The gacha system is a term used to describe a certain type of monetization scheme commonly found in free-to-play mobile games. It was popularized by the Japanese smash-hit mobile game Puzzle and Dragons, one of the most popular mobile games ever released in Japan. The system is now widely used in mobile games made all over the world, though it is still most common in Japanese titles.
The gacha system gets its name from its similarity to Japanese gachapon machines, machines that distribute capsules containing a random toy from a small pool of toys when someone puts money into them. Like the namesake, gacha games give out randomized rewards in exchange for some form of in-game currency. In almost all cases, some amount of this currency can be earned by simply playing the game; inevitably however; it can also be purchased with real money if the free currency isn't enough.
While the gacha system bears a resemblance to the popular Western microtransaction trend of blind boxes or crates containing cosmetic items, the prizes for playing a gacha are not cosmetic — they instead tend to be vital to playing the game at all. Most "gacha games" cannot be played without engaging with the gacha system, as core features are often walled off behind it.