Don't Let Video Game Companies Hide Behind Terms Kids Never Agreed To

Ask any parent. Today’s video games aren’t just games. They’re stores.

Many of the most popular games are built around “microtransactions,” which are small, real-money purchases of in-game items. Usually a player can’t buy anything with dollars directly. First they have to convert their money into a game currency, like coins, points, or “VC.” Those coins are sold in bundles that rarely match what anything in the game actually costs, so there’s almost always a little left over, and a reason to buy more. The game shows prices in coins instead of dollars, and it’s easy to lose track of how much real money is being spent. That’s not an accident. It’s the business model. For some publishers, in-game purchases bring in far more money than selling the game itself.

And a lot of the customers are kids.

Where This Comes Up

Take a fantasy adventure game rated “E for Everyone.” Kids can spend gems on “mystery chests” that might hold a rare sword or a new pet, but usually don’t. A parent’s credit card is saved on the family’s console, and the game never asks for a password before a purchase. The “Buy” button sits right where the “Play” button usually goes, so one wrong tap triggers a charge. The game offers a countdown timer, flashing deals that disappear in sixty seconds, and reminders that friends already have the newest pet. A seven-year-old can rack up hundreds of dollars in a single afternoon without understanding that any real money was spent. When the parent sees the credit card bill and asks for a refund, the company says no.

When families sue over this kind of thing, the companies reach for the same defense: the terms of service. Somewhere in the fine print, they say, the player agreed that the currency was never really theirs. It was only a “limited license” that the company could take away at any time, for any reason, without paying a cent.

There are a few problems with that argument.

First, Kids' Rights Are Different

Kids can’t simply sign away their rights the way adults can. The law has long recognized that minors are different when it comes to contracts. In fact, some game companies’ own terms say that you must be an adult to agree to them, or that a parent must agree for the child. But those same companies often do nothing to check who is clicking “I agree.” A company can’t write a rule into its contract requiring an adult’s consent, ignore it, and then enforce the contract against a twelve-year-old anyway.

Second, the Agreement Has to Be Clear

The way these terms are presented makes real agreement unlikely. Often, the terms appear only after the game has already been bought, as a take-it-or-leave-it screen standing between the player and the game. The rules about virtual currency can be scattered across 30-plus pages of single-spaced legalese, full of defined terms that point to other defined terms. Adults don’t read these. Expecting a child to understand them is absurd.

Third, the Agreement Has to Be Fair

even a valid contract can’t do everything. Courts won’t enforce terms that are so one-sided they’re unfair, and some state laws don’t let companies write themselves a free pass for intentionally destroying someone else’s property. (See, for example, California Civil Code § 1668.) A company that calls its product “Virtual Currency,” sells it for real money, and shows a balance in the player’s account can’t later claim it never sold anything at all.

The bottom line is that a terms of service agreement is not a magic shield. When companies design games to get kids spending and then rely on fine print the kids never meaningfully agreed to, the law has something to say about it. And we're doing something about it: Deams v. 2K Games.

If your child lost money or virtual currency in a video game, talk to us. It’s our job to help you.