# Better than industry self-regulation: Compliance of mobile games with newly adopted and actively enforced loot box probability disclosure law in South Korea

## TL;DR

South Korea's new law requiring loot box probability disclosure in mobile games has improved compliance, but some issues remain.

## Contribution

The study evaluates compliance with South Korea's loot box probability disclosure law and suggests evidence-based policy improvements.

## Key findings

- 90 of the 100 highest-grossing iPhone games had paid loot boxes, but only 84.4% disclosed probabilities.
- South Korean regulators are actively enforcing the law and fining non-compliant companies.
- Compliance is not perfect, and the accessibility and prominence of disclosures need improvement.

## Abstract

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 those games disclosed probabilities, meaning that compliance was still not perfect. The accessibility and visual prominence of most disclosures should also be improved. South Korean regulators are actively monitoring games for compliance, including processing player complaints, and taking enforcement actions against non-compliant companies. Several companies have been fined for illegally publishing false or misleading probabilities. Other countries still solely relying on industry self-regulation should consider adopting actively enforced legal regulation instead to improve consumer protection. Behavioral addiction-related policymaking should be evidence-based. Although novel measures could justifiably be adopted based on the precautionary principle despite a lack of scientific evidence, post-implementation research on the measure's uptake and effectiveness must be conducted. Such evidence can improve policy design (including the repeal of ineffective policies) and advise other countries. Policies should be accompanied with earmarked funding for independent research assessing their efficacy; companies should be legally required to provide data; and policymakers should work with researchers before implementation to conduct longitudinal research following open science principles.