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Whenever a Pokemon holding a Life Orb successfully uses a damaging attack, that attack deals 1.3x its normal damage, rounded down, and the attacker loses 1/10 of their maximum HP, even if the opponent is behind a Substitute. Damage rounds down to the minimum possible value for 10%—thus, if the Pokemon has a HP stat ending in any number indivisible by 10, it can use Life Orb 11 times without dying. If a Pokemon has a HP stat of 19, then Life Orb will deal 1 HP recoil per attack, so the holder can attack 19 times at most. If the attack fails, adjusts HP instead of dealing damage, or if the holder's ability is Magic Guard, or if the holder's ability is Sheer Force and the attack was boosted by Sheer Force, then the holder takes no damage from Life Orb. For multi-hit attacks, all hits are treated as a single attack for the purposes of Life Orb recoil. If the Life Orb holder uses Circle Throw or Dragon Tail and then faints from the recoil, the target is not forced out. If a Pokemon steals Life Orb by using Thief or Covet, then that Pokemon takes recoil damage afterwards.
Life Orb is the standard in damage-boosting items—all damage-dealing attacks, regardless of type or category, receive the boost in damage that Life Orb provides. In most cases, it outclasses the type-boosting items (x1.2 boost to their type only) and category-boosting items (x1.1 boost to physical or special moves, respectively). The only item with nearly as much comprehensive coverage and reliability is Expert Belt, which simply cannot deliver the same level of power demanded by the standards of the current metagame.
As a boosting item, Life Orb receives competition from two sets of items: Choice items and Gems.
Choice items, consisting of Choice Band, Choice Specs, and Choice Scarf, provide a 50% boost to the holder's Attack, Special Attack, or Speed, respectively, but restrict the holder to a single move of their choosing each time they enter battle. While granting a lower boost than Band or Specs, and while providing no Speed increase, Life Orb does allow the holder to change moves without switching out and back in. If the holder has wide neutral coverage in one or two moves, or is meant to inflict massive amounts of damage to a single opponent, a Choice item is preferred. Choice Scarf, in particular, is most often seen on revenge killers, while Choice Band and Choice Specs are for wallbreakers. Life Orb's big advantage when compared to Choice items is that the ability to switch moves also enables the holder to use set-up moves such as Swords Dance and Agility, as well as moves such as Substitute and Toxic, so is more suited to late-game sweepers who clean up weakened teams, and need no boost in Speed.
Gems, on the other hand, come in types instead of categories. Each Gem provides a 50% boost to the damage of an attack of their type, and is then consumed. For example, Fire Gem increases the holder's first Fire-type attack each game to 1.5 times its normal strength, and then vanishes. Lures—Pokemon tooled to draw out and defeat their usual counters and checks—often employ Gems to lend bite to their surprise attacks. A Tyranitar might, for example, surprise its usual counter Skarmory with an Electric Gem Thunderbolt. Pokemon that want to lose their item, such as those with the ability Unburden or the move Acrobat, also often employ Gems to get a significant boost and then enjoy the benefit of a lost item. Life Orb, when compared to Gems, is much more consistent than a Gem—it is neither consumed on the first attack, nor is it keyed to any one type. Life Orb is by far the more useful item in most situations—Gems are called for only with very specific builds.
The only real downside to Life Orb is the passive damage aspect, which when combined with sandstorm, entry hazards, and possibly Substitute, can really weaken your sweeper very quickly. This is also unfavorable in another way, since the damage taken from Life Orb instantly tells your opponent what item you have, so you have basically no chance of bluffing a set you are not running if you attack even once. However, if you have a fast and reasonably strong sweeper on your team that needs some added damage to score certain 2HKOs or OHKOs, or simply wants to trade longevity for killing power, look no further than Life Orb.
Battle Subway, 48 BP.