scholarly journals Drafting Video Game Loot Box Regulation for Dummies: A Chinese Lesson

2021 ◽  
Author(s):  
Leon Y. Xiao
Keyword(s):  
Video Games ◽  
Problem Gambling ◽  
Consumer Protection ◽  
Video Game ◽  
People’S Republic Of China ◽  
People's Republic Of China ◽  
Republic Of China ◽  
Western Countries ◽  
Vulnerable Consumers

Loot boxes are virtual items in video games that players purchase to obtain randomised rewards of varying value. Such randomised monetisation methods are prevalently implemented globally. Loot boxes are conceptually and structurally akin to gambling, and their purchase is positively correlated with problem gambling in Western countries. Given the potential harms loot boxes may cause, particularly to vulnerable consumers, e.g., children, regulators and policymakers are paying increasing attention. Some countries, e.g., Belgium, have actively enforced existing gambling laws to ban certain loot box implementations. However, less restrictive regulatory approaches, e.g., requiring probability disclosures, are also being considered. Amendments to existing law and new laws dedicated to regulating loot boxes are likely forthcoming in many countries. Companies’ discretionary and suboptimal compliance with loot box probability disclosure law in the People’s Republic of China reveals how future loot box laws and industry self-regulations should be better drafted to ensure maximum consumer protection.

scholarly journals Gaming the system: legally-required loot box probability disclosures in video games in China are implemented sub-optimally

2020 ◽  
Author(s):  
Leon Y. Xiao ◽  
Laura L. Henderson ◽  
Yuhan Yang ◽  
Philip Warren Stirling Newall
Keyword(s):  
Video Games ◽  
Video Game ◽  
Self Regulation ◽  
Legal Regulation ◽  
People’S Republic Of China ◽  
Disordered Gambling ◽  
People's Republic Of China ◽  
Disclosure Regulation ◽  
Republic Of China

Paid loot boxes provide randomised rewards in video games; their use is linked to disordered gambling and they are present in approximately half of UK video games. The relative novelty of loot boxes means that regulators and policymakers in various jurisdictions are still deciding how to regulate them. The People’s Republic of China (PRC) is the first and only jurisdiction to legally require video game companies to disclose the probabilities of obtaining randomised loot box rewards—an approach that is also favoured by the video games industry as self-regulation. This study is the first to assess loot box prevalence in the PRC and video game companies’ discretionary interpretations of the probability disclosure regulation. Loot boxes were found in 91 of the 100 most-popular PRC iPhone games, and 90.5% of games deemed suitable for children aged 12+ contained loot boxes. For games containing loot boxes, disclosure statements could not be found for 4.4% of games. Loot box probability disclosures were implemented through various means, but only five games used the most prominent disclosure format. Legal regulation and/or self-regulation of loot box probability disclosures should require uniform and prominent disclosures to best help inform consumers.

scholarly journals Gaming the system: suboptimal compliance with loot box probability disclosure regulations in China

2021 ◽  
pp. 1-27
Author(s):  
Leon Y. Xiao ◽  
Laura L. Henderson ◽  
Yuhan Yang ◽  
Philip W. S. Newall
Keyword(s):  
Video Games ◽  
Self Regulation ◽  
People’S Republic Of China ◽  
Disordered Gambling ◽  
People's Republic Of China ◽  
Republic Of China

Abstract Loot boxes provide randomized rewards in video games; their purchase is linked to disordered gambling and they are present in approximately half of UK video games. The relative novelty of loot boxes means that regulators and policymakers in various jurisdictions are still deciding how to regulate them. The People's Republic of China (PRC) is the first, and presently only, jurisdiction to legally require companies to disclose the probabilities of obtaining randomized loot box rewards – an approach that is also favored by the industry as self-regulation. This study is the first to assess paid loot box prevalence in the PRC and companies’ discretionary interpretations of probability disclosure regulations. Loot boxes were found in 91 of the 100 highest-grossing PRC iPhone games. Of games deemed suitable for children aged 12+, 90.5% contained loot boxes. Probability disclosures could not be found for 4.4% of games containing loot boxes. Disclosures were implemented through various methods both in-game and on the games’ official websites; however, consistent with the concept of ‘sludge,’ only 5.5% used the most prominent format of automatically displaying the probabilities on the in-game loot box purchase page. Loot box probability disclosures should be uniform and visually prominent to best help inform consumers.

scholarly journals Opening Pandora’s loot box: Novel links with gambling, and player opinions on probability disclosures and pity-timers in China

2021 ◽  
Author(s):  
Leon Y. Xiao ◽  
Tullia C. Fraser ◽  
Philip Warren Stirling Newall
Keyword(s):  
Video Games ◽  
Consumer Protection ◽  
Video Game ◽  
Protection Measures ◽  
Cultural Contexts ◽  
Republic Of China ◽  
Methodological Choices ◽  
Gambling Participation ◽  
Low Levels ◽  
Positive Correlations

Loot boxes are quasi-gambling virtual products in video games that provide randomised rewards of varying value. Previous studies in Western contexts have identified a positive correlation between loot box purchasing and problem gambling. A preregistered survey of People’s Republic of China (PRC) video game players (N=879) largely failed to replicate this correlation, possibly due to low levels of gambling participation (n=87). Statistically significant but modest positive correlations between loot box expenditure and past-year gambling participation, and between loot box expenditure and impulsiveness, were found. Most loot box purchasers (84.6%) reported seeing loot box probability disclosures which the PRC legally requires, but only 19.3% of this group reported consequently spending less money. Most loot box purchasers (86.9%) thought that pity-timers, which increase the winning probabilities of obtaining rarer rewards, are appropriate for implementation. Future loot box research should give greater consideration to cultural contexts, methodological choices, and novel consumer protection measures.

scholarly journals People’s Republic of China Legal Update: Supreme People’s Court’s Guiding Opinion on Refund Requests Relating to Unauthorised Online Video Gaming Transactions Paid for by Minors (Published 15 May 2020)

2020 ◽  
Author(s):  
Leon Y. Xiao
Keyword(s):  
Video Game ◽  
Service Providers ◽  
People’S Republic Of China ◽  
Video Gaming ◽  
Online Video ◽  
People's Republic Of China ◽  
Internet Service ◽  
Republic Of China ◽  
Novel Coronavirus ◽  
Online Video Games

The Supreme People’s Court (SPC) of the People’s Republic of China (PRC) promulgated its Guiding Opinion on Several Issues Concerning the Lawful and Proper Handling of Civil Cases Involving the Novel Coronavirus Pneumonia (COVID-19) Epidemic No. 2 (hereinafter, the ‘Guiding Opinion’) on 15 May 2020. Paragraph 9 of the Guiding Opinion declares that: ‘If a person with “limited capacity for civil conduct,” without the consent of their guardian, engages with paid online video games [e.g., purchases a video game software or makes in-game purchases through microtransactions], or “donates” to content creators or makes other similar payments on livestreaming platforms, to such a sum which is “incompatible with their age and intellectual abilities,” the courts shall support claims from their guardians demanding refund from the internet service providers [e.g., the game company or the livestreaming platform] for such payments.’

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