Valve responds to NY Attorney General lawsuit: “We have serious concerns with the alterations the NYAG claims are necessary to make to our games”

Valve has responded to New York Attorney General Letitia James’ lawsuit against the firm, stating it does not believe that lootboxes in its Counter-Strike 2, Dota 2, and Team Fortress 2 games unlawfully encourage minors to gamble, adding it was “disappointed” to see the action go ahead despite efforts to “educate” the NYAG about virtual items since “early 2023.”

Following an investigation by the Office of the Attorney General (OAG), a suit was filed on February 26, claiming Valve “has made billions of dollars luring its users, many of whom are teenagers or younger, to engage in gambling.”

Now, directly addressing New York players of its tentpole franchises, Valve wrote: “You may have seen the New York Attorney General recently filed a lawsuit against Valve claiming mystery boxes (like crates, cases, and chests) in some of our games violate New York gambling laws. We don’t believe that they do, and were disappointed to see the NYAG make that claim after working to educate them about our virtual items and mystery boxes since they first reached out to us in early 2023. We rarely talk about litigation, but we felt we should explain the situation to you.

“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. On the physical side, popular products used in this way include baseball cards, Pokemon, Magic the Gathering, and Labubu. In the game space, digital packs similar to our boxes date back to 2004 and are in widespread use. Players don’t have to open mystery boxes to play Valve games. 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.”

The company said that it shared its “efforts over many years to shut down accounts found to be using Valve’s game items on gambling sites in violation” of its agreements, as well as its “efforts to combat fraud and theft of users’ items and [its] extraordinary measures to stop gambling sites from taking advantage of Steam accounts and Valve game items.”

“To date we’ve locked over one million Steam accounts that were being misused by third parties in connection with gambling, fraud, and theft,” Valve added. “We’ve also shipped features (like trade reversal and trade cooldown) to discourage gambling sites’ ability to operate and protect Steam users from fraud. And we forbid any gambling-related business to participate in or sponsor tournaments for our games.”

Valve then outlined the “alterations” requested by the NYAG office.

“We have serious concerns with many of the alterations the NYAG claims are necessary to make to our games. First, the NYAG seems to believe boxes and their contents should not be transferable. They appear to assume digital mystery boxes and items in our games are different from tangible items like baseball card packs (which contain random cards), and to take issue with the fact that users have the ability to transfer the items they receive through Steam Trading or user-to-user sales on the Community Market.

“We think the transferability of a digital game item is good for consumers – it gives a user the ability to sell or trade an old or unwanted item for something else, in the same way an owner can sell or trade a tangible item like a Pokemon or baseball card. 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: “The NYAG also proposed to gather additional information (beyond what we normally collect in the course of processing payments) about each game user on the off-chance someone in New York was anonymizing their location to appear outside of New York, such as by using a VPN. This would have involved implementing invasive technologies for every user worldwide.

“Similarly, the NYAG demanded that Valve collect more personal data about our users to do additional age verification – even though most payment methods used by New York Steam users already have age verification built-in. Valve knows our users care about the security of their personal information, and we believe it’s in our and their interest to only collect the information necessary to operate the business and comply with law.”

The company added that it “will of course comply if the New York legislature passes laws governing mystery boxes,” but pointed out “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,” the statement concludes. “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 addition, although this case is about mystery boxes, we feel the need to address comments made by the NYAG about games, real-world violence, and children. Those extraneous comments are a distraction and a mischaracterization we’ve all heard before. Numerous studies throughout the years have concluded there is no link between media (movies, TV, books, comics, music, and games) and real-world violence. Indeed, many studies highlight the beneficial impact of games to users.”

In closing, Valve wrote: “Ultimately, a court will decide whose position – ours or NYAG’s – is correct. In the meantime, we wanted to make sure you were aware of the potential impact to users in New York and elsewhere.”

On Monday, the Performing Right Society (PRS) also “commenced legal proceedings” against Steam owner Valve over the use of its members’ works on Steam “without permission.”

The organization claims that while games right across the spectrum use music to “transform play into emotional, immersive experiences,” Valve has “never obtained a licence for its use of the rights managed by PRS on behalf of its members, comprising songwriters, composers, and music publishers.”