Last week, a district court in the Northern District of California ended a suit alleging unlawful and unfair conduct by videogame developer Supercell Oy. Plaintiffs alleged that Supercell’s use of loot boxes in its popular games Clash Royale and Brawl Stars constituted violations of California’s Unfair Competition Law (Business & Professions Code § 17200) and Consumers Legal Remedies Act (Civil Code § 1750). At the crux of Plaintiffs’ complaint were claims that loot boxes are illegal gambling games under California law and that loot boxes are inherently unfair because they exploit the same cognitive traps as gambling.

It is no secret that gaming companies have been increasingly keen to integrate or express enthusiasm for blockchain technology.

Game developers have been increasingly integrating cryptocurrency and Non-Fungible Tokens (NFTs) within their games hoping these digital assets will increase their games’ longevity with an expanded content offering. But, early feedback suggests these features risk fan-blowback so developers are advised to proceed deliberately.