A Seattle firm raised $1.5 million and launched a new platform for digital collectibles, bringing the “loot box” mechanic from video games into the NFT space.
Loot Labs‘ new project Boxed.gg offers all-virtual mystery boxes that can contain a variety of digital collectibles, which can range from rare pieces of NFT art to avatars that can be used on popular websites like Reddit.
This is similar to the randomized loot boxes that can be found in popular video games, such as World of Tanks or Valve’s Counter-Strike: Global Offensive. It’s a controversial mechanic often compared to a slot machine, where players pay fixed sums of real money in exchange for a randomized amount of in-game items like new weapons or cosmetics.
As controversial as it may be, loot boxes still make up a significant amount of video game revenue. Loot Labs cites a 2020 study that claims players spent $15.3 billion on loot boxes over the course of 2020. As such, Loot Labs hopes to bring that “beloved gaming experience,” to quote its official press release, to the digital collectibles market.
“Digital collectibles are the number one monetization method in online video games,” Loot Labs CEO Milan Harris said in a statement. “People love collecting things to express themselves. We are expanding the loot box model, with the ultimate goal of providing the most fun and equitable experiences in acquiring digital collectibles.”
Boxed plans to demystify its drops. The pricing on each of its loot boxes will be dynamically updated in real time according to current market data, and the odds that a box will drop a specific NFT will be displayed honestly on the site.
Harris founded Loot Labs with Matthew Genova and Michael Ryan. They previously collaborated on the collectible card-game service TCG Royale.
Boxed is funded through a $1.5 million pre-seeding round led by Denver’s BITKRAFT Ventures, with participation from Polygon Ventures, Mechanism Capital, and Lofty Ventures Syndicate.
Hammoudi “Yassuo” Abdairhman, a professional gaming content creator on the 100 Thieves network, is on board with Boxed as an angel investor.
“The business model of Loot Labs immediately resonated with us because as gamers ourselves, we’ve been familiar with loot boxes for a long time,” wrote Carlos Pereira, a partner at BITKRAFT. “…As NFT enthusiasts, we’ve experienced the excitement of waiting for mint reveals, hoping to ‘hit a rare.’”
