Origin

The exact origin of the “you laugh you lose” game is unknown, but a Google Trends search for the term shows a rise in interest starting in June 2007. The game likely began earlier than this date, but started spreading around June.

The Encyclopedia Dramatica entry for “You Laugh, You Lose,” (created in 2007 and last updated 2010) claims the game started on 4chan board /b/ and states an alternative set of rules in which users post as offensive memes as possible, and if someone laughs they’re deemed “unfit for society” and lose (quoted below):

Many claim that You Laugh, You Lose threads used to be entirely different from what they are today. The idea being that you or somebody else posts an image that is seriously offensive. Anyone that laughs at the posted image, loses. Anyone who laughs is no longer considered a functioning member of society and therefore loses. I suppose anyone who laughs at these threads is still no longer a functioning member of society, so not much has changed really.

An early example of the game outside of 4chan can be seen on an Ultimate Metal forums post titled, “You laugh, you lose…” from June 24th, 2007, in which the post creator describes “the rules” via a ??? PROFIT!!! format (shown below). The post was extremely popular, resulting in over 5,000 replies over the course of eight years.

The game became associated with a number of image macros, typically using images of people on the phone and featuring a variation of the phrase, “What’s that? I laugh I lose?” used to signal a “you laugh you lose” thread on various 4chan board (examples shown below, center and right). One of the earliest of these shows an Asian man on a cellphone under the text, “wuts dat? I raff I ruse?” which has been used in countless 4chan posts (shown below, left).