Leon Y. Xiao

Leon Y. Xiao is a Lord Denning Scholar at The Honourable Society of Lincoln’s Inn studying to become a barrister at The City Law School, City, University of London. Leon is a first class LLB graduate from Durham Law School, Durham University. Leon was employed as an in-house legal counsel intern by Cheetah Mobile (NYSE:CMCM) from July to August 2019 and advised on video game-related legal issues. Leon researches the regulation of randomised monetisation methods (loot boxes) in video games and ethical game design which improve consumer protection using legal and ludology (game studies) perspectives.

Loot box prevalence and video game companies’ interpretations of loot box probability disclosure regulations in the People’s Republic of China

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 companies to disclose the probabilities of obtaining loot box rewards. This study assesses the prevalence of loot boxes in PRC games and companies’ interpretations of disclosure regulations.

Survey of the 100 highest-grossing iPhone games on the Apple App Store in the PRC recorded whether each game contained loot boxes. Loot box probability disclosures were then searched for in-game and on the game’s official website, and features of found probability disclosures were recorded.

91% of games included at least one loot box. For games with loot boxes, disclosure statements could not be found for 4.4%; website-only disclosures were found for 38.5%; in-game-only disclosures were found for 23.1%; and disclosures were found at both locations for 34.1%. Five distinct forms of website disclosures and six forms of in-game disclosures were identified. 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. Loot box probability disclosures are implemented through various means, with only a minority of games choosing reasonably prominent disclosure formats. We recommend that regulations should delineate requirements as to the prominent and uniform placement of disclosures. Our response to a call for evidence by the UK Government will disseminate our recommendation.

Poster link: