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What are the odds? Poor compliance with UK loot box probability disclosure industry self-regulation

Author

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  • Xiao, Leon Y.

    (IT University of Copenhagen)

  • Henderson, Laura L.
  • Newall, Philip

    (University of Warwick)

Abstract

Loot boxes are purchased in video games to obtain randomised rewards of varying value and are thus psychologically akin to gambling. Disclosing the probabilities of obtaining loot box rewards may reduce overspending, in a similar vein to related disclosure approaches in gambling. Presently, this consumer protection measure has been adopted as law only in the People’s Republic of China (PRC). In other countries, the videogaming industry has generally adopted this measure as self-regulation. However, self-regulation conflicts with commercial interests and might not maximally promote public welfare. The loot box prevalence rate amongst the 100 highest-grossing UK iPhone games was 77% in mid-2021. The compliance rate with probability disclosure industry self-regulation was only 64.0%, significantly lower than that of PRC legal regulation (95.6%). In addition, UK games generally made insufficiently prominent and difficult-to-access disclosures both in-game and on the game’s official website. Significantly fewer UK games disclosed probabilities on their official websites (21.3%) when compared to 72.5% of PRC games. Only one of 75 UK games (1.3%) adopted the most prominent disclosure format of automatically displaying the probabilities on the in-game purchase page. Policymakers should demand more accountable forms of industry self-regulation or impose direct legal regulation to ensure consumer protection.

Suggested Citation

  • Xiao, Leon Y. & Henderson, Laura L. & Newall, Philip, 2021. "What are the odds? Poor compliance with UK loot box probability disclosure industry self-regulation," OSF Preprints g5wd9_v1, Center for Open Science.
    • Handle: RePEc:osf:osfxxx:g5wd9_v1
    DOI: 10.31219/osf.io/g5wd9_v1
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