MysteryBrand Loot Boxes Questioned by Gamer Sites

Monday, January 7th, 2019 | Written by April Bergman
MysteryBrand Loot Boxes Questioned by Gamer Sites

MysteryBrand, a site which launched in late-2018, is selling loot boxes which contain real products. The site, which is promoted to millions of viewers by popular YouTubers like Jake Paul (pictured) and Brian “RiceGum” Le, was outed to the gaming media by a Motherboard article.

Since then, fellow YouTube influencers like Ethan Klein and PewDiePie called out Mr. Paul and Mr. Le for their promotion of MysteryBrand. Both YouTube personalities are said to have received $100,000 to help promote the site, which PC Gamer described as an “obviously-slimy operation“.

The MysteryBrand website has color-coded loot boxes, which show customers how rare the items inside are. For as little as $7, customers receive a gaming-themed box that has real world prizes inside.

The prizes for common loot boxes might be a keyboard keycap remover, a fidget spinner, or a mouse. Some boxes contain Alienware laptops or other high-end items.

Visitors might receive vacation packages, graphics cards, a phone case, digital watches, or even expensive cards. Loot boxes might contain Lamborghini Centenarios valued at $2.5 million or California mansions worth $250 million.

How MysteryBrand Loot Boxes Work

Once you open your box, you have two choices: sell the contents back to MysteryBrand or have the item shipped to you. The buy-back option is key to the business model — and the most controversial part of a very controversial new type of lootbox.

MysteryBrand’s FAQ page states that players can sell back any item for 80% of its value: “You can sell the item that you do not need by simply pressing a button and get a cashback for each item up to 80% of the cost instantly.”

That would amount to a house edge of 20%, which would be illegal for most games in most land-based casinos in most US states. Only the lottery tends to have a worse house edge, but only state-sanctioned lottery organizations can offer those odds.

Selling Back MysteryBrand Lootbox Items

Part of the sell-back program is the ability to trade in the prize for money to go after another prize. By trading in their prize for a shot at the pricier loot box, the player often loses their credit (bankroll) until they are stuck with a prize cheaper than the cost of another loot box.

In short, customers unfamiliar with how gambling works often face the “risk of ruin”. For those unfamiliar with gambling terms, the risk of ruin is the chance that you spend your entire bankroll and can no longer gamble.

Create Your Own Loot Boxes

The site also allows customers to create their own loot boxes. Tyler Wilde of PC Gamer wrote that he created a box with two items, including a Lamborghini Centenario with an estimated value of $2.5 million and a $1.10 sticker that says “iPoop” which goes on a commode.

The creator can assign the possibility that each item ends up in the loot box. In Tyler Wilde’s case, the car had a possibility of 0.001% and the sticker a 99.999% of being drawn. The MysteryBrand-generated cost for such a box was $28.48.

PC Gamer pointed out that the items were overvalued. A solid state drive which was said to have a value of $114 sells for $53 on Amazon. The Lamborghini Centenario ranges from $1.9 million to $2.4 million, but in either case is overpriced by at least $100,000 on MysteryBrand.

Connection to GSA Payments

The MysteryBrand site has other clues that it is spotty. For instance, one payment method is G2A Pay, which is owned by G2A, a Steam payment method which PC Gamer once described as allowing the kind of bad behavior (hot credit cards, quick transactions) which constitutes “a quick-and-dirty form of money laundering.

Also, critics point out that the site is full of typos and misspellings. Much of what BestOnlineCasinos found were slang terms and netspeak, though the site creators used terms like “trade mark” instead of trademark — which certainly undermines the credibility of a site trying to protect its trademark.

Tyler Wilde pointed out that the legalese on the site contains a double-negative which a lawyer could drive a truck through. The stated policy, “The web site under no circumstances does not return the money spent on a mystery box,” means in fact that the website does return the money spent on a mystery box — though you’ll have to hire a lawyer to force that policy.

The real controversy is the question of whether MysteryBrand loot boxes are legal — and whether they will lead either to greater government oversight of the video game industry as a whole.

Thompson Coburn, a St. Louis-based law firm, wrote in 2014 about online ‘grab bags’, stating: “One scenario that might raise concerns would be if the prizes had significantly different values. The element of chance may then be present—along with prize and consideration.”

Tim Perk: MysteryBrand Spokesman

In an email statement to Verge, MysteryBrand spokesman Tim Perk admitted that his company does not own swanky mansions and certain other items in the virtual inventory. Mr. Perk said his company did not need to own such items.

Tim Perk wrote, “We do not need to physically own these cars or houses to include them as prizes in the box. If the user were to win such a prize, we would either offer them the exact money value of the prize, or our representatives would personally fly in to the city of the winner and help them with the purchase of a car or house.”

Despite Mr. Perk’s statement, the sales copy on MysteryBrand’s homepage states: “Complete clarity: You can see everything. Who got, when and what. Low prices guaranteed: Thanks to bulk buying, prices that we offer in our store are the lowest on the market. Only checked goods: We have in stock only checked and revised goods from reliable suppliers. Every single item is tested before shipping and supported with all necessary documentation.”

That would imply the company owns every item found in the loot boxes. The “complete clarity” promise also raised issues with PC Gamer, which noted that customer’s emails often were visible for the entire Internet to see. The site appears to have no privacy policy.

MysteryBrand and StockX?

Tim Perk disputed claims MysteryBrand does not send items that customers win. He stated that his company uses StockX to deliver goods. Perk said, “Sometimes, shipping may take up to a couple of weeks since we mostly use the StockX platform for purchasing and delivering prizes to the winners.”

He added, “StockX has a longer delivery time because each item is thoroughly checked for authenticity, and we would happily sacrifice delivery time to ensure our customers only receive authentic products of the highest quality.”

When contacted, StockX claimed it had no relationship with MysteryBrand and, in fact, had never heard of the website.

How MysteryBrand Could Impact the Video Game Industry

Whatever the case, the MysteryBrand website takes any ambiguity out of the loot box arguments. Most defenders of loot crates say they sell virtual items which have no intrinsic value outside of a video game. That argument likely will not hold up over time, but MysteryBrand makes no pretense that it is selling real world items for real money. It is gambling, pure and simple.

PC Gamer said, if the business model proves to be popular and enduring, it could lead to direct regulation and oversight by governments worldwide — including the US federal government or a bevy of state governments. As the writer stated, MysterBrand “is targeting young people who are used to spending on videogame loot boxes, and if the idea takes off, it may affect the present conversations about the legality of videogame loot boxes.”