industry analyst Michael Pachter speculated that the loot box model of Overwatch that uses only cosmetic items will become the more preferred method of offering this monetisation in the future. Despite this, Overwatch's system still does not allow players to directly use real-world funds to purchase a specific cosmetic item, and the rate which they earn in-game currency towards loot boxes can be slow, both aspects which contribute towards in-game spending and the potential for gambling.

Overwatch 2, which released as a free to play title, did not use loot boxes and instead offered new cosmetic items through a battle pass system. An update in February 2025 brought back loot boxes to allow players to earn any cosmetic not on the current battle pass nor the current seasonal or collaboration shop content. These loot boxes can only be earned through gameplay or through the battle pass, and to minimize concerns over gambling aspects, will always include a high rarity item, with further higher rarity items guaranteed when opening every five and every twenty loot boxes.

Star Wars Battlefront II

Conversely, Electronic Arts' Star Wars Battlefront II, developed by EA DICE studio and released in November 2017, received heightened attention in the wake of the October 2017 loot-box criticism. Principally an online multiplayer shooter, Battlefront II was developed to eliminate the "season pass" approach that the original 2015 game had used, which was found to have split the player base over those that paid for the added content and those that did not. Instead, Battlefront II brought in other micro-transaction schemes that would still allow all players to play together but provided the desired revenue streams for EA. These schemes include a loot-box system providing, among other rewards, "Star Cards" that provide boosts to a specific character class, and which have tiered levels tied to rarity that provide greater boosts. Because these higher-tier Star Cards give direct advantages to players willing to acquire many loot boxes with real money than at the rate one would obtain simply playing the game, its loot-box system at the time of its open beta period had been described as one of the more egregious "pay-to-win" systems for a full-price game.

EA did re-evaluate this approach in response to criticism, and prior to full release, reworked the loot-box system so that some items still offered in loot boxes like Star Cards could also be earned through other routes such as in-game achievements, in-game currency, or through direct monetary purchase. Just prior to release, members of EA Access that had early access to the release version of Battlefront discovered that its other in-game currency and micro-transaction systems required players to spend numerous hours in game matches to earn credits at a sufficient rate to unlock special hero characters, or alternatively spend real-world funds to buy in-game currency or loot boxes that offered that currency as a possible reward. The combined loot-box and micro-transaction systems, all elements of "pay to win" schemes, drew even more criticism. Just hours before the game's official launch, EA and DICE temporarily disabled all micro-transaction purchases until they figured out a way to offer these systems in a favourable manner for consumers; DICE stated: "We will now spend more time listening, adjusting, balancing, and tuning" before they are reintroduced.

According to The Wall Street Journal, the decision to remove the micro-transactions just before launch was demanded by Disney, which owns the Star Wars properties. Disney, knowing the franchise draws in younger players, feared the loot-box systems would contribute towards gambling behavior in children. EA later affirmed its revamped approach to micro-transactions within the game to be released in March 2018, eliminating any pay-to-win elements like Star Cards as potential rewards from loot boxes: Star Cards would otherwise only be earned by an experience-point-based progression in the game, while loot crates would be limited to only cosmetic items or in-game credits to buy these items.

The player reaction to Battlefront's loot-box system led to the Belgian Gambling Commission to evaluate the nature of loot boxes specifically in Battlefront. In the United States, it generated legislative debates about a potential sales ban within Hawaii and some other US states. EA has stated that they do not consider the approach of loot boxes in Battlefront as gambling, as it is strictly an optional feature. The reaction and change to the loot box and monetisation scheme caused sales of Battlefront to fall from expectations, and EA's stock lost 8% of its value a week after the game's release (equal to about US$3 billion). Analysts expect that EA will have to re-evaluate how they monetise games in the future to avoid similar backlashes, which may further reduce future revenues.

In its fiscal quarter results following the release of Battlefront II, EA reported missing their sales mark of 10 million units by about 10%, which EA CFO Blake Jorgensen attributed to the loot-box controversy over the game. This, coupled with the removal of micro-transactions from the game while they readdressed the loot-box approach, led to the game missing EA's revenue projections for that quarter. In April 2018, EA's Patrick Söderlund stated that the loot-box controversy over Battlefront impacted the company significantly, which included a reorganisation of executive positions, and that: "For games that come next, for Battlefield or for Anthem, [players have] made it very clear that we can't afford to make similar mistakes. And we won't."

FIFA

Main article: Ultimate Team

Electronic Arts also published the FIFA series of association football games in annual installments, using the appearances and attributes of the real-world athletes in the teams on the league. Part of more recent entries in the system include its "Ultimate Team" mode, where players can form their own teams by collecting "cards" of these players, which have been offered through virtual card packs that can be purchased with in-game currency or real-world funds (Points currency). While this is a similar mechanism to other games using loot box mechanics, the use here is criticised due to the fact that cards earned from one version of the game do not carry over into the next year's version (teams remain in their account until the said edition's servers are shut down). Thus, players must work to regain a competitive team by re-earning in-game credits or spending more money by buying additional points, with the potential to continue that cycle each year. EA has since implemented Ultimate Team-like mechanics in other sports simulation series, including Madden NFL, NBA Live, NHL, and UFC.

In 2016, EA reported that revenue from Ultimate Team pack purchases was US$650 million a year, roughly half of their total revenue from microtransactions across their portfolio, and 30% of their entire digital sales revenue. CBC reported from a leaked 2021 EA presentation of the company's intent to drive FIFA 21 players to the Ultimate Team mode as the "cornerstone" of the game. In a reply, EA stated that they do not "push" players to spend money in their games and that the majority of FIFA players do not spend any money in-game.

Regulation and legislation

Main article: Regulations protecting consumers from microtransactions

Because of their use of random chance to gain items after committing real-world funds, games using loot boxes may be considered a form of gambling. While gambling laws vary from country to country, a common theme that tends to legally distinguish loot boxes from gambling is the inability to transform the contents from a loot box back into real-world money by legitimate means within the video game.

Games with loot box systems have become subject to regulation in several Asian countries, while questions of the legality of loot boxes are under consideration in some Western ones. Steven Wright for PC Gamer observed that several of the concerns for loot boxes related to gambling had been previously experienced through lawsuits in the 1990s against the baseball card industry as well as with the physical Pokémon Trading Card Game, but these cases did not impact either arena to a significant degree.

Asia and Oceania

China

In December 2016, China's Ministry of Culture announced legislation which required "online game publishers" to publicly release from May 2017 onwards the "draw probability of all virtual items and services". When the law came into effect publishers complied, resulting in a variety of statistics being released which quantified the odds of Chinese players receiving different categories of item from each loot box, some of which were as low as 0.1%. Other changes mandated by the new regulations required publishers to limit the number of loot box purchases any player can purchase in a day (including limiting the size of multiple loot box bundle packages), and requiring the publisher to give more favourable odds to the player to get rare items with the number of loot boxes they have opened, effectively assuring a player of receiving a rare item by opening a fixed number of loot boxes. A 2021 paper evaluated the state of many Chinese games that used loot boxes, and found that of the current top 100 games offered on China's Apple App store, 91 of those games included loot boxes but only about 5% of these made full, proper disclosure of loot box probabilities to China's law.

The law also banned game publishers from directly selling "lottery tickets" such as loot boxes. In June 2017, Blizzard Entertainment announced that, "in line with the new laws and regulations", loot boxes in their game Overwatch would no longer be available for purchase in China. Players would instead buy in-game currency and receive loot boxes as a "gift" for making the purchase.

Effective November 2019, China's General Administration of Press and Publication prohibited the sale of loot boxes to users under eight years of age and restricted their sale to older users under 18 years of age to a maximum monthly spending limit ranging from 200 to 400 renminbi.

Japan

Following the success of the gacha model in Puzzle & Dragons in 2011, it became recognised in Japan that the system was essentially gambling, particularly for younger players. By May 2012, Japan's Consumer Affairs Agency banned the practice of "complete gacha", in which a predetermined set of items gained from loot boxes would combine once completed to form a rarer and thus more valuable item. This was done not by introducing any new legislation, but by issuing a legal opinion that virtual items could be considered "prizes" under existing legislation written in 1977 to prevent the complete gacha practice in the context of baseball trading cards. Within a month of the opinion being issued, all major Japanese game publishers had removed complete gacha rules from their games, though many developers found ways around these rules. Japanese mobile game developers, including GREE and DeNA, worked to establish a self-regulating industry group, the Japan Social Game Association. However, this association was merged with The Computer Entertainment Supplier's Association (CESA) on April 1st, 2015.

South Korea

In March 2015, members of South Korea's National Assembly, led by the Liberty Korea Party, proposed amendments to the country's existing games industry regulation that would require games companies to release "information on the type, composition ratio, and acquisition probability" of items granted by loot boxes. Efforts by the South Korean games industry to self-regulate has not convinced assembly members, who have continued to propose statutory regulation. Chung Woo-taik, a Saenuri Party member, had questioned the practical effect of the self-regulation bill proposed by the industry, arguing that the lack of a proper penalty on loot box systems does not solve the problem and demean consumers' rights. However, there have been several revisions to the self-regulation (most recently, in July 2018), which now requires all video games to clearly display the payout rates of the items from the loot boxes to the player. There are also plans in the near future to expand the scope of this regulation to include other in-game purchases, such as the success rate of a paid consumable item whose purpose is to enhance another virtual item.

The Fair Trade Commission still oversees consumer issues related to loot boxes and video games; in April 2018, it issued a US$875,000 fine against Nexon related to its game Sudden Attack for deceptive loot-box practices, as well as two smaller fines to other companies.

The National Assembly passed a new law in February 2023 requiring games with loot boxes to publish the odds of acquiring certain items to players or to be fined, with enforcement starting in March 2024. This led, among other changes, for Respawn Entertainment to publish loot box rates for Apex Legends, while EA disabled Ultimate Team packs in FC 26 for Korean users.

Singapore

In October 2014, Singapore's parliament passed The Remote Gambling Act, which introduced a ban on unlicensed gambling websites and fines for anyone violating it. The law's definition of gambling included staking "virtual credits, virtual coins, virtual tokens, virtual objects or any similar thing that is purchased...in relation to a game of chance", leading to concerns that it would require producers of any game in which players paid money and received a randomised outcome to seek a license to operate from the government.

In response to games industry lobbying home affairs minister S. Iswaran clarified the law in parliament, stating that "the Bill does not intend to cover social games in which players do not play to acquire a chance of winning money and where the game design does not allow the player to convert in-game credits to money or real merchandise outside the game". The minister also specifically excluded platforms which offered "virtual currencies which can be used to buy or redeem other entertainment products", such as Steam, from the provisions of the bill.

However, the minister also said:

The fact is that the line between social gaming and gambling is increasingly becoming blurred. What may appear benign today can quickly morph into something a lot more sinister tomorrow in response to market opportunities and consumer trends. That is why the legislation is cast broadly.

The Remote Gambling Act was placed under review by Ministry of Home Affairs of Singapore in 2021 with the aim to amend the law be technology agnostic, and may potentially include regulations for loot boxes among other types of non-traditional gambling products.

Malaysia

In October 2021, the Office of the Mufti for Federal Territories in Malaysia published on its website and social media channels finding that the acquisition and ownership of items promoted in PUBG: Battlegrounds lootboxes are not always guaranteed despite enforcing an obligatory price of in-game currency to access them which would have to use real money, thus they qualify as a form of gambling (maisir) forbidden in Islamic jurispudence.

Australia

Within Australia, games with loot boxes would fall under gambling restrictions if they can be played "for money or anything else of value"; the question remains if items that only exist within game have "value" that can be quantified, even if this is related to an item's pretige. The Victorian Commission for Gambling and Liquor Regulation has stated that it considers loot boxes to be gambling, but does not have the authority to prosecute companies registered overseas. The commission has suggested "an immediate R rating" for any games which feature loot boxes as a solution to this limitation. In March 2018, the Australian Office of eSafety published a list of safety guidelines on the dangers of online loot boxes.

The Australian Senate passed a motion, led by Jordon Steele-John, in June 2018 directing the Environment and Communications References Committee to investigate loot boxes and report back to the Senate in September 2018. The investigation, which started in August 2018, evaluated the use of loot boxes in video games and considered them under issues related to gambling and effects on children. The report, released in mid-September 2018, found that loot boxes are "psychologically akin to gambling", and that games with loot boxes are potentially "exploiting gambling disorders among their customers". The committee recommended that games with loot boxes be labeled to warn of parental guidance and indicate that they contain "in-game gambling content" and suggest that such games be rated to represent the legal gambling age in the country. In the final report, the committee urged the Australian government to "undertake a comprehensive review of loot boxes in video games" through a multi-departmental effort to determine what legislative and other actions need to be taken.

A February 2020 report from the Australian House of Representatives Standing Committee on Social Policy and Legal Affairs that focused on internet content that should be blocked behind age verification gates recommended that the Office of the eSafety Commissioner or similar body "report to the Australian government on options for restricting access to loot boxes and other simulated gambling elements in computer and video games to adults aged 18 years or over, including through the use of mandatory age verification". By August 2020, the Australian Classification Board (ACB) had updated its regulations to state that games with any microtransaction, including loot boxes, must be labeled on their covers as containing "in-game purchases" as part of the ratings classification.

MP Andrew Wilkie introduced a bill in November 2022 that would require video games with loot boxes to be automatically rated by the ACB as R18+ or be refused a rating. By existing law, R18+ games are restricted from sale to minors. Wilkie stated that he believed that loot boxes in video games were grooming minors "for future gambling" as a rationale for the bill. The approach was modified in March 2023 so as to address any video game with simulated gambling, including loot boxes. These changes were implemented with enforcement starting in September 2024: games with simulated gambling would be rated R18+, and games "containing in-game purchases linked to elements of chance, including paid loot boxes" would be rated M.

New Zealand

The Gambling Commission within the Department of Internal Affairs for New Zealand stated, in response to a citizen's email, that currently in their view "loot boxes do not meet the legal definition of gambling", but are reviewing the situation as it progresses.

Europe

Austria

In March 2023, the district court of Hermagor ruled that loot boxes contained in FIFA (video game series) are gambling and thus illegal. The relevant question for the court was, if, on one hand, virtual goods have real value, and on the other hand, promise a gain. Especially with games of the FIFA series, there is a black market where players are traded for real money. The decision required Sony (in accepting the payment for EA) to refund the money spent on Ultimate Team packs to the users, and EA to label the FIFA games as "gambling games", requiring a license to use. The judgement is not final, and can be contested. However, Sony failed to apply for an appeal by May 2023, and subsequently, was ordered to refund money to the plaintiffs.

United Kingdom

In March 2017, the UK's Gambling Commission issued a position paper "Virtual currencies, esports and social casino gaming". The paper took the position that virtual items are "prizes", and that, in general "Where prizes are successfully restricted for use solely within the game, such in-game features would not be licensable gambling". However, the paper continues that:

In our view, the ability to convert in-game items into cash, or to trade them (for other items of value), means they attain a real world value and become articles of money or money's worth. Where facilities for gambling are offered using such items, a licence is required in exactly the same manner as would be expected in circumstances where somebody uses or receives casino chips as a method of payment for gambling, which can later be exchanged for cash.

In August 2017, the commission opened an investigation into skin gambling. Later, in November, the commission's executive director Tim Miller was interviewed on BBC Radio 4 where he confirmed that the commission had also been investigating loot boxes and suggested self-regulation of the games industry. The Commission issued a statement that month recognising that they cannot make the determination when loot boxes crosses over into gambling, as that they can only enforce what Parliament has issued as the law for gambling, and restating the legal definition of gambling in this regard from their earlier position paper. Miller said while they cannot take action toward loot boxes until Parliament changes the law, they can raise awareness of issues with loot boxes that might affect children and their parents, and are trying to evaluate the risks and issues associated with that as part of their August 2017 skin gambling investigation. Miller further stated that even if other countries were to pass laws or regulate loot boxes, the commission would still need to follow the UK's laws.

In October 2017, a month prior to the Battlefront II controversy, MP Daniel Zeichner of Cambridge, on behalf of a constituent, submitted a written parliamentary question "to ask the Secretary of State for Digital, Culture, Media and Sport (DCMS), what steps she plans to take to help protect vulnerable adults and children from illegal gambling, in-game gambling and loot boxes within computer games". In response, MP Tracey Crouch, parliamentary under-secretary for the department, referred back to the stance of the Gambling Commission's position paper, and said that:

The government recognises the risks that come from increasing convergence between gambling and video games. The Gambling Commission is keeping this matter under review and will continue to monitor developments in the market.

Separately, over 10,000 British citizens signed a petition requesting that the British government "adapt gambling laws to include gambling in video games which targets children", which includes issues over loot boxes. The government's response stated that the Video Standards Council is in discussions with Pan European Game Information (PEGI) to determine if there are any changes needed in the PEGI standards in relationship to gambling in games, and that the Gambling Commission is also considering the interaction between these games and younger players. The response also referenced the Consumer Protection from Unfair Trading Regulations 2008 law which, according to the response "includes a requirement on businesses not to subject anyone to misleading or aggressive marketing practices, or, for example, direct exhortation to buy products, such as games content, including in-game purchases such as loot boxes".

In March 2018, MP Anna Turley of Redcar asked the government to "bring forward legislative proposals to regulate the game mechanics of loot boxes". In response Minister of State MP Margot James said that "PEGI informs consumers purchasing products from major app stores if they contain further purchases and are considering the possibility of placing these notifications on boxed products", and that "regulators such as PEGI and the Gambling Commission are speaking to industry to ensure that those who purchase and play video games are informed and protected".

The Gambling Commission issued a report in November 2018 on the state of gambling and its effect on youth. While news outlets had stated that the Commission determined that loot boxes can be considered a gateway for youths to undertake gambling in other scenarios beyond video games, the Commission clarified that they had not made any direct conclusion, and only found that about 3 in 10 children in the UK have opened loot boxes in games. Starting in January 2019, the Department for Digital, Culture, Media and Sport of the House of Commons opened up public input on how immersive technology like virtual reality may impact culture, with a specific focus on "the addictive nature of some technologies". The department has also held public hearings with members of the video game industry to solicit their input. MP Margot James, the current Minister for Culture, Communications and Creative Industries, stated in these discussions that the UK's approach to how they treat loot boxes will likely be different from how other European states like Belgium have done, as the countries do not share similar laws for other gambling activities. James said "Loot boxes are a means of people purchasing items, skins, to enhance their gaming experience, not through an expectation of an additional financial reward. And also, more importantly, they can't be traded offline for money. So I think there are big differences, and I don't think really it is true to say loot boxes are gambling."

The Gambling Commission issued a statement in July 2019 that they cannot oversee the sale of loot boxes in most video games as there is no way to monetise the items within the loot box, a core distinction from gambling as written in current legislation. The Commission did caution that there are third-party sites that enable the means to monetise loot box items, similar to skin gambling, but they are not in a position to monitor those sited, and urged companies like Valve to take better steps to prevent skin gambling monetisation.

In its final report, published 9 September 2019, the Department for Digital, Culture, Media and Sport recommended that the British government take precautionary steps to prevent the sale of games containing loot boxes to minors, and to work with PEGI to make sure that games with loot boxes are labeled as having gambling mechanics. Further, the report stated that "We consider loot boxes that can be bought with real-world money and do not reveal their contents in advance to be games of chance played for money's worth" and urged the government to add games containing loot boxes as regulated under the Gambling Act 2005, which would restrict their sale. The report also agreed with the conclusions of the Gambling Commission that game publishes and developers must take more steps to limit the grey market of skin gambling. The Children's Commissioner for England came out with a report the following month echoing the same concerns, that loot boxes are akin to gambling for minors, and encouraged updates to gambling laws to reflect how games may use them to draw minors to continue to spend money.

The National Health Service director of mental health Claire Murdoch stated in January 2020 that the Service was incorporating concerns related to loot boxes and the mental health of youth into their Long Term Plan, but cautioned that "no company should be setting kids up for addiction by teaching them to gamble on the content of these loot boxes. No firm should sell to children loot box games with this element of chance, so yes those sales should end."

In June 2020, DCMS began requesting evidence from game companies related to loot boxes as part of a further investigation. It issued its first findings in July 2022, where it concluded that players of games with loot boxes were "more likely to experience gambling, mental health, financial and problem gaming-related harms". DCMS did not intend to change gambling laws in the UK to account for loot boxes as this "would have significant implementation challenges and risks of unintended consequence", but urged video game companies to employ measures to reduce the potential harm to players from loot boxes, such as implementing parental controls, more transparency on loot box odds, and warning players who have spent a large amount of money on loot boxes. The DCMS said they would not hesitate to change laws should the video game industry not work on these measures.

The House of Lords Gambling Committee released a special report on the state of gambling in the UK on July 2, 2020. The report identified the ongoing issue of loot boxes, how they may be seen as gambling and their effect on the youth, and concluded that "Ministers should make regulations under section 6(6) of the Gambling Act 2005 specifying that loot boxes and any other similar games are games of chance, without waiting for the Government's wider review of the Gambling Act."

The Advertising Standards Authority (ASA) issued guidance on mobile games in September 2021 aimed at how such games advertise their in-game premium currency. Among these factors, the ASA's guidance stated that games that included loot boxes must disclose this information on store pages and any advertising for the game. While the ASA cannot penalise companies that fail to follow their standards, being named by the ASA as going against their guidelines can be seen as a deterrent.

In February 2017, the