What’s a Labubu? On the invariable addictiveness of variably dispensed goods.

Labubus. Kinder Joy Eggs. Genshin Impact. Magic the Gathering.

Odds are, you are already aware of one of these, if you are an average pervasively-online citizen of the internet.

Two, if you have had a childhood since 2001.

Three, if you are a nerd.

Four, if you are a mega nerd.

(P.S. I topped out at three)

Many people do not think of themselves as gamblers – maybe you are one of these people. I was too. Yet, turns out, many things in our humdrum lives include some component of this and the associated hits of dopamine when we get a random reward. Read on to understand the behavioral formula behind Labubus and other similar products.

Toys are all of us: especially ones that come out at random

Many of you may know of the cute Kinder Joy: fashioned after Easter eggs, they have two things kids love – sugar and toys. Get a surprise toy and eat some chocolate; it is a win-win!

Many of you may also know the ugly-cute Labubu doll that is making stock markets and wallets quake in unison. Apparently, the word “labubu” actually means a mythological shape-shifting being from Nordic folklore. Makes sense that its mythological, considering that the modern-day imploding trend features this lovable icon. PopMart, the Labubus’ manufacturer now has $670 million in revenue this year, with a market capitalization of ~$56 billion, more than 3x higher than toy-making Mattel and Hasbro combined.

A Labubu and a Kinder.

The Labubu consumerism is a perfect example of something that’s been around in different forms for us across history: juiced up dopamine hits from variable reward schedules. 

Variable reward schedules – a dog, a pigeon, and some behaviorists are quivering at this – where we receive a reward after an unpredictable amount of time or actions, are the cornerstone of a lot of products and services we know today. It makes us slower to learn and harder to stop our behavior and decisions, because we keep anticipating a reward. It is a profound psychological theory that can drive everything from gambling to a toxic relationship; positive things given at random after a specific behavior, strengthen that behavior. 

(Shameful self-disclosure: I once bought twenty Kinder Joys because I wanted a specific toy. Knowing the theory behind this behavior is not necessarily enough to stop either.)

Dispensing machines and choice paralysis

If you have not got the Labubu hype yet, no problem – instead, let us dial it back and talk about something you are more likely to have used in your lifetime: vending machines. You put in some money, and it spits out your chosen goodie; easy to see why it is easy to love. Imagine craving something gooey-sugary-fudgy after work, walking to your friendly neighbourhood vending machine, and feeling stuck. So much for a friendly machine; it has ten different gooey-sugary-fudgy delights, you do not really know what to choose from. Instead, imagine that this vending machine gives you something between fewer options; you do not have to make a choice between the delights, but instead have just two options. A Snickers bar or a Chocopie among a sea of Lay’s, Pringle’s, and Pepito’s. 

Vending machine with limited Snickers.

You did not have to make multiple choices: buy or not buy? which one to eat of all the delights? should you get two of them for taste? should you just get one of each option? With two options, you just have to make approximately two choices: buy or not buy? Snickers or Chocopie?

Feeling stuck at the vending machine, not knowing what to get, is what your friendly neighborhood behaviorist calls “choice paralysis.” You probably already knew that. We think we want many options, but that actually prevents us from choosing. It is the paradox of choice, where we are presented with multiple choices, and this makes it paralyzing for us to actually choose and make a decision. Although, knowing this too does not necessarily mean we can always surmount it in real time. 

Now imagine if this vending machine had only two options, where each had an added collectible?

Arcade games to card games to video games: Motivation to action in the continuum of internalization

Similar to vending machines, are your trusty old-school arcades. You may also have been at an arcade at some point in your life, a “FunZone” of sorts. You’ll find a taste of gambling right there – at the slot machines that give you nice little tickets to exchange for cheap pens and stuffed toys. You may inherently know that what you are getting in return for those tickets is low-grade, but that hardly matches the feeling of winning some nice little paper tickets from a game after pressing a button or throwing a basketball.   

A genuine Pikachu card from the Pokémon TCG.

If not for the arcade, or perhaps, in addition to it, you may have encountered some form of Collectible or Trading Card Game (CCGs and TCGs): Magic The Gathering, Pokémon, baseball, and cricket cards, you name it – there’s a CG for it. Getting a shiny new pack of cards, opening them, and hoping you get a super rare card are familiar experiences to most of these games. Hasbro may be lagging behind PopMart, but Magic the Gathering (under their Wizards of Coast subsidiary) was a key driver for $522 million of their revenue in the second quarter of 2025. Meanwhile, the new app-based Pokémon TCG Pocket has already surpassed $500 million in revenue in less than 100 days of launch.

Now take this one step further into video games: we have the world of Gacha Games. These are free-to-play, support playing across devices from PC, to console, to mobile, with high quality graphics and engaging gameplay, storylines, and characters. The “gacha” refers to the gumball-dispensing-machine type of mechanic, where players spend in-game currency to “wish” or make a decision to “randomly” obtain characters and items. 

The common notion is that these games are targeted towards boys and men, given the fantasy world building and overt sexualization of female characters (despite also having a large base of female players). Perhaps so, but with the boom in popularity of games like Infinity Nikki (where you wish for clothes) and Love and Deepspace (where you wish for “memory cards” for combat and romantic interactions), the target demographic is shifting. These games are incredibly successful, with mobile gaming bringing access to a wider audience. Genshin Impact, for instance, made approximately $1 billion in revenue every six months at its peak. 

All these types of games tap into the realm of extrinsic motivation, where behavior depends on external factors motivating it. That is, getting the random game tickets in the arcade, character cards in the TCGs, and playable characters in the gacha games are what motivate players to play. Extrinsic motivation is theorized to be on a spectrum of how autonomously you make the decision to play: i.e., do you play the game because you really feel like you had a choice to or not. This spectrum is referred to as the continuum of internalization. The more you feel like the decision is truly yours, the more likely you are to integrate this into who you think you are. This helps explain why a lot of the sub-communities for these games have extremely dedicated players for whom the game has become a part of their identity. 

Schrodinger’s blind boxes and Capitalism’s limited drops 

A cat that is both dead ("unlucky" common item) and alive ("lucky" super rare item).

So far we have variable reward schedules, choice paralysis, and extrinsic motivation on a continuum of internalization to explain the allure of goods like Labubus, Kinder Joys, TCGs, and gacha games.

Parallelly, let us talk about chance. We tend to think we have an equal chance of getting the thing that we really want when we make the choice; an illusion of equal probabilities. Much like Schrodinger’s cat, when holding a colorful package or waiting to press a button to summon your desired character or product, we assume we have an equal chance of getting what we want or not. The product we want is there or not there until we get the reveal. The final piece in our formula, is simply, the mystery associated with this illusion. Compounding this, we also have the need for closure – we hate the unknown, so the allure of the mystery of not knowing is only momentary. The tee-up to go from “I want this unknown thing that may have what I want” to “I have to see if this unknown thing has what I want” is very quick.

This mystery is further exacerbated by the rarity associated with items and “drops”. Tagging items in a line of goods as “common”, “rare”, “ultra rare,” and drops as “limited” etc., in varying degrees, creates an artificial system manufacturing scarcity. This can create a deep urge to own something that is not necessarily needed for survival, but our behaviors to obtain them borders on the internal assumption that we need this ultra rare item, rather than just wanting it. This strategy is common across the board and not just in variably dispensed goods and services (e.g., limited menus at restaurants), but here, compounded with all the other factors in the formula, makes a compelling case for us to want to make decisions immediately. 

Skill issues, lucky days, and perceptions of fairness 

Finally, I want to bring your attention to the luck versus skills aspect here. Many people like to talk about the skills involved in different gambling and pseudo-gambling interactions. However, it may be more accurate to look at these interactions, products, and services, as on a spectrum of chance + skill.

Some of these interactions do include some element of skill – perhaps it may take some skill to shake the Kinder Joy, feel the heaviness, make an informed guess of its contents, and then make a decision. The key factor here is that we sometimes tend to misattribute the skill component in instances where there probably is none. When we think it is up to our skill, we also correlate our own efforts in having that skill.

This type of effort is often even rewarded. Some products and services try to create a system of fairness, like many of the gacha games do, with something literally called “pity systems.” This system is essentially a fixed-ratio schedule, where instead of being rewarded randomly forever, you are guaranteed some form of reward for your persistence: for example, in Genshin Impact, after 50 tries (“soft pity”) or after 90 tries (“hard pity”) you will get the chance at the "super rare" character. I say chance, because you can still lose “the 50-50” – meaning, at 90 tries, you can still lose the “super rare” character and get a back-up “standard rare” character instead. 

The algorithm is made to take pity on us, the prospective character chaser, as we keep wishing for a fictional item in a fictional world. The Labubus and Kinder Joys, on the other hand, do not have pity systems, and skills are scarcely really required to get them. Yet, the same mechanisms underlie our want for them.

So, there we are, sitting with a “limited edition” super rare fictional character, reveling in the short gratification it came with (if we got what we wanted), sometimes thinking that it was our skill and effort that got us there. Or, we wait there, when we do not get it, with the internal need to keep making decisions to get to that short gratification which keeps us wishing for more. Our emotions are quick and brief, a high that we chase. We move from desire to frustration to excitement to relief in titillating, head-spinning ways. And, we will keep going back for more.

TL;DR?

For many collectible goods and services, a user’s decision making and action to purchase them is invariably addictive, because of the emotions that they invoke. Employing a formula of variable interval schedules + choice paralysis + perceptions of fairness + illusion of equal probabilities + need for closure + artificial scarcity = we get repetitive decision making and action in favor of the products and services. It works because each of these acts like cognitive grease for us anxiety-riddled humans to make a choice. To go from “omigosh what do I want?” (frustration) → “omigosh what did I get?” (excitement).

So, what’s your favorite daily gamble?