Better than Industry Self-Regulation: Compliance of Mobile Games with Newly Adopted and Actively Enforced Loot Box Probability Disclosure Law in South Korea

Loot boxes are gambling-like products inside video games that players can purchase with real-world money to obtain random rewards. Stakeholders (e.g., players, parents, and policymakers) are concerned about their potential harms, e.g., overspending and normalizing gambling. Recognizing that previous industry self-regulation has failed to solve the problem, South Korea started requiring companies to disclose the probabilities of getting different loot box rewards by law from March 2024 onwards. Content analysis found that 90 of the 100 highest-grossing iPhone games contained paid loot boxes, but only 84.4% of them disclosed probabilities, meaning that compliance was still not perfect. Further, the accessibility and visual prominence of most disclosures could be improved. A South Korean regulator is actively monitoring games for compliance, including processing player complaints, and taking enforcement actions against non-compliant companies. Other countries still solely relying on industry self-regulation should consider adopting actively enforced legal regulation instead to improve consumer protection.