Background
In recent years, user acquisition through paid traffic (“buying traffic”) has become an important means for game companies to attract players. Leading internet companies invest tens of billions of RMB annually in game user acquisition. This promotional model typically involves placing advertising materials on major social media platforms to capture the attention of potential users.
When browsing video platforms such as Douyin (TikTok) and Kuaishou (Kwai), online users frequently encounter a wide variety of game advertising materials. For example, casual puzzle games often rely on catchy slogans combined with demonstrations of gameplay to spark curiosity and encourage downloads. Martial arts or fantasy-themed games, on the other hand, commonly use promotional phrases such as “log in to receive free skills,” “premium weapons,” or “XXXXX in-game currency” to enhance the appeal of advertising materials.
Eye-catching and viral advertising creatives can effectively help game publishers attract more players and improve advertising performance. In particular, user acquisition for “money-making games” often promotes slogans such as “log in to receive cash rewards,” “easy money,” or “free withdrawals,” thereby enticing users to watch advertisements and convert into downloads.
However, when the content promoted in user acquisition materials differs from the actual in-game withdrawal mechanisms of such money-making games, this discrepancy may trigger player dissatisfaction and complaints, and may even lead to litigation. In some cases, administrative regulatory authorities may also intervene and conduct investigations.
Litigation Defense Strategies
Based on relevant judicial precedents, we summarize the following common scenarios and corresponding litigation defense strategies for game companies in similar cases.
(I) Scenarios Where Players Claim “Refund Plus Triple Compensation”
The legal basis for “refund plus triple compensation” lies in Article 55, Paragraph 1 of the Consumer Rights Protection Law of the People’s Republic of China (hereinafter the Consumer Protection Law), which provides that where a business operator commits fraud in providing goods or services, it shall, upon the consumer’s request, increase compensation for the losses suffered, with the increased compensation amount being three times the price paid for the goods or the service fees received.
1. Where players play games for profit-making purposes, the Consumer Protection Law does not apply
In Kan XX v. Zhejiang Zhengyou Network Technology Co., Ltd., a dispute over an online service contract (2021)Zhe0683MinChuNo.2001(2021) Zhe 0683 Min Chu No. 2001(2021)Zhe0683MinChuNo.2001, the court held that the scope of application of the Consumer Protection Law is limited to activities in which “consumers purchase or use goods or receive services for daily consumption needs.” Such “consumption” refers exclusively to daily life consumption.
Where a plaintiff recharges and plays a game purely for the purpose of earning profits, the Consumer Protection Law does not apply.
Accordingly, for money-making games that are completely free to download, register, log in, and use, and that do not involve any paid recharge services within the game, no transaction relationship is formed between the player and the game company, and the Consumer Protection Law does not apply.
2. Where players can verify the actual activity content merely by logging into the game, no fraud exists
Punitive damages may only be claimed where the operator has committed fraudulent conduct. Fraud refers to conduct whereby an operator, in providing goods or services, adopts false or other improper means to deceive or mislead consumers, thereby damaging consumers’ lawful rights and interests.
Fraud requires the simultaneous satisfaction of two elements:
(1) intentional provision of false information or intentional concealment of true information for the purpose of deception; and
(2) misleading or inducing the counterparty to make an erroneous expression of intent.
In the same Kan XX case, the court held that advertising slogans such as “start with 100 million in-game currency and VIP 18” or “receive red packets upon logging in” could be verified by players simply by logging into the game, and would not induce the plaintiff to recharge and thereby suffer losses.
Therefore, where a game is free to download and its core gameplay does not require payment, players who recharge to enhance character attributes or abilities are doing so to improve their own gaming experience. Where players claim that they downloaded a game based on slogans such as “log in to receive free skills / premium weapons / XXXXX in-game currency,” but can verify the authenticity of such promotions immediately upon logging in, subsequent recharges cannot be deemed erroneous expressions of intent caused by fraud.
Where a game is completely free to download, register, log in, and use, and contains no paid recharge services, no transaction relationship arises between the player and the game company. Where players can discern specific activity rules simply by logging in, courts generally do not find that the game company intentionally concealed material facts.
(II) Scenarios Where Players Seek to Rescind the Online Service Contract and Request Refunds
1. Game companies may rely on existing recharge and refund agreements as a defense
Currently, most game agreements explicitly contain recharge-related provisions, such as:
“You acknowledge and agree that once a recharge is successfully completed, it cannot be converted into legal tender under any circumstances except as expressly required by laws and regulations, and the company shall not provide refunds.”
2. Where players have fully enjoyed the game services, the contract purpose has been fulfilled, and consumed recharges are non-refundable
In the Kan XX case, the court held that the plaintiff’s recharge behavior was intended to rapidly increase level and combat power and obtain recharge rewards to maintain status as a top-tier player. The corresponding virtual items and in-game currency purchased through recharges were duly delivered by the defendant.
Considering that the plaintiff logged into the game nearly a thousand times before and after initiating litigation, the court concluded that the plaintiff had fully enjoyed the game services.
In practice, where players have already enjoyed the game services, courts generally do not support refund claims.
(III) Scenarios Where Players Claim Reliance on Advertising Content Without Carefully Reading the User Agreement
1. Clarifying the player’s civil capacity
In Zhao XX v. 37 Interactive Entertainment (Shanghai) Technology Co., Ltd. and Anhui 37 Network Technology Co., Ltd., disputes over an online service contract (2020)Yue0192MinChuNo.22669;(2020)Yue01MinZhongNo.20160(2020) Yue 0192 Min Chu No. 22669; (2020) Yue 01 Min Zhong No. 20160(2020)Yue0192MinChuNo.22669;(2020)Yue01MinZhongNo.20160, the court held that once Zhao XX registered, logged into the game, and made recharges, an online service contract was formed.
As an adult with full civil capacity, Zhao XX should have been aware of the existence of VIP levels, corresponding privileges, and minimum recharge amounts at the time of recharging. Instead of raising objections, Zhao XX continued to log in and recharge over a period exceeding one month. Such conduct was deemed acceptance of the relevant game settings.
Accordingly, players with full civil capacity are responsible for their own actions, including reading and understanding the User Agreement prior to registration. Even if a player fails to carefully read the agreement before ticking the confirmation box, such conduct constitutes a disposition of their own rights.
2. Clarifying the legal effect of the User Agreement and in-game rules
In Chen XX v. Qiyou (Xiamen) Technology Co., Ltd., a dispute over an online service contract (2017)Min0206MinChuNo.4778(2017) Min 0206 Min Chu No. 4778(2017)Min0206MinChuNo.4778, the court held that an online service contract existed between the parties, and both parties were obliged to perform their contractual obligations in accordance with the Service Agreement and relevant game rules.
After downloading, logging into, and using a game, players effectively form an online service contract with the game company. All parties should adhere to the principle of good faith and perform their obligations based on the nature, purpose, and transaction practices of the contract.
Under normal circumstances, games provide prompts to read the User Agreement on the login page, and users must confirm consent by ticking a checkbox. Where the agreement clearly stipulates relevant terms, players are bound by the agreement upon consent.
Insights and Recommendations
To minimize complaints, reports, or lawsuits arising from discrepancies between user acquisition materials and actual gameplay experiences in money-making games, our legal team offers the following recommendations:
Clearly specify withdrawal rules in the User Agreement:
Although withdrawal rules are usually disclosed within the game interface, eligibility thresholds for withdrawals are key rights and common sources of disputes. Game companies should ensure that the User Agreement clearly and specifically discloses withdrawal conditions and thresholds, highlights key clauses, and avoids ambiguity. In the event of litigation, companies may rely on the User Agreement as evidence of the contractual relationship.Enhance the prominence of agreement texts:
During user registration, agreement texts should be prominently displayed, and users should be required to actively confirm consent before logging in. Such measures help demonstrate that the company has fulfilled its reasonable duty of notice.Adopt compliant promotional strategies:
While attracting users is a core objective, promotional content must comply with the Advertising Law. Expressions likely to cause misunderstanding should be avoided. For money-making games in particular, withdrawal amounts and currency types should be objectively and truthfully presented, with clear reminders that actual in-game rules shall prevail.
