Valve has moved to dismiss the New York Attorney General’s lawsuit against the company, which claims loot boxes in its games such as Counter-Strike 2 promote illegal gambling and threaten to addict children.
Attorney General Letitia James has accused Valve of making “billions of dollars by letting children and adults illegally gamble for the chance to win valuable virtual prizes,” calling loot boxes “addictive and harmful.”
As reported by Courthouse News, the company behind Steam said it would be a slippery slot to deem loot boxes illegal gambling, because doing so would mean the likes of baseball cards, Happy Meal toys, and even Labubu blind boxes would be considered gambling, too.
Valve said: “Each of those transactions — and many more like them — involves a purchase of randomized items that can be resold for cash. No court has allowed the executive branch to criminalize overnight such ‘a breathtaking amount of commonplace’ conduct not specifically proscribed by a statute. This court should not be the first.”
“People enjoy surprises,” Valve continued. “Part of the appeal of many popular collectibles, from baseball cards to cereal boxes, is the possibility of opening a sealed package and being surprised with a rare item. … No legislature or court has ever deemed that act illegal gambling.”
Valve’s “people enjoy surprises” line echoes a similar comment from an EA executive issued in response to concern around Ultimate Team card packs (“we don’t call them loot boxes, we call them surprise mechanics”). By and large, video game publishers operate loot boxes as they have done for years, despite multiple attempts from various authorities across the world to clamp down on them.
In March, Valve issued a rare public statement on the New York lawsuit when it said generations had grown up with Pokémon and Magic the Gathering cards. “Players don’t have to open mystery boxes to play Valve games,” it said at the time. “In fact, most of you don’t open any boxes at all and just play the games — because the items in the boxes are purely cosmetic, there is no disadvantage to a player not spending money.”
Valve detailed its fight against accounts that use Valve items on gambling sites, which it said violates the Steam Subscriber Agreement.
“NYAG proposes to take away users’ ability to transfer their digital items from Valve games. Transferability is a right we believe should not be taken away, and we refuse to do that,” Valve added.
“We respect New York’s right to determine the laws governing behavior in the state. We will of course comply if the New York legislature passes laws governing mystery boxes — something it has not done despite considering the issue a few times,” Valve continued. “Such laws would be the result of a public process, presumably with input from the industry and New York gamers. The type of commitments the NYAG demanded from Valve went far beyond what existing New York law requires and even beyond New York itself. It may have been easier and cheaper for Valve to make a deal with the NYAG, but we believed the type of deal that would satisfy the NYAG would have been bad for users and other game developers, and impacted our ability to innovate in game design.”
In its motion to dismiss, Valve continued to heavily criticize the lawsuit. “Can parents purchase packs of baseball cards for their children?” it said. “Can families go to Chuck E. Cheese to play games of chance and exchange winning tickets for prizes? Can a child reach into a cereal box and grab a surprise toy? All these actions and more could lead to chargeable crimes under NYAG’s interpretation of gambling.”
If the NYAG is successful, Valve could be blocked from selling loot boxes to New Yorkers. NYAG seeks damages worth three times the amount Valve has profited from its loot box business, which is estimated at a $4 billion economy for Counter-Strike items alone.
Wesley is Director, News at IGN. Find him on Twitter at @wyp100. You can reach Wesley at [email protected] or confidentially at [email protected].
