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Research finds popular games skirt Chinese loot box disclosure laws

New academic paper details ways publishers hide required consumer protection information, likens behavior to that seen in alcohol, gambling, and tobacco industries

China has required game developers to disclose loot box odds to players since 2017, but a new paper published in the journal Behavioral Public Policy has found that many publishers aren't obeying the spirit of the law, or sometimes even the letter of it.

The researchers looked at the loot box mechanics within the 100 highest-grossing iPhone games in China to see how they were making disclosures. Many of the games studied included multiple types of loot boxes, with one --Yu Long Zai Tian Mobile Game Operations Team -- containing more than 400.

91% of the games featured loot box mechanics. Of those, 21 (23%) gave odds disclosures only in the game, 23 (39%) put odds on the website alone, and 34% put them in both locations. Researchers couldn't locate odds disclosures in either place for four games (4%).

Just five games (less than 10% of those with in-game disclosures) displayed odds to customers automatically. Most of the in-game disclosures were hidden behind a generic symbol like an exclamation or question mark. One game required users to go to settings, contact customer support, and then ask the chat bot about "probabilities" in English to receive odds. (Entering the Chinese characters for probabilities wouldn't work.)

As for website disclosures, 52 games (79% of those making website disclosures) put them in a news post which was displayed chronologically alongside other notices, while only six (9%) had links directly from the homepage. Five games had odds disclosures that could not be reached from the home page, and either had to be found using a search engine or through a link posted somewhere in the game itself.

The researchers described a number of ways companies went out of their way to make loot box odds harder to find.

"One game required the player to tap on multiple hyperlinks, visit multiple pages, and scroll extensively before making the disclosure viewable," they said. "Another game's disclosure text formatting was especially difficult to read, as it did not contain line breaks where appropriate.

"A third game's disclosure was displayed using images, rather than typed text, which rendered the disclosure not searchable using the internet browser's find command. A fourth game's probability disclosures for different types of loot boxes contained in the game were displayed on different webpages, rather than compiled together on one single webpage."

The report notes that China's loot box law gives latitude to developers to disclose odds either within the game or on an official website, but does not give requirements as to how prominent they need to be, how to word them, or even how to calculate probabilities and communicate them to users.

The authors suggest the laws would be far more effective if China enforced uniform standards for disclosures.

"For in-game disclosures, this study's proposed uniform disclosure format is to always automatically display a concise (possibly abbreviated) and simple to understand disclosure on the loot box's purchase page, much like the standardized nutrition labels on food," they said.

"Additionally, a visually prominent, industry-standard button marked with 'detailed probability disclosures,' which when pressed would redirect the player to a different screen with an unabbreviated, detailed breakdown of probabilities, should also be required."

For website disclosures, they propose a link to the odds on every page of the site, with an industry-standard loot box odds button situated in the top-right corner of any site for a game with loot boxes.

"The actions of some video game companies do at least seem to draw parallels with the arguably socially irresponsible corporate actions in other, more established addictive areas," the researchers conclude.

"For example, the alcohol, gambling, and tobacco industries have all taken various actions that likely reduce the effectiveness of their product warnings."

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