Ever heard of an Ecommerce Casino? (6)
There is a new craze being peddled around by Youtubers called “Mystery Boxes” (with a twist).
You basically gamble money for mystery prizes.
For example, you can pay $299 to open an Apple Mystery Box. You could win big prizes like an Apple iMac Pro down to something like a crappy apple lightening cable lol.
We’ve seen similar concepts like this before…
But here’s the twist people can sell back their prizes (at a discounted price) in order to get more credit.
Let’s say you paid $299 for the Apple Mystery Box, you won the Apple iMac Pro, you then sell it back for $4000. Now you are up $3700 you can buy more boxes, rinse and repeat. You are officially gambling with cash.
This current concept is getting a lot of flack and will probably get shut down quickly as they are targeting kids, and the websites look pretty sketchy.
But I do believe something bigger and more polished will come in it’s place.
This angle could be a great way to:
- Sell off unsold inventory.
- Engage with loyal customers.
- Use it as an angle for sweepstakes/lead gen.
- Or simply running as a standalone business.
This is one of the main sites I'm talking about: mysterybrand.net
Anyone had an experience leveraging the "mystery box" angle?
Closest parallel I can think of is of the 'penny auction' sites, eg quibids.
I know those are still being run and doing really well for some, so I don't see why this couldn't work and even perform better.
Yeah I've seen a few videos like this and legit the kids are opening the boxes like slot machines lol. Open open open open prize! (sell it back for more credit) open open prize! (sell back for more credit) open open open open open, casino algos haha
I did also see some funny 'dark web' mystery boxes although not the same idea some weird as content in them lol
This is simply ingenius!
People love the uncertainty. The Japanese has been doing this for many years:
https://en.wikipedia.org/wiki/Fukubukuro
I have a friend who was already very smart as a kid. She would buy big sheets of stickers for something like $4 HKD, cut them up into individual stickers, throw them in a bag, take them to school and ask her friends to draw - and charge something like $0.50 per draw. Never had to ask her mom for spending money again. 
And the "twist" is really next-level stuff - inspiring some new ideas!
Basically the seller is in full control of profit margins - the total cost of the products they put in the boxes will always be less than the total they sell them for. It's like how the house will always win in the long run, as the odds are stacked against the gambler.
Thanks for sharing this MrG!
Amy
Awesome, this is powerful stuff! It has the potential to go really big! But it also may, at some point, fall under gambling laws (if it hasn't already).
Loot boxes (or some form of them) are in almost every single video game nowadays. Kids and adults go crazy over them. Overwatch did about 1 billion dollars IIRC partially thanks to those things. It's an ethical grey area that's still mostly unregulated. I think I read somewhere that the Chinese government passed a law stating you should list the odds/percentages of winning a rare item or something of the sort.
This sort of stuff works and will continue to work for a number of reasons. I'm currently reading "Thinking, Fast and Slow" by Daniel Kahneman and it so far has cleared up so much - highly recommended read! Psychology related, especially useful as an addition to copywriting books and enhancing your skills.
There's the "variable rewards" bit (as described here: https://medium.com/behavior-design/h...79c45faebc05): "Results from a study conducted by Stanford Professor Brian Knutson determined, startlingly, that the part of the brain that becomes stimulated and is responsible for most of the pleasure we receive is not activated when a reward is received, but in anticipation of it."
There's the pleasure from anticipation that's going to keep you buying boxes. That's why video game loot boxes always have a slight delay before they "open".
Then there's the availability heuristic - you think if you keep flipping a coin your odds of getting heads or tails are going to improve (i.e. you get tails 5 times in a row), when in reality the odds stay the same. I think this is also known or related to gambler's fallacy (?).
If you win a more expensive product or get a hold of a "legendary/unique" in game item you'd overestimate the chances of you getting rarer things. Same thing with say, car crashes - if more crashes happen in your city over a given period you'd overestimate how many people die in car crashes. If these stores show how people win expensive items you'd think you have a better chance to win.
Being able to sell back their prizes is I think part of the sunk cost fallacy too. People think they can recoup their losses, so that cash back keeps them buying even more boxes.
I like the idea of selling off some inventory as loot boxes, especially slow moving stuff.
It'd be best to check with a lawyer about the legality of this, as a few people have already pointed out.
Blizzard stopped selling lootboxes is Belgium as the government deemed it to be gambling.
The problem is that often, the people that are more defenseless are targeted, such as kids. Which really - and IMO rightly so - triggers regulators.
That doesn't mean there's no value in the model as such, because there are different market segments and customers. A lot of people are cost driven and like a bargain, so this could be a good way to address that.
I would target only a set of our customers, as I wouldn't want to risk pissing off a loyal, high-value customer by getting a low value box in his hands (by chance).
But there are also potential customers out there which we currently can't serve. Offering something like a mystery box to them could work well.
As @mrgreen mentioned originally, it'd be great to hear some real life experience from someone that either got it to work, or failed..
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