(By You Yunting) Previously, I wrote an article titled Should Global Steam in China Be Scrutinized Too Since Valve Loot Boxes Was Sued as Gambling in the U.S.?, commenting on New York State Attorney General’s lawsuit against Valve over its in-game loot box mechanism. Recently, Valve posted a defense on Steam’s official website, arguing that its in-game loot boxes mechanism is like baseball cards, Pokémon, Magic the Gathering, and Labubu. At first glance, this defense seems plausible, but in reality, it contains fundamental flaws and borders on sophistry. Let’s take a closer look.
Valve’s statement reads as follows: “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, Pokémon, Magic the Gathering, and Labubu.”
To put it another way, Valve argues that its loot boxes are the same as baseball card packs and Labubu blind boxes—all offer random items that can be traded or sold. Valve’s analogies are not entirely wrong. Baseball card packs, Pokémon, Magic the Gathering, and Labubu do share common features with loot boxes: random items with varying rarity tiers can be received after payment; the items can be traded and sold on secondary markets; and their market value may far exceed the purchase price. If selling physical blind boxes and trading cards does not constitute gambling, Valve suggests, then the sale of loot boxes should not be considered gambling either.
However, the issue is that similarity in feature does not equate to equivalence in law. It’s like sports betting and futures trading—both involve wagering on future outcomes, yet their legal natures are entirely different. There are several decisive structural differences between Valve’s loot boxes and the physical products mentioned above:
First, secondary markets for baseball card packs, Pokémon and Labubu emerged spontaneously. The issuers (such as The Pokémon Company, Topps or Pop Mart) do not operate official secondary trading platforms or collect commissions from resales. Those who want to resell blind boxes have to use second-hand platforms like Xianyu or speciality shops, which have no direct economic connection to the issuers.
Valve, by contrast, plays a dual role: it is not only the issuer of loot boxes, but also the operator of the official secondary market (Steam Community Market) for in-game items, collecting a 15% commission on each secondary transaction. This means Valve has, by design, created a closed loop that includes buying keys, opening loot boxes, obtaining items, and liquidating them—and takes a cut at every stage. The core argument of the New York State Attorney General is precisely that this closed-loop monetization model turns loot boxes from consumer products into gambling tools. When players buy keys to open loot boxes, they are essentially staking chips to win items that can be cashed out.
Second, once Pop Mart sells a Labubu product, its ownership is fully transferred to the consumer. Valve players, however, do not actually “own” the items they unbox. According to the Steam End User License Agreement, what players acquire is merely a license to use within their accounts. As a centralized controller, Valve retains the right to suspend accounts, modify item drop rates, or even discontinue certain items or alter their appearances at any time.
Third, Valve has also deliberately designed the presentation of a random result to mirror a gambling experience. Opening a Labubu is simply unboxing, with no dynamic or animated process. In contrast, Valve’s unboxing interface is as described in the complaint specifically: the wheel spins rapidly at first and then gradually slows… the spinning wheel may come to rest immediately next to the icon for the rare and valuable item. This visual gives users the impression that they “almost” won the valuable item, a design feature …known as a “near miss”. This is an addictive design used by the slot machine industry for decades. This is not a matter of product analogy; it is a digital replication of the gambling mechanism.
Fourth, trading Labubu blind boxes or cards requires checking specialized websites for prices, verifying the items’ condition, packaging the items and arranging delivery, and bearing logistics risks, which implies a long period and low liquidity for monetization, manifesting themselves as collectibles. Valve, however, has actively financialized loot boxes. Supported by the ecosystem of its Steam platform, and its Steam Community Market and third-party secondary marketplaces, loot boxes from games like CS2 or Dota 2 boast extremely high liquidity. Even though Steam Wallet balance cannot be withdrawn directly, they can be converted to cash by purchasing hardware for resale, almost equivalent to digital currency. Transactions are completed instantaneously, and price curves on the Steam market fluctuate in real-time like stock market candlestick charts. This heavily stimulates speculation with strong financial and gambling attributes.
Finally, Valve’s making these analogies is not really aimed at proving legality, but at creating room for negotiations. It sends a signal to regulators and courts: “If loot boxes are illegal, then baseball cards, Pokémon cards, and blind boxes shall be illegal too”. Such an argument attempts to broaden the implications of the judgment to the entire collectibles industry, raising concerns about systemic impact. This is a common litigation tactic—blurring the issue to pressure regulators and courts into accepting a settlement. However, the strategy has an obvious weakness. Once Valve collects a 15% commission on every transaction, it is no longer merely a game developer—it becomes, in substance, the house within the gambling ecosystem while Pop Mart has never done that. This is likely to be the most difficult issue for Valve to defend at trial. For Chinese players, this distinction is equally vital.
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