Since 2023, Valve says it has worked with the AGs to explain how its virtual items and mystery boxes work. It argues that players “don’t have to open mystery boxes to play Valve games” and that most don’t “because the items in the boxes are purely cosmetic.” Valve plans to fight James’ claims in court, but claims it would comply if the state’s legislature passes regulations related to loot boxes.

When the lawsuit was filed, James issued a press release saying “Valve has made billions of dollars luring its users, many of whom are teenagers or younger, to engage in gambling in the hopes of winning expensive virtual items that they can cash in on,” citing in-game mechanics that resemble a slot machine and can award items worth as much as $1 million.

The company, however, says it has “serious concerns” about the changes the lawsuit is pushing for Valve to make, such as making boxes and the digital items inside non-transferable. “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,” Valve writes. “Transferability is a right we believe should not be taken away, and we refuse to do that.”

Other proposals it objects to include collecting additional information to determine if a user in New York is using a virtual private network (VPN) to disguise their location and to perform age verification, despite existing payment methods offering built-in age checks. “The type of commitments the NYAG demanded from Valve went far beyond what existing New York law requires and even beyond New York itself,” Valve writes. “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.”