What are the odds? Lower compliance with Western loot box probability disclosure industry self-regulation than Chinese legal regulation

Leon Y. Xiao, Laura L. Henderson and Philip Warren Stirling Newall
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Leon Y. Xiao: IT University of Copenhagen
Philip Warren Stirling Newall: University of Warwick

No g5wd9, OSF Preprints from Center for Open Science

Abstract: Loot boxes are purchased to obtain randomised rewards in video games. These mechanics are frequently implemented, including in children’s games, and are psychologically akin to gambling. Emulating gambling harm reduction measures, disclosing the probabilities of obtaining loot box rewards is a consumer protection measure that may reduce overspending. Presently, this has been adopted as law only in China, where a 95.6% disclosure rate was previously observed. In other countries, the industry has generally adopted this measure as self-regulation. This study assessed the compliance rate of self-regulation amongst the 100 highest-grossing UK iPhone games to be 64.0%, significantly lower than that of Chinese legal regulation. Additionally, only 6.7% of games containing first-party implemented loot boxes made reasonably prominent disclosures. Non-enforced Western self-regulation needs substantial improvements before it can be as effective as legal regulation: until then, uniform and prominent disclosures should be required by law to maximise their consumer protection benefits.

Date: 2021-09-29
New Economics Papers: this item is included in nep-law and nep-reg
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Persistent link: https://EconPapers.repec.org/RePEc:osf:osfxxx:g5wd9

DOI: 10.31219/osf.io/g5wd9

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