China's New Game Freeze Could Impact Loot Box Regulation

If you've been following gaming industry sites over the past week, you've probably heard about what's going on in China -- or, more specifically, what's not going on there. The country pulled Monster Hunter: World from sale and, more unusually, China's Ministry of Culture apparently hasn't approved any games for digital sales since March 28.

The official reasoning behind MHW's removal was a "large number of complaints" regarding the game, but some analysts think that there's some "bureaucratic infighting" going on behind the scenes between the various regulatory bodies that's hitting MHW and every other potential new release in China. It may not just be the usual cultural differences that are causing the issues, but rather a socio-economic one: loot boxes.

The Bloomberg article linked above mentions that the holdup might be due to Chinese regulators "step[ping] up scrutiny on online gambling and gaming addiction." GI.biz's Rob Fahey speculates even further on the link between China's actions and loot boxes, and it's not an absurd notion. China was one of the first countries to start clamping down on loot box practices, well before the whole Star Wars: Battlefront II fiasco that made headlines in the West. As Fahey notes, as big a market as China is, severe restrictions or outright banning of loot boxes there would have a huge impact on the global game economy, forcing developers to either find alternate monetization plans for their games, especially free-to-play ones. There's also this possibility:

"One option this would put on the table, which many consumers in other markets might find unpalatable, is the prospect of parallel development of games with and without loot-box mechanisms or other free-to-play monetisation systems."

If the Chinese government is basically willing to gut the video game industry within its borders to the point that even Monster Hunter: World publisher Tencent can't make headway, you would think that loopholes, like the one Valve is exploiting for Dota 2 in Belgium, would also get shut down. Interesting times are ahead.