Nothing is as misunderstood as loot boxes in gaming (virtual currency is a close second). Critics decry them as a normalization of gambling that preys on weak impulse control. Strip away the moral panic, and a sanguine explanation emerges: loot boxes solve two vexing economic problems.
Games create heterogeneous value among players, and second‑price auctions reveal it. Magic: The Gathering cards and Counter‑Strike weapon skins routinely fetch five- or even six‑figure sums. However, while auction houses help maximize price, they exclude large portions of the player base from participation. Loot boxes address this inequality problem by correlating reservation price (willingness-to-pay) with actual price.
Like any lottery, loot boxes fractionalize value by creating a chance-based “ticket”. Many games extend this to “shards” or token-like “pieces” of character that may be summoned when players collect a particular amount. This is a common economic value distribution system in many other facets of life, such as the NBA draft, charter school admissions, or the distribution of the Switch 2.
The second reason is simply the reduction in cost from a loot-box store (pun intended) versus a direct store. Selling a mystery box is operationally cheaper than running a forever‑changing shop. “Here’s a pack—take it or leave it” trumps curating endless bundles and flash sales. The contrast between Overwatch 1’s vending‑machine interface and Overwatch 2’s department store tells the story of one click versus cognitive overload. Players face a single decision: yes or no, while developers save on store logic.
Furthermore, nearly all popular loot box systems give players direct choice, slashing costs for top “menu items.” I.e., when a loot-box-based game like Apex offers crafting currency in loot boxes, players craft their most preferred item, then the second preferred item, etc., as they collect currency.
Loot box critics have struggled to acknowledge the functional intent, but understanding this purpose is crucial to any meaningful dialogue about responsible monetization.