By a 7-2 vote, the justices upheld a ruling by a U.S. appeals court that declared the law, which also imposes strict video-game labeling requirements, unconstitutional.
The law was challenged by video game publishers, distributors and sellers, including the Entertainment Software Association. Its members include Disney Interactive Studios, Electronic Arts, Microsoft Corp and Sony Computer Entertainment America.
The law, adopted in 2005, has never taken effect because of the legal challenge. It defines a violent video game as one that depicts ``killing, maiming, dismembering or sexually assaulting an image of a human being.'' Retailers who sell or rent a violent video game to a minor could be fined as much as $1,000.
The nation's video game industry has about $10.5 billion in annual sales. More than two-thirds of U.S. households include at least one person who plays video games.
Six other states have adopted similar laws, and all were struck down in court.
The Supreme Court rejected California's argument that the Constitution's free-speech guarantees under the First Amendment do not prevent a state from prohibiting the sale of violent video games to minors under 18.
``Our cases hold that minors are entitled to a significant degree of First Amendment protection. Government has no free-floating power to restrict the ideas to which they may be exposed,'' Justice Antonin Scalia said in summarizing the court's majority opinion from the bench.