United States: Epic Games Sued By Minor Over Llama-Shaped Cash Cow

Fortnite publisher accused of addicting children to escalating microtransactions


We would wager that you know all about Fortnite, a game that has become very popular for children, teens and even adults (albeit immature ones) across the country. The game seems inescapable – constantly referred to in the mainstream media as a cultural monster that has swallowed the nation’s children whole. If you have (or even just know) children of a certain age, you’ve heard about it or seen them endlessly playing it.

At AD-ttorneys@law, we strive to provide a benefit to all our readers, so for the three or four of you who don’t know about the game, here’s the skinny:

Fortnite is an insanely popular game that grew out of a simple insight: combining the first-person shooter genre with the construction game genre (think Minecraft, the last cultural monster that seemed to have captured children’s attention nationwide). The original release of Fortnite spawned a “Battle Royale” version of the game, which blew the doors off the genre: an unheard of 3.4 million players logging in concurrently to fight in 100-player arena battles. This second version of the game, which was released only in late 2017, is estimated to have raked in $2.4 billion in 2018.

Any endeavor that rakes in that much money that quickly is a lawsuit magnet, and deservedly or not, Epic has mined its share from the Fortnite game line.

Llama Drama

The most recent is a suit brought by a guardian on behalf of his young charge, named in the suit as “R.A.,” in the United States District Court in the Central District of California. The suit asserts that the very structure of the original Fortnite’s payment-and-reward system implies unjust enrichment and violates California’s Consumer Legal Remedies, Unfair Competition and False Advertising Laws.

Epic, like many other gaming companies, has recently forgone the traditional payment model for games: Instead of purchasing a complete game, users download a free version that is immediately playable. The trick is that the free games reward microtransactions – small in-game purchases – that offer cooler looks for the player’s persona, or make the game easier to play, or unlock features and levels that free players would otherwise miss. From these small in-game purchases, Epic has made billions of dollars.

In Fortnite the moneymaker is a so-called Llama, a loot box shaped like its animal namesake, which can be purchased with in-game currency. The boxes, when opened (you bash them with a stick, like a piñata), offer items that better the users’ odds of dominating in the game.

The intricacies of the in-game payment system are deep, but R.A.’s central complaint equates the Llamas with gambling on several different levels.

First, the suit claims that the online currency used to purchase Fortnite Llamas, earned by spending real-world currency or amassing hours of playtime, creates confusion among minors who play the game and have difficulty conceptualizing how much real-world money they’re actually spending. Moreover, it claims that the ratio between the value of in-game currency and the price of the loot is intentionally mismatched, leading to a cycle of escalating earning and purchasing – what the suit calls the “10 hotdogs, 8 buns” trick. Finally, the company allegedly makes ongoing charges very easy and provides no payment history – which the complaint alleges are a perfect match for minors who are at a developmental disadvantage when it comes to self-control.

The suit claims that each Llama offers a random set of loot, with the chance of a big payoff of special, highly valuable items. But despite tiered pricing models that suggest a player is purchasing better odds for good loot by spending more money, the chances of receiving the special loot are “extremely unlikely.” False upgrade schemes allegedly milk more money from players hoping to increase their chances for good loot.

R.A. claims that Epic has received numerous complaints about these schemes, and quotes a number of them, including this passage: [I]t feels like I am gambling to get good gear they’ve made it really hard to make this game fun due to this unrewarding llama system . . . it makes you spend a ton of money for llamas that you’ve no good way of telling if you’re going to get something good. This is almost unacceptable[.]

That “almost” is chilling in the context of R.A.’s larger claim: that Epic’s reward system is a form of gambling that children find hard to resist.

The Takeaway

Epic hasn’t replied to the complaint yet – we’ll be sure to give equal time to their counterarguments. This complaint is one of an increasing number of suits filed by parents on behalf of their children for deceptive and/or illegal marketing practices by companies that market and deliver products to youth consumers. Based on the popularity of this children’s game, it will be interesting to see what type of fallout or corrective actions Epic takes in response to the complaint and allegations, as this type of legal action will undoubtedly shine a light on the online game industries’ marketing and business practices, especially as they relate to children.

We refer businesses that target children to the Self-Regulatory Program for Children’s Advertising (known as CARU) and its guidance for advertising and sales activities directed to children. The guidance prohibits techniques that take advantage of the susceptibility of children to advertising and sales and children’s lack of developmental maturity. As we penned a couple of years ago here, we have long wondered when state attorneys general or CARU would take on children’s game publishers for “funpain,” “freemium” and other in-game purchase schemes that go too far in order to extract more than pocket change from children.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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