Roblox sues PlayerAuctions marketplace to block transactions outside of its gaming platform

A lawsuit filed Tuesday in federal court in San Francisco against the PlayerAuctions gaming marketplace may provide the answer to an important question for online gamers.

Gamers know that the assets they acquire as they play -- the game's "currency" and the virtual assets like clothing or tools that they earn or purchase along the way -- have real value, but how can they take advantage of it? Do they have to spend it on the platform where they got it, or can they sell it to someone else?

Roblox Corp., the San Mateo gaming company, filed its suit in the hope of preventing its gamers from using the online marketplace run by PlayerAuctions of Los Angeles to buy and sell "in-game" assets outside of the Roblox platform.

Roblox's suit focuses on a "virtual currency" called "Robux" and other virtual assets earned by players of Roblox games when they are playing the games.

Those "in-game" virtual assets have significant value, but according to the Roblox's terms of service, gamers can only spend or trade them on the Roblox platform.

PlayerAuctions maintains the leading marketplace where gamers may buy and sell virtual assets -- including virtual currencies like Robux, in-game "loot," and even a player's pending games or power levels -- just as if they were trading stocks on stock exchange.

Roblox is no fan of its gamers selling their Roblox assets on the exchange, and presumably in the hope of blocking that, Roblox's suit claims that by using the names "Roblox" and "Robux" on the exchange's website, PlayerAuctions is infringing Roblox' trademarks and diluting their value.

Roblox asked the court to issue a preliminary injunction to stop PlayerAuctions from using the trademarks while the suit is pending.
The PlayerAuctions exchange covers more than 200 games including the Roblox games.

The company claims to have more than 3.4 million traders (buyers and sellers) from 135 different countries that make on average a million monthly offers to buy or sell game assets.

PlayerAuctions touts its ease of use, security, and tools it offers like a market tracker where traders can see the price of virtual assets.

The tracker shows that Roblox is currently listed 17th on the website in terms of open offers (46) to buy or sell game currencies. The top listed game, World of Warcraft: The War Within, had 9,183 active offers for its in-game currency.

The company says that its size and scope have created a liquid global market that helps sellers obtain value for otherwise illiquid assets.

While Roblox's suit is only about its game and its trademarks, if its approach proves to be successful, other gaming platforms may consider whether they can do the same thing.

A similar suit was filed against PlayerAuctions in 2010 in federal court in Los Angeles by the San Francisco gaming company Zynga. According to court records, the case was settled the next year, but the terms of the settlement were not disclosed. (A review of the list of all of the games currently traded on the PlayerAuctions' exchange does not appear to include any games offered by Zynga.)

An invitation to comment on the lawsuit was not immediately acknowledged by PlayerAuctions.

The dispute arises at a time of increased attention on the practices of the online gaming industry. An April 4, 2024 report by the Consumer Financial Protection Bureau valued the global gaming industry at $249.55 billion in 2022 notes that "billions of U.S. dollars are spent each year in gaming and virtual worlds, where consumers buy gaming assets using fiat currency and then use those assets to make purchases in-game."

The report says that "an estimated 76 percent of children in the United States play video games."

It added, "the most popular virtual platform among young people in the U.S. is Roblox, which ... averaged 71.5 million active daily users globally in December 2023 and roughly 58 percent of those users were under the age of 16."

The primary focus expressed in the report and a later proposed interpretive rule is on the gaming companies.

The bureau expressed concern that "young people may be especially vulnerable to tactics used by gaming companies to induce spending and monetize gaming, as their financial habits are still forming." (While PlayerAuctions and other online marketplaces for in-game assets are mentioned in the report, the bureau did not express an opinion on their operations.)

The ongoing role of the CFPB in the world of online gaming is unclear. This month, the Trump administration replaced the former CFPB director and thereafter froze all of the bureau's activities for the time being.

Roblox was sued in 2021 by consumers in federal court in San Francisco in a class action concerning its alleged practice of denying refunds for in-game purchases when the virtual asset (clothing, tool, , etc.) was removed by Roblox as part of its content moderation efforts. The case was settled in 2023 by an unusual settlement in which part of the settlement amount was paid in cash and part via refunds of Robux.

The new lawsuit has been assigned to U.S. Magistrate Judge Kandis Westmore in Oakland.