Valve turns off lootboxes in the Netherlands for DOTA 2 and CounterStrike: Global Offensive

    
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This is obviously someone else's fault.

If you were in any way hoping that the Dutch Gaming Authority’s ruling about lockboxes would lead to a worldwide shift, it seems that’s not quite what’s happening. Valve was one of the companies told to change their lockboxes or face prosecution in the Netherlands for failing to comply with the country’s policies, and Valve has responded… by disabling the Steam Marketplace selling or direct trading of lootboxes for CounterStrike: Global Offensive and DOTA 2 in the Netherlands.

The official statement from Valve indicates that it does not agree with the DGA’s ruling and that appeals are ongoing but that the current action is the only possible solution to the problem. There’s no word of any sort of long-term plans if the DGA does not change its ruling, especially as Valve is currently framing the disabling of lockboxes as a wholly temporary measure. Our condolences to players negatively affected by the decision.

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Sally Bowls

Upon entering this wormhole, I am emerging differently than I expected, especially considering the title. IMO, if a month ago we had a roundtable to discuss what would be the worst possible outcome – the outcome where various viewpoints are all unhappy – we would have arrived at about the current reality.

1) There has been a question as to whether lootboxes with random awards are legal. At least in the Netherlands, we have an official ruling from the Dutch Gaming Commission.
They are legal.

the Dutch decision is strictly defined as follows: “Loot boxes contravene the law if the in-game goods from the loot boxes are transferable. Loot boxes do no contravene the law if the in-game goods from the loot boxes are not transferable.”

2) Ergo, people with gambling addiction – and/or what my mother would describe as more dollars than sense – can continue to buy random lootboxes.

3) However, people like me who don’t mind the occasional expenditure on games and prefer to spend ingame currency not RL$ are precluded by law from doing so.

Let me repeat this rant: problem gamblers can still gamble (Remember The Children!); P2W can still P2W; but I am prohibited by law from reducing RNG by buying from another player. I loved the SWTOR cartel crate items being available without RNG for in-game credits.

4) I would be surprised if, at least in the short term, this does not increase the profitability and sales of lockboxes. Someone who wants the Sparkling Buttcape of Charr Clipping no longer has the option of buying it from a player. BOGU and head to the “lootboxes of BoP” vendor and RNG until it drops or bankruptcy.

5) Companies who are wondering whether to put lootboxes in their game have to be at least comforted and perhaps more inclined to do so after the Dutch Gaming Commission says they are legal.

Your kid being able to spend $500 on crates with random contents is legal; selling one of the contents is not legal.

tl;dr:

The most terrifying words in the English language are: I’m from the government and I’m here to help.
Ronald Reagan

———

P.S. a good analogy is how GaaS has replaced the old-fashioned “buying” that your grandparents did. Think of it as LaaS – lootbox as a service. You don’t “buy” the lootbox because that might imply you owned the contents and could dispose of them as you will. :-(

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dinwitt

This. It boggled my mind that people were celebrating the Dutch ruling, when it was outlawing the most consumer friendly lockbox model.

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Arktouros

There’s lots of people out there who have no ability to think forward. It’s like the people who “voted with their wallets” and unsubbed from MMO games couldn’t conceive of the idea that studios would just replace the model with something worse.

They see any change as a victory even when it is the opposite and regression backwards (such as losing the ability to purchase individual skins from players and bypass lock boxes entirely players are instead now forced into opening the boxes for the skins themselves).

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rafael12104

Lol. And then there are people that take the Hobbes approach and accept the Leviathan. Lol.

If they come up with something even more demented than predatory loot boxes, it doesn’t automatically become acceptable because there was a “victory” over loot boxes. Quite the opposite.

If that is your reality, then I suggest it isn’t looking forward or backward. To accept an evil because it is better than encountering another evil is not thinking at all.

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McGuffn

All else being equal, maybe. But with the ability to trade/sell an item to people that really want it, the developer also has an incentive to restrict the drop rates further.

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Arktouros

Yes, the article title is very misleading considering it’s not at all what happened.

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McGuffn

FWIW I’m not certain that there’s any prohibition on selling the item using an in game auction house for in game currency such as gold. Valve’s problem is they’re using the steam marketplace and selling for real money.

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Sally Bowls

What I read was ““Loot boxes contravene the law if the in-game goods from the loot boxes are transferable.” Does transferable mean transferable or mean “transferable for RL$?” IDK

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RJB

Wait does this mean you can’ty sell skins anymore?

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Sally Bowls

The rest of world outside of the Netherlands is unchanged.

Dutch citizens inside the Netherlands can no longer sell skins.

The upshot is clearly to raise the cost for the Dutch citizens who want skins.

My guess is that, at least in the short term, it should increase the profitability of lockboxes for Valve. A competitive alternative to their lockboxes, buying a skin from a fellow player, has now been prohibited by the government. Less competition means more prices.

Another slight bump in lockbox sales is that customers who are worried their country will “go Dutch” would want to buy in advance before the price increase.

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Sally Bowls

Upon reflection, I am puzzled by – or at least ignorant of – the dev / publisher aspect.

Until the appeals are resolved, let’s assume lootboxes are illegal gambling in the Netherlands: then is it legal for the Valve store – or any store – to sell games, e.g. MMOs, that utilize lootboxes? We are assuming the developers are in violation of something; what about companies selling violating software?

Because they are pulling DOTA, Valve can’t claim they are ignorant of the issue. Is it really legal for Valve to accept money from Dutch customers for games in putative violation of these laws? If DOTA and its lockboxes were published by MassivelyOP not Valve, could and/or would the Valve store continue to sell it?

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Sally Bowls

Nvm, after reading @Arktouros correction below I think I understand.

Dotas Lootboxes are still being sold by Valve in the Netherlands and with the closing of the marketplace, they will remain legal. Unless the other three games warned don’t remedy the trading aspect, all lockboxes will continue to be legal in the Netherlands and thus the games with lootboxes will continue to be legal.

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McGuffn

Valve seems to think, probably with good reason, that its practice of selling lockboxes that players can then trade with other players (including for money) is what violates the gambling law. If i remember correctly, the Netherlands didn’t call out the lockboxes in general, only the way certain companies were using them.

There’s also a second issue where Valve runs the marketplace and takes a cut of every sale. Good luck blaming the black market when you built and administer the market and take a percentage of the sales.

If other games allow you to sell the boxes or the contents, I’m pretty sure they’d eventually be treated the same, there are certainly other games that allow you to sell loot on the marketplace beyond what you get for completing a set of steam cards, but I am not sure if those are earned simply by playing the game or direct purchases in all cases, or if it is randomized.

This is a tangent, but I also want to see how the industry’s claims that lockboxes aren’t gambling *because you always get something of value* run up against its somewhat contradictory claims that you don’t own anything in the game, or that your account can be be taken away at a whim or that the game will be shut down.

It will probably go nowhere, but what they’re really saying is that lockboxes are not gambling because there isn’t anything of value inside them. They just don’t admit that for various obvious reasons.

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Arktouros

This is a tangent, but I also want to see how the industry’s claims that lockboxes aren’t gambling *because you always get something of value* run up against its somewhat contradictory claims that you don’t own anything in the game, or that your account can be be taken away at a whim or that the game will be shut down.

The whole topic on the idea of virtual property is immensely fascinating to me and I’m equally excited to see how that plays out.

They also argue the items do have value, and that’s why it’s not gambling, because you’re always receiving something of value for your money. What they argue, however, is that items have no real world value and only have value in context of the game.

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McGuffn

Yep, and the reality is that the lockboxes contain things of basically no value that very few people want. It’s basically junk. Then they add some ultra rare things that people buy the boxes for.

When you put money in a slot machine you get the possibility to get money out. When you put money towards a lockbox more than likely you’re getting garbage back.

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Arktouros

This really varies game to game however. For example look at ESO. ESO will give you 4ish items per open, most of the time when added up individually will be 1000+ crowns in the store under a tidy package of only 400 crown lockbox.

While on the one hand you could argue someone is only opening the box for the vastly more rarer mounts and instead you’re getting a large number of items you would have never purchased had it not been for the enticing chance of said mount. However what you can’t really argue is that the items you received have lower or no value because the pricing indicates they not only have a value but it also exceeds the initial price of the box they came in.

That’s the fundamental difference between a lock box and a slot machine. The slot machine you can spend money and literally get nothing in return. The lock box always returns something, even if the perceived value doesn’t line up.

Such is where the legal battle really lies, in the distinction between how important expectation of satisfaction with purchase and/or the differences in perceived value.

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Sally Bowls

An analogy and perhaps foreshadowing comes out of my reading about the horrible and evil article 13 that is in the process of being enacted in the EU. My understanding is:

1) Some media companies got Spain to pass some laws about links and payments against Google
2) Google drops Google News in Spain
3) The media companies in #1 above saw their traffic and income decline and said this was not what they wanted and how to force Google to come back
4) Now there is a push from Old Media interests to protect themselves with the EU-wide article 13

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Arktouros

I pretty much only read google news. If I then go to a website beyond that which locks me out for not paying, basically just go back and click on another link lol…

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Sally Bowls

IANAL nor European, but I am a bit surprised this is legal. I.e., there are a lot of laws and regulations about the common market being a common market – not being able to charge more for something digital in Germany than Bulgaria. I read that the recent EU regulation “Regulation on the Portability of Online Content Services” means that a German in the Netherlands can watch any Netflix available to them, regardless of whether it is licensed in the Netherlands. So I am not sure if this will end up that you can’t get lockboxes in the Netherlands or just that you can’t get lockboxes in the Netherlands if you are Dutch.

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Brother Maynard

Gambling is handled at the level of the member states. This is very unlikely to change, as it’s a morality / vice matter. You can’t have this handled centrally with such a diverse group – some member states are very liberal, others are very conservative…

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Brother Maynard

The thing with the single market is that back when it was prepared, nobody even heard of anything ‘digital’. And with the crisis of mid-2000 and the following populist and nationalist backlash, there wasn’t much appetite to give more power to the central EU institutions, but rather the opposite.

It’s been only in the past years that the digital aspects have finally started to be worked on, precisely to bring the whole single market up to speed with the internet age, but it’s a very slow and painful process. There is a lot of opposition from the traditional businesses (like old publishing houses, which are especially strong in Germany) who have a lot of influence over national governments.

It’s all interlinked with a huge numbers of other policy areas and many of them are controversial / face stiff opposition, including copyright reform, geo-blocking and such stuff.

Also, copyright holders usually prefer to deal with a divided market, as they can re-sell their rights many times over. Why would the Premier League sell their football rights once, when they can sell them in each member state separately?

Even though the intent is good and clear – to have a unified digital market, it will be a very complicated process and some of its parts will probably take years to push through (if ever)…

As for Netflix, the portability is already in place, but Netflix still has its own licencing limitations (see the paragraph above about copyright holders dividing the market), so although you have access to your Netflix account from anywhere, the available shows might differ depending on whether Netflix has the licence for that particular country.

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Sally Bowls

TY!
As an American, I certainly empathize with the ideas that the law moves so much slower than technology and that when ideals and goals run up against wealthy, established institutions, the ideals sometimes lose.

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Arktouros

Also, correction: They didn’t disable loot boxes. They disabled trading the items from loot boxes.

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Arktouros

If you were in any way hoping that the Dutch Gaming Authority’s ruling about lockboxes would lead to a worldwide shift, it seems that’s not quite what’s happening.

No one should have expected it. Hoped, maybe, but it would be a naive hope.

The easiest solution was simply work around these countries who, in all reality, are likely a minor source of revenue compared to larger countries that have a vested interest in their businesses doing well.

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Danny Smith

Man the lockbox addicts i know screeching about “big gubment coming for my investments” is some high tier cringe, cant wait for the youtube freakout videos.

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Darthbawl

That statement from Valve came off as a bit whiny/butthurt. They knew it was coming, at least I certainly hope they did. Good ole Jim Sterling called this months ago and posted his $0.02 worth yesterday/today.

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Sally Bowls

I am not sure I would call it whiny/butthurt as just part of the process. I assume the next steps are a lawsuit in the Netherlands and if that is not successful then a lawsuit in a European court. So there may be multiple lawsuits over multiple years before this is finally resolved. While this is ongoing, like litigants everywhere, I expect periodic fervent assertion of the many reasons they should prevail.

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Schmidt.Capela

It’s still too soon to see how this situation will develop.

On the other hand, the WHO adding gaming addiction among their list of potential health issues, side by side with gambling addiction, hands the opponents of loot boxes fresh ammunition to get that intersection of gaming and gambling regulated in the same way pure gambling currently is.