User Response to Legal Intervention and The Efficacy of Industry Self-Regulation Regarding Digital Assets: Evidence from Genshin Impact

Abstract

Digital worlds have an increasing impact in the everyday lives of people around the globe, with online games acting as a vehicle for socialization, recreation, and even livelihood as individuals operate through their virtual avatars. Within these online games, the presence of loot boxes has seen increasing use as a monetization system, whether merely incidental or completely integrated into the gameplay structure. As more individuals play online games and the revenue of the video game industry increases, the problems associated with loot boxes have an increasingly outsized impact on users. Due to their chance-based nature and their design to cause addiction, legal scrutiny should be placed on the use of loot boxes as a result of their ease of access to vulnerable populations such as minors, scrutiny which has not translated into regulation in the United States. This dissertation will study loot boxes in an integrated gacha game, Genshin Impact, through a survey targeted towards the games most invested players. It will focus on three distinct areas: the rationality and responsiveness of player behavior, the response of players to different taxation schemes, and the sentiment of players towards regulation. All questions are framed in the context of the game to ensure optimal applicability and accuracy of responses, a novel approach in the literature which typically focuses on broad and general studies. The results of the study will provide evidence for the proper treatment and regulation of loot boxes in a broader context.