Esports and Games - Legal Considerations for Loot Boxes

Sheppard Mullin Richter & Hampton LLP
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Loot boxes have become a regular feature in many mainstream video games. However, while their popularity is clear amongst gamers, the legal issues and positions from regulators about their use, both in the US and abroad, are a bit more murky. By the end of 2020, several of the major console manufacturers have pledged to require games developed for their platforms to disclose information on the relative rarity or probability of obtaining randomized virtual items. These required disclosures will also apply to game updates, if the update adds new loot box features. Many major publishers have made a similar commitment to provide such disclosures by the end of the year. Given these impending self-regulating industry moves, the handout below provides an overview of the key legal considerations for companies currently using, or considering using loot boxes in their games...

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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