Is your app monetization in jeopardy?
A new App Store lawsuit claims that apps with loot boxes and similar randomized digital rewards are considered gambling. While there has been debate over loot boxes before, a lawsuit against Apple could impact App Store Optimization for developers across the store.
The App Store and Google Play Store have app guidelines regarding the usage of randomized virtual items, such as loot boxes. Apps on these stores must disclose the odds of receiving certain items, such as rare characters or equipment.
If an app contains in-app purchases, it will also say so on the store listing.
Apple’s policy states:
“Apps offering “loot boxes” or other mechanisms that provide randomized virtual items for purchase must disclose the odds of receiving each type of item to customers prior to purchase.”
The lawsuit against Apple, filed by the Law Offices of Andrew J Brown, acknowledges the guideline but asserts that it is an “implicit concession” that the loot boxes are a form of gambling that Apple profits from.
Developers need to ensure they’re following all the store guidelines when submitting their apps. Failure to comply can result in the app being rejected or removed from the store, which can have a significant impact on App Store Optimization.
Adaptation is important for apps to grow when the stores change. If, for example, the guidelines change so that developers must provide additional information about in-app purchases in their listings, developers can use it as part of their ASO.
For instance, if there’s an event with an increased chance of getting a valuable item, developers can use the promotional text to highlight it.
The lawsuit, filed in the U.S. District Court for the Northern District of California, alleges that allowing developers to market apps with loot boxes is promoting gambling and addictive behavior.
According to the lawsuit:
“A large percentage of Apple’s revenues from App Store games come from the in-game purchases of what are known in the gaming industry as ‘loot boxes’ or ‘loot crates.’ Dozens (if not hundreds) of App Store games rely on some form of Loot Box or similar gambling mechanism to generate billions of dollars, much of it from kids.”
The fact that age ratings are determined by the app developer is also noted as a cause for concern. Apps with loot boxes and similar purchases can be marketed towards children.
In 2019, a proposed bill targeted apps and mobile games selling loot boxes. While the bill has not been discussed or voted on since its referral to the Committee on Commerce, Science, and Transportation, loot boxes remain a hot subject.
The App Store does have apps featuring casino-style games, but those are marketed differently than mobile games. The lawsuit alleges:
“Loot Boxes have all the hallmarks of a Las Vegas-style slot machine, including the psychological aspects to encourage and create addiction – especially among adolescents. Moreover, under California law they constitute illegal ‘slot machines or devices’ when played on an iPhone, iPad, or other similar device.”
It is worth noting that Apple and Google have strict guidelines for casino apps. Developers of such apps must be very careful in how they design the functionality and market the app through their descriptions and creatives to make it clear that users are not gambling for monetary prizes.
The new lawsuit has the potential to impact how apps with in-app purchases such as loot boxes or gacha systems are sold and marketed. Developers of such apps should keep an eye on its progress and prepare to adjust their apps as needed, depending on the outcome.
This may require adjusting the app listings with additional legal text, adjusting the age rating or even revamping their monetization strategy to stay in-line with changing regulations. No matter what the result may be, keeping up with the latest developments helps ensure your app will remain optimized.
Want more information regarding App Store Optimization? Contact Gummicube and we’ll help get your strategy started.
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