Mobile gaming, while hailed as a burgeoning passion and a major contributor to global gaming revenue, has been shadowed by growing concerns of predatory practices. Regulatory bodies worldwide are now intensifying their scrutiny, aiming to curb the allegedly unlawful tactics employed by game creators and distributors.

For many, mobile gaming is a burgeoning passion and a relaxing way to unwind, offering evolved methods of entertainment and developing into a billion-dollar industry. However, a tide is changing in the gaming horizon as regulators are setting their sights on tracing and controlling potentially unlawful practices by certain game creators and distributors, eliciting significant concerns about consumers’ protection and retention.

The rising cases of predatory behaviors in the mobile gaming industry have caught the attention of regulatory bodies world over. With allegations ranging from undisclosed ‘loot boxes’ to hidden marketing tactics aimed at exploiting vulnerable populations, the probe is intensifying. Proponents of stricter regulations insist that the initiative was long due for an industry that reportedly garners more than 50% of the global gaming revenue.

One such incident that sparked the regulators’ interest was rooted in Belgium when the Belgian Gaming Commission (BGC) declared the loot box system in certain games as a form of gambling. These ‘loot boxes,’ essentially a virtual grab-bag filled with randomized digital rewards, have been under regulatory scrutiny for their resemblance to the random rewards structure of gambling. Implemented by many game developers, the system requires the players to either play for extended hours or pay actual money to receive these virtual rewards.

Following the Belgian verdict, several other European countries, including the Netherlands, issued similar rulings, fueling an intense debate about the necessity and method of regulation for such practices. The US Federal Trade Commission (FTC) soon jumped into the fray announcing that it was investigating these loot box systems and exploring measures for consumer protection.

It is also worth noting that these regulatory concerns are not confined to the West. In South Korea, for instance, game developers and publishers are now mandated to reveal the odds of receiving specific items from loot boxes to be allowed to continue their businesses. Meanwhile, in China, the Chinese government introduced stringent regulations, requiring game developers to limit the screen time to 3 hours per week for minors.

How game publishers and developers are encouraged to monetize their games also raises concerns. The prevailing freemium business model, where gamers can download games for free but are enticed to make in-app purchases for an upgraded user experience, has become a subject of the regulators’ scrutiny. Critics assert that these apps strategically employ tactics that compel users to spend. These tactics can range from displaying a constant barrage of purchase prompts to increasing game difficulty levels compelling users to buy additional features.

Evidence of such exploitative strategies was notably presented in a paper published in the journal ‘Addictive Behaviors’ suggesting that some mobile games were designed to create a form of psychological dependency, compelling the users to make in-app purchases. The authors underpinned that these practices closely mirrored uncontrolled gambling, reinforcing the need for regulation.

In light of these concerns, the digital storefronts for these games, like Google Play Store and Apple App Store, have also found themselves under regulatory radar. Both stores have begun requesting game developers to explicitly mention in-app purchase and loot box odds in their app descriptions, giving users an informed choice before download.

Response from the mobile gaming industry to these proposed regulations has been understandably mixed. Some developers have strongly resisted, arguing that if done right, both loot boxes and in-app purchases can add to players’ experience rather than detract from it.

While talks and movements toward stricter regulations are escalating, one question is yet to be answered: what will tighter policy mean for industry revenues and by extension, for game developers and their creations? While a chunk of the industry believes regulation could potentially stifle innovation, many maintain that community trust and loyalty, nourished by fair practices and transparency, will offer a better, more sustainable boost to the industry.

As the battle between regulator and engineer continues to wage, one mobile game player’s comment might best sum it up: “If the price for better regulation is a few less games being mass-produced, then surely, that’s a sacrifice we could live with.”

– Belgian Gaming Commission, 2019.
– Federal Trade Commission reports, 2020.
– ‘Addictive Behaviors’, Mobile gaming and pathological gambling, 2020.
– App Store Review Guidelines, Apple Inc., 2021.
– Regulation on online/mobile games for juveniles, Chinese Government, 2021.

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