New York state has initiated legal action against Valve concerning the use of loot boxes in its games, with Attorney General Letitia James labeling them as a form of “illegal gambling.” In response, Valve issued a comprehensive public statement expressing its disappointment with the lawsuit, asserting that the “mystery boxes” present in its games do not contravene the state’s gambling regulations.

According to Valve, the company was first approached by the New York Attorney General about virtual items and loot boxes—such as those used in Counter Strike 2 and Dota 2—in early 2023. Valve indicated that such loot boxes have a long-standing presence in both the gaming world and offline markets, referencing the traditional practice of opening baseball card packs and other similar products.

Valve elaborated that popular physical products that operate on similar principles include baseball cards, Pokémon cards, and Magic the Gathering cards. It stated that the concept of digital packs resembling their mystery boxes has existed since 2004 and has become common in the gaming industry. Importantly, players are not required to purchase or open these loot boxes to enjoy Valve games, as the items contained within are purely cosmetic, thus posing no disadvantage to those who choose not to engage with them.

During the investigation initiated by the New York Attorney General, Valve emphasized its initiatives to combat the use of its items on gambling sites, which violate the Steam Subscriber Agreement. They highlighted that measures have been taken to address fraud and theft within their ecosystem, and mentioned their actions to prevent gambling entities from exploiting Steam accounts and game items.

Valve reiterated that it does not support gambling websites, stating that over one million Steam accounts have been locked due to external misuse related to gambling and fraud. The company has implemented features designed to hinder the operations of gambling sites and to ensure user safety. Additionally, Valve prohibits any gambling-related activities in connection with tournaments for their games.

Furthermore, Valve expressed concerns about the proposed changes from the New York Attorney General, particularly the suggestion that loot boxes and their contents should be made non-transferable. Valve argued that this perspective fails to recognize the similarities between digital items and physical collectibles and contended that the ability to transfer game items is advantageous for consumers. They likened it to trading or selling tangible items like Pokémon cards, asserting that such transferability is a consumer right that should not be restricted.

The New York Attorney General also suggested that Valve should gather additional user information to facilitate age verification, even in cases where users might use VPNs to mask their location. Valve criticized this request as intrusive and emphasized its commitment to data privacy, stating that they only wish to collect information necessary for business operations and legal compliance.

Valve expressed readiness to adhere to any laws that the New York legislature may eventually establish regarding loot boxes, noting that such legislation would ideally involve public discourse, including input from the gaming industry and players in New York. However, the company claimed that the Attorney General’s demands exceeded current legal requirements in New York and beyond. They also stated that while settling with the Attorney General might have been more straightforward, the compromises required would negatively impact both users and game developers, stifling innovation in game design.

In conclusion, Valve indicated that a court will ultimately determine the validity of their position versus that of the Attorney General. They aimed to inform users in New York and elsewhere about the potential ramifications of this lawsuit.