Current loot box warnings are ineffective for informing consumers

Drummond, Aaron; Lowe-Calverley, Emily; Sauer, James D.

doi:10.1016/j.chb.2022.107534

Cited by 18 publications

(20 citation statements)

References 32 publications

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“…Criticisms of the ESRB, PEGI and IARC label of ‘In-Game Purchases (Includes Random Items)’ have already been made both theoretically after a plain reading of the text [ 23 ] and empirically under experimental conditions [ 31 ]. It does not provide enough information to help consumers to identify exactly where the loot boxes can be found in the game, such that consumers might be enabled to recognize them and choose to not engage with them or to prevent their children from engaging with them ([ 23 ], pp.…”

Section: Discussionmentioning

confidence: 99%

“…a clenched fist to show ‘Violence’); however, the loot box presence warning label only appears in plain text and is less visually prominent than other content descriptors, thus arguably suggesting that it is less concerning than other issues ( figure 2 ). Further, under experimental conditions, ‘consumers do not appear to understand the ESRB/PEGI loot box warning’, ([ 31 ], p. 1) possibly due to the label's use of newly coined terminology: ‘Random Items’ or ‘Paid Random Items’ (which PEGI has since abandoned) were artificially invented as they were not used colloquially to refer to loot boxes and similar mechanics prior to the labels being introduced, and these terms do not appear to have been adopted by player communities and the wider public discourse. Finally, these warnings do not need to be attached (and therefore can be circumvented) if the game offers no digital loot boxes but instead offers physical packs of random cards for sale that do have digital functionality within the game that allows the physical card packs to effectively act like loot boxes, as was the case with packs of randomized amiibo cards intended for use in Animal Crossing: New Horizons (Nintendo, 2020) ([ 23 ], p. 2359; [ 84 ], pp.…”

Section: Discussionmentioning

confidence: 99%

“…An improvement might be to specifically describe the loot box mechanics to help players actively avoid them and to provide a choice in the options menu to turn the ability to purchase loot boxes on or off (potentially even with the default option set to ‘off’). Through experimental studies, Garrett et al have concluded that these labels fail to adequately warn consumers about the potential risks involved with loot boxes and therefore ‘fail to adequately inform consumer spending decisions’ [ 31 ].…”

Section: Introductionmentioning

confidence: 99%

“…The present series of two studies did not seek to assess the efficacy of the loot box self-regulatory labels on consumer behaviour (see [ 31 ]) and instead sought to assess (i) whether the ESRB and PEGI have consistently applied the loot box self-regulatory warning label and (ii) whether companies have complied with this self-regulation by accurately labelling games containing loot boxes with the relevant notice.…”

Section: Introductionmentioning

confidence: 99%

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Beneath the label: unsatisfactory compliance with ESRB, PEGI and IARC industry self-regulation requiring loot box presence warning labels by video game companies

Xiao

2023

R. Soc. open sci.

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Loot boxes in video games are a form of in-game transactions with randomized elements. Concerns have been raised about loot boxes' similarities with gambling and their potential harms (e.g. overspending). Recognizing players' and parents' concerns, in mid-2020, the Entertainment Software Rating Board (ESRB) and PEGI (Pan-European Game Information) announced that games containing loot boxes or any forms of in-game transactions with randomized elements will be marked by a new label stating ‘In-Game Purchases (Includes Random Items)’. The same label has also been adopted by the International Age Rating Coalition (IARC) and thereby assigned to games available on digital storefronts, e.g. the Google Play Store. The label is intended to provide more information to consumers and allow them to make more informed purchasing decisions. This measure is not legally binding and has been adopted as industry self-regulation or corporate social responsibility. Previous research has suggested that industry self-regulation might not be effectively complied with due to conflicting commercial interests. Compliance with the ESRB's, PEGI's and IARC's loot box presence warning label was assessed in two studies. The first study found that 60.6% of all games labelled by either the ESRB or PEGI (or 16.1% using a more equitable methodology) were not labelled by the other. The majority of the inconsistencies were caused by the ESRB refusing to apply the measure retroactively. Five instances where one age rating organization culpably failed to accurately identify loot box presence were identified (although only two cases were admitted by the relevant organization). Generally, with newly released games, consumers can rely on the PEGI and ESRB labels. PEGI has retroactively labelled many older games, meaning that consumers can expect the labelling to be accurate. However, due to the ESRB's policies (which it has refused to improve), North American consumers cannot rely on the label for many older games containing loot boxes, unlike their European counterparts. The data suggest that the loot box issue is far more pressing on mobile platforms than console/PC platforms. The second study found that 71.0% of popular games containing loot boxes on the Google Play Store (whose age rating system is regulated through IARC) did not display the label and were therefore non-compliant. The IARC's current policy on the Google Play Store is that only games submitted for rating after February 2022 are required to be labelled. This policy (which the IARC has refused to improve) means that most popular and high-grossing games can be, and presently are, marketed without the label, thus significantly reducing the measure's scope and potential benefit. The Apple App Store still does not allow loot box presence to be disclosed. At present, consumers and parents cannot rely on this self-regulatory measure to provide accurate information as to loot box presence for mobile games. Due to their immense scale, the mobile markets pose regulatory and enforcement challenges that PEGI admits are not yet resolved. The mere existence of this measure cannot be used to justify the non-regulation of loot boxes by governments, given the poor compliance and doubtful efficacy (even if when complied with satisfactorily). Improvements to the existing age rating systems are proposed. Preregistered Stage 1 protocol: https://doi.org/10.17605/OSF.IO/E6QBM (date of in-principle acceptance: 12 January 2023).

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Section: Discussionmentioning

confidence: 99%

Section: Discussionmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

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Beneath the label: unsatisfactory compliance with ESRB, PEGI and IARC industry self-regulation requiring loot box presence warning labels by video game companies

Xiao

2023

R. Soc. open sci.

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“…In addition, age rating organisations have introduced a warning label ('In-Game Purchases (Includes Random Items)') to denote games containing loot boxes and began assigning this to games from April 2020 [34][35][36][37][38] . This industry self-regulation has technically not been formally introduced to the Steam platform as it is not a participating storefront of the International Age Rating Coalition (IARC), which is responsible for assigning the label to digitally released games [39] .…”

Section: Introductionmentioning

confidence: 99%

Illegal video game loot boxes with transferable content on Steam: a longitudinal study on their presence and non-compliance with and non-enforcement of gambling law

Xiao¹

2023

Preprint

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Loot boxes are gambling-like mechanics in video games that can be bought with real-world money in exchange for random rewards. Regulators in many countries have considered whether various implementations of loot boxes fall within the existing legal definition of ‘gambling.’ In short, most countries’ regulators are of the view that only loot boxes that (i) players spent real-world money to purchase and (ii) provide random content that possesses real-world monetary value (e.g., be transferable between players) legally constitute ‘gambling.’ This type of loot box is known to exist; however, no enforcement actions have been brought. The present study comprehensively reviewed Valve’s Steam platform for PC games and identified 35 games that implement loot boxes with transferable content worth real-world money. Some of these loot boxes are implemented in the most popular PC games with hundreds of thousands of concurrent players. The Steam platform was also found to implement a ‘meta’ trading card system that operated similarly. These 36 examples would fall afoul of current gambling law in many countries as interpreted by their respective regulators, although some cases where the companies avowedly do not directly sell loot boxes to players (and only provide them for players to sell between each other) might arguably escape enforcement in some, but not all, jurisdictions. Consumers, policymakers, and other stakeholders should be aware of the existence and popularity of these likely illegal loot boxes and how gambling law has not been enforced against them, despite previous statements made by gambling regulators.

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Loot box purchasing and indebtedness: The role of psychosocial factors and problem gambling

Sirola,

Nyrhinen,

Nuckols

et al. 2023

Addictive Behaviors Reports

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Current loot box warnings are ineffective for informing consumers

Cited by 18 publications

References 32 publications

Beneath the label: unsatisfactory compliance with ESRB, PEGI and IARC industry self-regulation requiring loot box presence warning labels by video game companies

Beneath the label: unsatisfactory compliance with ESRB, PEGI and IARC industry self-regulation requiring loot box presence warning labels by video game companies

Illegal video game loot boxes with transferable content on Steam: a longitudinal study on their presence and non-compliance with and non-enforcement of gambling law

Loot box purchasing and indebtedness: The role of psychosocial factors and problem gambling

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