We shared with the NYAG that these types of boxes in our games are widely used, not just in video games but in the tangible world as well, where generations have grown up opening baseball card packs and blind boxes and bags, and then trading and selling the items they receive.
The biggest difference compared to the likes of EA and Activision is that the items have real monetary value. In Activision or EA games the money spent on the lootbox is effectively wasted. You generally can’t trade the content to recoup the costs and in some cases where you can those trades tend to happen for in-game currency which again, has no real monetary value. There’s no monetary incentive to “gamble” because from a monetary point of view it’s always a loss. The lawsuit actually makes a case that with Valve there is a monetary incentive to “gamble” because the value of the item you receive from the lootbox translates to real world money. And while the lawsuit has to take sort of a roundabout way of proving that, I think most people agree that the stuff you pull from Valve’s lootboxes has real monetary value.
The second point is supporting the infrastructure to make trades happen. One of the things that separates trading cards from gambling is that the cards themselves officially have no value. You can buy a pack of MTG cards and get something really valuable but you can’t sell that back to WotC (Wizards of the Coast, the makers of MTG) and actually WotC doesn’t even acknowledge that you pulled something really valuable because they claim all the cards have their value based on rarity and not the card itself. But it’s valuable because there’s a secondary market that has nothing to do with WotC. That’s not entirely true for Valve because all trades happen on Valve’s infrastructure and Valve literally shows the real world value of the items. Now Valve gets to claim they don’t set the price, the market does, and that’s not an acknowledgement of the value, but Valve still benefits and supports that market which itself is a vessel for gambling. Worth mentioning that it’s not an argument that is being made in the lawsuit (at least I didn’t notice it there) so it’s less relevant or even completely irrelevant from a legal perspective, at least for now.
Yeah I was missing the key detail that you need to pay to open the loot boxes which gives them a base monetary value as the starting point and does essentially equate to pay for the contents inside. That combined with them also running a market for trades and sales of the item is very synonymous with the pachinko machine setup and I do agree that this is gambling.
Thank you for taking the time to explain. I haven’t played any of Valve’s games that have loot boxes so I didn’t understand how it was different from loot boxes in Destiny or Battlefield.
Oh yeah, I completely forgot to mention that part because for some reason I thought everyone knew you can’t open Valve lootboxes without paying for it. That’s a very important distinction to make because if you could open them for free there’s an argument that because you’re not putting money in it’s not legally gambling.
Yeah. a lot of people don’t mention it and I had no frame of reference but I kept seeing comments that sort of alluded to that. I tried to Google it but with the current news cycle that information is buried and I couldn’t find a source. And of course I don’t play those games so I just didn’t know.
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The biggest difference compared to the likes of EA and Activision is that the items have real monetary value. In Activision or EA games the money spent on the lootbox is effectively wasted. You generally can’t trade the content to recoup the costs and in some cases where you can those trades tend to happen for in-game currency which again, has no real monetary value. There’s no monetary incentive to “gamble” because from a monetary point of view it’s always a loss. The lawsuit actually makes a case that with Valve there is a monetary incentive to “gamble” because the value of the item you receive from the lootbox translates to real world money. And while the lawsuit has to take sort of a roundabout way of proving that, I think most people agree that the stuff you pull from Valve’s lootboxes has real monetary value.
The second point is supporting the infrastructure to make trades happen. One of the things that separates trading cards from gambling is that the cards themselves officially have no value. You can buy a pack of MTG cards and get something really valuable but you can’t sell that back to WotC (Wizards of the Coast, the makers of MTG) and actually WotC doesn’t even acknowledge that you pulled something really valuable because they claim all the cards have their value based on rarity and not the card itself. But it’s valuable because there’s a secondary market that has nothing to do with WotC. That’s not entirely true for Valve because all trades happen on Valve’s infrastructure and Valve literally shows the real world value of the items. Now Valve gets to claim they don’t set the price, the market does, and that’s not an acknowledgement of the value, but Valve still benefits and supports that market which itself is a vessel for gambling. Worth mentioning that it’s not an argument that is being made in the lawsuit (at least I didn’t notice it there) so it’s less relevant or even completely irrelevant from a legal perspective, at least for now.
Yeah I was missing the key detail that you need to pay to open the loot boxes which gives them a base monetary value as the starting point and does essentially equate to pay for the contents inside. That combined with them also running a market for trades and sales of the item is very synonymous with the pachinko machine setup and I do agree that this is gambling.
Thank you for taking the time to explain. I haven’t played any of Valve’s games that have loot boxes so I didn’t understand how it was different from loot boxes in Destiny or Battlefield.
Oh yeah, I completely forgot to mention that part because for some reason I thought everyone knew you can’t open Valve lootboxes without paying for it. That’s a very important distinction to make because if you could open them for free there’s an argument that because you’re not putting money in it’s not legally gambling.
Yeah. a lot of people don’t mention it and I had no frame of reference but I kept seeing comments that sort of alluded to that. I tried to Google it but with the current news cycle that information is buried and I couldn’t find a source. And of course I don’t play those games so I just didn’t know.
Still, thanks again.