In the gaming context, loss usually refers to one of the following two things: Losing a match or encounter and losing network packages. While the former is an obvious concept, the latter may not be, so it is described here in more detail.

As most computer games use UDP for network communication, it is not always guaranteed, that a particular data package that was sent, is actually received by the recipient. As there is no connection or acknowledgement of a package, the sender does not know, whether the package is reaching the destination and the recipient is simply not waiting for any sent data. That's true for the basic UDP protocol.

However, games implement additional layer(s) of protocol(s) on top of UDP. A simple example would be a serially incremented number in each package. It is incremented by each package sent to the communications partner and also the last received package number is included into the replies. This way the other side can see whether it missed packages. And also the sender will notice either missed packages of the other side or (with the reflected own numbers gotten back) finding out that loss happened when sending. So essentially there are means to measure loss. There are games, such as Counter-Strike 1.5 or Star Trek: Voyager Elite Force, that give a player the means of discovering and showing that (“net graph”). With the help of certain cvars, there are even some means available, to reduce the effects of a so-called lossy connection for example by sending a specific package multiple times.

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