Gaming the system: sub-optimal compliance with loot box probability disclosure regulations in China

Abstract

Paid loot boxes yield randomised rewards in video games; their use is linked to disordered gambling and they are present in approximately half of UK video games. The People’s Republic of China (PRC) is unique in legally requiring video game companies to disclose the probabilities of obtaining loot box rewards. This study assesses the prevalence of loot boxes in the 100 highest-grossing PRC iPhone games and companies’ discretionary interpretations of these disclosure regulations. Overall, 91% of games included at least one loot box, and 90.5% of games deemed suitable for children aged 12+ contained loot boxes. For games with loot boxes, disclosure statements could not be found for 4.4% of games; website-only disclosures were found for 38.5% of games; in-game-only disclosures were found for 23.1% of games; disclosures were found at both locations for 34.1% of games. Six distinct forms of in-game disclosures were identified, as were five forms of website disclosures. Overall, 13.6% of website disclosures could be considered reasonably prominent, and 9.6% of in- game disclosures were shown automatically. Loot boxes are prevalent in the most-popular PRC video games, but only a minority of games disclose the probabilities of obtaining randomised rewards reasonably prominently.

Probability disclosures are not enough: Reducing loot box reward complexity as a part of ethical video game design

“…As a digital product, there are realistically no physical limits on potential loot box product complexity (Ballou et al, 2020). Xiao et al (2021)'s survey of the 100 highest-grossing PRC iPhone games' probability disclosures revealed the high levels of loot box complexity currently being implemented. Games contained up to 433 loot boxes; some of which contained up to 80 potential rewards each.…”

“…Games contained up to 433 loot boxes; some of which contained up to 80 potential rewards each. Moreover, 65.9% of games with loot boxes disclosed a mechanic, known as a 'pity timer' by the video gaming community, that causes the probability of winning a rare reward to change as the player purchases more loot boxes (Xiao et al, 2021). Figure 2 shows an example from a loot box probability disclosure published in the UK, illustrating how the probability of winning a valuable Mario reward increased from 1% to 1.11% after a few purchases were made.…”

“…Firstly, capping the maximum number of loot boxes per game. Current video games can have over 400 loot boxes (Xiao et al, 2021). A game with many loot boxes, each with potentially unintuitive winning probabilities, limits the ability of probability disclosures to meaningfully educate video gamers (Loewenstein et al, 2014).…”

“…Secondly, capping the maximum number of potential rewards per loot box. Current loot boxes can contain over 80 individual rewards (Xiao et al, 2021), creating a further complexity hurdle for probability disclosures. A large number of rewards makes any calculation of the 'expected value' of opening each loot box more complex for the video gamer, and allows a video game company to continue selling loot boxes with alluring valuable rewards whilst only providing less-valuable rewards the vast majority of the time.…”

“…The People's Republic of China (PRC) has adopted a unique approach to loot box regulation by requiring video game companies to disclose the probabilities of obtaining potential rewards (Xiao & Henderson, 2019). This non-restrictive approach mimics information-based interventions for reducing gambling-related harms (Livingstone et al, 2019;Newall et al, 2020), and seemingly balances harm prevention whilst preserving the consumer's freedom to choose (Xiao et al, 2021). This disclosure-based approach has been recommended for adoption in the loot box context (King & Delfabbro, 2019b;McCaffrey, 2019).…”