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A Closer Look at China's "Loot Box Law"


China recently implemented new laws requiring video games to disclose the drop rate of items in any kind of loot crate/box/pack sold by the game (for example, DotA, Overwatch, Counter-Strike, etc.), and while most companies complied, Blizzard has been somewhat reluctant to give out their algorithms. Instead of probabilities for each box, or even for each item, they gave out probabilities for when you might receive an item in a given number of boxes. Now, however, they've found a way to get around the law entirely. Most recently, for Hearthstone: instead of buying packs of cards, players buy dust which can be used to craft cards they want, and as a "bonus", they also get card packs. In this way, players are not technically buying card packs, and Blizzard doesn't have to technically release statistics on them. They implemented a similar system for Overwatch at the beginning of June, where players can buy in-game currency (which can then be used to buy certain cosmetic items) and receive loot crates as a bonus.

"Cards" has been replaced with "Dust"


The law Blizzard is trying to circumvent states:

(6) Online game publishers that adopt random draw system as a means of providing virtual props or value added services shall not require users to directly input legal tender or use invented online game currency in order to participate. Online game operators should promptly display the name, performance/function, content, quantity and draw/forge probability of all virtual props and value-added services that can be drawn/forged on the official website of the game or on the random draw promotion page. Public information on the random draw should be true and valid.

(7) Online game publishers should publish the results of participating users' random draw results in a prominent place on the game's website or in the game itself, and save the relevant records for no less than 90 days for the inquiry of relevant departments. When publishing results of random draws, action to protect user privacy must be taken.

The reason for the law in the first place is to curb the "gambling" that loot crates embody. You pay a certain amount of money with the hopes of a payout, and sometimes you hit the jackpot with something extremely rare, but usually you don't. Some people might continue buying until they get, or "win", what they want. The parallel has been made to slot machines countless of times, and the CounterStrike scandal of streamers falsely winning extremely rare items in a rigged lottery has only exacerbated the sinister feeling loot crates give to people like parents and lawmakers. When the law was put into effect on May 1, many gamers rejoiced that at least one country was taking the issue seriously, even if the odds published for Chinese clients might not be the same for those abroad.

Considering China's focus on protecting children from video game addiction, providing gamers with the probabilities for the items they want is just another step in that endeavor. Laws already in place show that this particular law was really only a formality-- the nonexistence of loot crate probabilities was making it a form of gambling, or at the very least "speculation", which is one point looked at by government video game reviewers (The game may not offer gambling or gambling-related functions; there should be no lottery or speculation in the game).

Furthermore, the Interim Measures for the Administration of Online Games, Article 4, makes clear (emphasis mine):

Entities engaging in online game business operations shall abide by the Constitution, laws and administrative regulations, give priority to social benefits and protection of the minors, carry forward thoughts, cultures and ethics embodying developments in the current era and social advancement, follow the principles of protection of public health and moderate game play, safeguard the legitimate rights and interests of online game users pursuant to law, and promote the overall development of a person as well as social harmony.

As the video game industry continues to grow in China, both the government and parents worry about its potential negative effects on people, especially children. Video game addiction, while not as widespread as some might fear, is a genuine concern and is already commonly linked to gambling. In fact, most tests for video game addiction use adapted versions of tests for pathological gambling from the DSM-IV. Therefore, bringing gaming closer to an actual type of gambling presents issues for people who might be pre-disposed to pathological behavior, the people that care about them, and the people who care about games and want to see them rise above negative stereotypes. As games continue to adopt micro-transaction models, this problem will continue to dog developers and consumers alike.

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