On Wednesday, February 25, New York State Attorney General Letitia James (D-Park Slope) filed a lawsuit against Valve Corporation for “illegally promoting gambling through video games popular with children and teenagers.”
The Valve Corporation, colloquially known as just Valve, is the developer of the video games Counter Strike and Team Fortress 2, which were named in the lawsuit. Valve is also the owner of Steam, the largest online video game distribution service.
Counter Strike and Team Fortress 2 feature loot boxes, which is a system in a video game in which someone pays real money for a chance at an in-game item, usually of varying rarities and resale values. The lawsuit primarily focuses on Counter Strike in which the loot boxes are only cosmetic, meaning the firearms you use in that game carry a different visual appearance. These in-game cosmetic items, referred to as skins, can be resold on Valve’s community market, in which some of these skins can sell for hundreds and even thousands of dollars.
The crux of the AG’s argument is that the loot boxes in Counter Strike are tantamount to gambling because you spend $2.50 to open a loot box, and in return you can get a skin anywhere from three cents to thousands of dollars. Of note, the value of the skin you get is determined by what someone else decides to pay for it, meaning that it’s not a one-to-one slot machine. The value of these skins fluctuates to the point that so-called investors have made large amounts of money timing this in-game cosmetic market.
Second, Counter Strike is currently rated M, meaning you need to be 17 or older to play it without parent permission, so saying that it promotes child gambling is somewhat dubious.
Thirdly, ethics aside from the system of loot boxes, one of the quotes from AG James’ press release reads, “In addition, although this case is about illegal gambling, it is important to note that Valve’s promotion of games that glorify violence and guns helps fuel the dangerous epidemic of gun violence, particularly among young gamers who can become numbed to grave violence before their brains are fully developed.”
There is no study that proves a substantial link between consumption of violent video games and a higher incidence of committing violence. Only in New York would an Attorney General use the fear of gun violence to regulate a video game.
Furthermore, the loot box system of Counter Strike is much tamer when compared to other contemporaries in the video game space; oftentimes, player power is locked behind these gambling systems. This is usually called “pay-to-win.”
Many consider the video game FIFA to be one of the worst examples of predatory loot boxes in video games. FIFA, published by the media company Electronic Arts (EA), is the perennial soccer video game that is consistently one of the highest-selling video games year after year. In the most popular game mode of FIFA, players are able to put together teams of their favorite real-life soccer players. To get these real-life soccer players, players must spend money on “packs” which contain a chance of having any single player in the video games database.
In short, if you purchase the video game FIFA for your child and he wants to have Lionel Messi on his team, he needs to spend money on loot boxes until he gets Lionel Messi.
While there is a player-driven market where FIFA players can trade their collected professional soccer players for in-game currency, it is nearly impossible for someone who does not spend money on loot boxes to obtain these players. And yes, having Lionel Messi (and other similar rare and high rated soccer players) on your team in FIFA gives you an advantage compared to those who do not. This is not the case in Counter Strike, where cosmetic skins for weapons do not affect player power at all.
The issue of loot boxes in video games is not new to the political world, nor is it partisan. In 2019, U.S. Senator Josh Hawley (R-MO) introduced a bill to “regulate certain pay-to-win microtransactions and sales of loot boxes in interactive digital entertainment products, and for other purposes.” The bill would make it illegal to include pay-to-win microtransactions and/or loot boxes in video games oriented towards children. This is a bill I support, and I hope it gets reintroduced one day.
But if I’m against Letitia James going after a company for loot boxes, why am I for Josh Hawley’s bill? Aside from the reasons listed above, the answer is rather simple, and it is why the position of Attorney General has become problematic. The Attorney General is not supposed to be a mechanism for change. If you want to change the way companies conduct business, you do it through passing laws. You don’t get to rule via selective enforcement. Now, the New York State Attorney General is specifically targeting one company out of thousands that engage in this practice. Why has Attorney General James chosen to pursue only Valve?
While there is a myriad of speculation regarding this, one of the more peculiar arguments is that Valve is a privately owned company, while most of these other massive media conglomerates that engage in selling loot boxes through their video games are publicly owned and traded. If Letitia James went after a publicly traded company for the same reason she is currently going after Valve, that would have effects on the value of their stock. Perhaps this is why she chose to go after a privately owned company.
I hope one day the video game market moves to a more consumer-friendly model, but lawfare is never the way to accomplish this. Legislatures exist for a reason, even if many think them to be vestigial.
