Valve compares its loot boxes to Labubus in lawsuit defense

Last month, the New York Attorney General (NYAG) brought a lawsuit against Valve accusing the company of promoting "illegal gambling" through its randomized in-game loot boxes. On Wednesday, Valve issued its first public comment on the case, comparing its digital loot boxes to randomized real-world purchases like blind-bagged toys or packs of trading cards.

"Generations have grown up opening baseball card packs and blind boxes and bags, and then trading and selling the items they receive," Valve wrote. "On the physical side, popular products used in this way include baseball cards, Pokemon, Magic the Gathering, and Labubu."

Though that may seem like an apt comparison on the surface, Valve's loot boxes differ from these real-world examples in large part because of Valve's control of the Steam Marketplace, which serves as the only legitimate way to exchange or resell those items. While owners of real-world items are free to trade or sell them however they want, Valve has cracked down on many third-party sites that enable the exchange of in-game items—especially when those items are used as glorified chips for gambling games.

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Remembering the 30-year-old computer game that introduced me to Star Wars

I grew up in a Star Trek household, not a Star Wars one. More to the point, I wasn't even allowed to watch Star Wars when I was a kid, so I didn't see the original trilogy until I was nearly an adult—about 17 years old, as I recall.

For my then-fundamentalist Christian family, the so-called "Eastern mysticism" of Star Wars was a bridge too far, something that could apparently corrupt my impressionable young Evangelical mind irreversibly. Star Trek was OK, though, because my parents didn't feel it condoned witchcraft, or what have you, and they liked the original series from when they were younger.

Because of all that, my first true immersion in the Star Wars universe wasn't the movies. It was the video games, and one in particular—Star Wars: Shadows of the Empire, which you can nab on GOG.

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Google Play Games for PC is getting more premium titles and cross-buy with Android

Google has been tinkering with porting its Play Games platform to Windows for several years, but it started getting serious about it last year. Now, with the 2026 Game Developer Conference underway, Google has announced a new batch of updates for its desktop gaming efforts. The company promises its store will have more Windows titles, make those games easier to find, and help bring Android experiences to PCs (and vice versa).

Windows will be presented as a core part of the Google Play platform with these updates. The mobile and web Play Store will soon have a Windows tab, which will highlight content that is optimized for desktop gaming. The store will direct you to install the Windows client to play these titles on a computer, but you can also wishlist them from any platform. When you do that, developers will be able to push notifications of sales that could entice people to buy something. This will only be available on mobile at first, but it will come to PC later.

Finding something worth playing in Google Play on a PC has been a challenge, but Google says it's working on that. The company promises a slate of premium games are coming to the Google Platform. Sledding Game, 9 Kings, Potion Craft, and Moonlight Peaks will launch in Google Play this year, and Low Budget Repairs will come in 2027. If you're unsure about dropping money on a game up front, Google plans to offer trials for select games. It will start with select games like Dredge and only on Android, but Google will make the trial option available to more developers and Windows down the line.

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Windows 11's Steam Deck-ish, streamlined Xbox gaming UI comes to all PCs in April

When Asus and Microsoft launched the ROG Xbox Ally X last summer, it came with a bespoke controller-driven full-screen interface running on top of Windows 11. The handheld was still running Windows under the hood, and you could bring up the typical Windows desktop any time, but it defaulted to the full-screen gaming UI.

Then called either the "Xbox Experience for Handheld" or the "Xbox Full-Screen Experience (FSE)" depending on who you asked and when, Microsoft said it would be available on all Windows PCs at some point in 2026. That point has apparently arrived: Microsoft announced this week at the Game Developers Conference that other Windows 11 PCs "in select markets" would be getting what's now being called "Xbox mode" starting in April.

Under the hood, a PC running in Xbox mode is still running regular-old Windows, with the same capabilities as any other PC. But there are system services and UI elements (like the standard Start menu and taskbar) that don't launch when the system is in Xbox mode, something Microsoft claims can save a gigabyte or two of RAM while also allowing systems to use less energy. Users can return to Windows' traditional desktop mode whenever they want, though.

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Don't worry, Valve still plans to launch the Steam Machine "this year"

Valve quickly reconfirmed that it plans to ship the Steam Machine and other recently announced hardware products "this year," after an official blog post late last week set off some worried speculation about possible delays.

While Steam's 2025 Year in Review mainly focused on new Steam tools and features released last year, the introductory section focused on the company's previously announced upcoming hardware plans. However, when that Year in Review post was first published Friday afternoon, it included a surprisingly vague line saying "we hope to ship in 2026, but as we shared recently, memory and storage shortages have created challenges for us." (Emphasis added.)

As stray chatter about that stray line started to filter through message boards and comment threads, Valve quickly issued a clarification. By late Friday, the blog post had been updated to note that, despite the global supply chain challenges, "we will be shipping all three products this year. More updates will be shared as we finalize our plans." (Emphasis added.)

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“It doesn't feel safe”—Many international game developers plan to skip GDC in US

This week, tens of thousands of game developers and producers will once again gather in San Francisco, as they have since 1988, for the weeklong Game Developers Conference. But this year’s show will be missing many international developers who say they no longer feel comfortable traveling to the United States to attend, no matter how relevant the show is to their work and careers.

Dozens of those developers who spoke to Ars in recent months say they’re wary of traveling to a country that has shown a callous disregard for—or outright hostility toward—the safety of international travelers. That’s especially true for developers from various minority groups, those with transgender identities, and those who feel they could be targeted for outspoken political beliefs.

“I honestly don't know anyone who is not from the US who is planning on going to the next GDC,” Godot Foundation Executive Director Emilio Coppola, who’s based in Spain, told Ars. “We never felt super safe, but now we are not willing to risk it.”

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Which of these two arcades is the "world largest"—and does it matter?

In New Hampshire, just off the western shore of the vacation destination Lake Winnipesaukee, there's a town called Laconia. With a population somewhere south of 17,000, it's barely a blip on a map—except on Bike Week, when around 300,000 motorcyclists swarm the place. On the other, quieter weeks of the year, Laconia is best known as the unlikely home of Funspot, the world's largest arcade.

Meanwhile, in Brookfield, Illinois, about 45 minutes west of Chicago and the shores of Lake Michigan, you'll find Galloping Ghost Arcade, a sprawling suburban palace with a nondescript exterior hiding a mind-blowing collection. With over 1,000 arcade cabinets (plus a further 46 pinball machines), Galloping Ghost is the world's largest arcade.

Yes, there are two arcades in the US labeled as the world's largest, and while that may seem a bit paradoxical, a visit to both proves that while only one can be the biggest, both are the greatest.

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MS exec: Microsoft's next console will play "Xbox and PC games"

Last summer, we here at Ars made the argument that the company's next Xbox console should give up the walled garden approach and just run Windows already. Now, newly named Microsoft Executive Vice President for Gaming Asha Sharma has strongly hinted that this is indeed the direction Microsoft is going, saying its next-generation console will "play your Xbox and PC games."

In a social media post Thursday afternoon, Sharma said that "our commitment to the return of Xbox" would include a new console codenamed Project Helix that "will lead in performance and play your Xbox and PC games." Sharma said she would be discussing that commitment and that console itself with developers and partners at her first Game Developers Conference next week.

Sharma's statement leaves a little wiggle room for Project Helix to be something other than a full-fledged Windows-based living room gaming box. The coming console's access to PC games could be limited to Microsoft's existing streaming solution via PC Game Pass, for instance, or to games designed for Microsoft's own Xbox-branded PC SDK and the PC Xbox app.

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After a rocky six years, Sony cancels future single-player PC game releases

Sony no longer plans to bring current and future single-player games to personal computers, according to Bloomberg. The report specifically names last year's Ghost of Yotei and the soon-to-be-released Returnal successor, Saros, as games whose PC plans have been canceled. Some multiplayer and third-party titles will still reach PCs, however.

Bloomberg's Jason Schreier cites "people familiar with the company's plans," who say that some within the company worry that releasing the games on PC could hurt sales of the PlayStation 5 console, as well as those of its unannounced successor. There could also be concerns that PlayStation titles could end up on competing Xbox hardware if Microsoft makes good on speculation that the next Xbox might play PC games.

There are a few caveats to this change in strategy that are important to note. First, multiplayer titles will still be released cross-platform, including Marathon, a reboot of an old first-person shooter franchise by Bungie (the studio that created Halo, now owned by Sony), slated to release tomorrow on both PlayStation 5 and PC (via Steam).

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How strong is New York's "illegal gambling" case against Valve's loot boxes?

For years now, Valve fans have been making jokes about the company's slow transition from game maker to glorified digital hat and knife paint marketplace. This week, though, a lawsuit brought by the state of New York argues that Valve's in-game loot box sales amount to an illegal gambling outfit worth tens of billions of dollars.

Lawyers who have looked into the particulars of the case tell Ars that the state faces an uphill battle in convincing courts that this portion of Valve's business legally constitutes gambling. That said, there are a few elements of the case that might make Valve legally vulnerable to the state's arguments.

What is gambling, anyway?

For a game to legally be counted as "gambling" in most jurisdictions, it has to pass a three-part test: a player has to pay money (1) for an outcome that's materially determined by chance (2) in the hopes of receiving something of value (3). While buying a key to a loot box in a Valve game easily passes those first two tests, New York's legal case will likely hinge on whether the random cosmetic items players get from those loot boxes constitute "something of value" for statutory purposes.

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New York sues Valve for enabling "illegal gambling" with loot boxes

New York state has filed a lawsuit against Valve alleging that randomized loot boxes in games like Counter-Strike 2, Team Fortress 2, and Dota 2 amount to a form of unregulated gambling, letting users "pay for the chance to win a rare virtual item of significant monetary value."

While many randomized video game loot boxes have drawn attention and regulation from various government bodies in recent years, the New York suit calls out Valve's system specifically for "enabl[ing] users to sell the virtual items they have won, either through its own virtual marketplace, the Steam Community Market, or through third-party marketplaces." The vast majority of Valve's in-game loot boxes contain skins that can only be resold for a few cents, the suit notes, while the rarest skins can be worth thousands of dollars through marketplaces on and off of Steam. That fits the statutory definition of gambling as "charging an individual for a chance to win something of value based on luck alone," according to the suit.

The Steam Wallet funds that users get through directly reselling skins "have the equivalent purchasing power on the Steam platform as cash," the suit notes. But if a user wants to convert those Steam funds to real cash, they can do so relatively easily by purchasing a Steam Deck and reselling it to any interested party, as an investigator did while preparing the lawsuit.

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Inside the quixotic team trying to build an entire world in a 20-year-old game

Despite being regarded as one of the greatest role-playing games of all time, The Elder Scrolls III: Morrowind disappointed some fans upon its release in 2002 because it didn't match the colossal scope of its predecessor, The Elder Scrolls II: Daggerfall. Almost immediately, fans began modding the remaining parts of the series’ fictional continent, Tamriel, into the game.

Over 20 years later, thousands of volunteers have collaborated on the mod projects Tamriel Rebuilt and Project Tamriel, building a space comparable in size to a small country. Such projects often sputter out, but these have endured, thanks in part to a steady stream of small, manageable updates instead of larger, less frequent ones.

A tale of (at least two) mods

It's true that Daggerfall included an entire continent’s worth of content, but it was mostly composed of procedurally generated liminal space. By contrast, Morrowind contained just a single island—not even the entire province after which the game was named. The difference was that it was handcrafted.

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New Microsoft gaming chief has "no tolerance for bad AI"

Last week's surprise departure of Phil Spencer from Microsoft led to the promotion of Asha Sharma, who comes to head Microsoft's gaming division after two years as president of the company's CoreAI Product group. Despite that recent history, Sharma says in a new interview that she has "no tolerance for bad AI" in game development.

Speaking with Variety, Sharma noted that "AI has long been part of gaming and will continue to be," before adding that "great stories are created by humans." The interview comes after Sharma promised in an introductory memo that "we will not chase short-term efficiency or flood our ecosystem with soulless AI slop. Games are and always will be art, crafted by humans, and created with the most innovative technology provided by us."

Those statements seem like a clear line in the sand from Sharma against the use of AI tools in Microsoft's first-party game development, at the very least. But what separates "bad AI" and "soulless AI slop" from "innovative technology" that humans can use to create artful games is a matter of some significant debate in the gaming world.

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Meta's flagship metaverse service leaves VR behind

Meta announced today that it will divorce its Horizon Worlds social and gaming service—once promoted as the company's first major step into the metaverse—from its Quest VR headset platform and digital store.

The company says it is now "shifting the focus of Worlds to be almost exclusively mobile." The announcement is also filled with statements like "we're doubling down on the VR developer ecosystem" that are attempting to head off any suggestion that Meta is retreating from the mixed reality space.

This is far from the first signal that big changes are happening with Meta's mixed reality strategy. CNBC reported that Meta has lost $80 billion on investments in Reality Labs, the company's mixed reality division. More than 1,000 Reality Labs employees were laid off in January, but don't misread that as a total closure; more than 15,000 people were working in that part of the organization before the layoffs.

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Why Final Fantasy is now targeting PC as its "lead platform"

For a long time now, PC gamers have been used to the Final Fantasy series treating their platform as somewhat secondary to the game's core console versions. There are some signs that may be starting to change, though, as director Naoki Hamaguchi has confirmed that the PC is now the "lead platform" for development of the Final Fantasy VII Remake trilogy.

In a recent interview with Automaton, Hamaguchi clarified that the team takes the relatively common practice of creating visual assets for its multiplatform games by targeting "high-end environments first," then performing a "reduction" for less powerful platforms. These days, that means "our 3D assets are created at the highest quality level based on PC as the foundation," he said. Players have already noticed this graphical difference in the PC version of Final Fantasy VII Rebirth, Hamaguchi said, and "our philosophy will not change for the third installment."

While PC gaming is only "gradually expanding in Japan," Hamaguchi said the rapid growth in international PC gamers has led the company to "develop assets with the broad PC market in mind."

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