A recent study conducted by legal expert and lockbox researcher Leon Y. Xiao has been completed and it finds that lockbox disclosures in social media ads for games with the monetization scheme are extremely low – a discovery that could have wider implications for game companies in terms of EU and UK regulation.
Illegal loot box advertising on social media: an empirical study using the Meta and TikTok ad transparency repositories shared data from ad libraries of Facebook, Instagram, Messenger, and TikTok, with the intent to answer four research questions about whether game ads noted the presence of lootboxes in their titles and how many impressions these ads made on users.
Xiao uncovered 188 ads for 63 different games known to have lockboxes or in-game purchases on Meta-owned platforms and 230 ads from similar games on TikTok, where he found that 11% of Meta’s ads gave proper notice that the game contained in-game purchases and just 7% noted that the game contained lockboxes. As for TikTok, only 7% of 100 ads disclosed the presence of lootboxes and nine out of 130 ads had labels that confirmed in-game purchases.
The study further found that the ads that did have labels were all from Electronic Arts games, but Xiao points out that those alerts were barely legible and ineffective, with tiny text that would require a video to be paused and zoomed in (a feature not available for TikTok videos) or a low resolution PEGI logo and content descriptor box that could be hard to read or blocked by platform UI elements.
As mentioned in the lede, this study isn’t just about whistleblowing but about pointing out how social media game ads very likely don’t meet standards imposed by regulators in the EU and UK that require game makers and publishers to properly disclose if a title has lockboxes or other in-game purchases. “When the mandatory disclosures are made so poorly […] it would be open to advertising and consumer protection regulators to opine that such disclosures, despite technically having been made, would nonetheless remain non-compliant with the disclosure requirements because they were made so ineffectively,” Xiao argues.
