Genshin Impact Developer Faces $20 Million Fine and Rule Changes Following FTC Allegations on Misleading Lootbox Odds

HoYoverse, the creator of Genshin Impact, has found itself in a bit of hot water, facing a hefty $20 million fine issued by the Federal Trade Commission. The charge stems from allegations that the company misled players through its marketing strategies.

In a move that surprised many, the FTC, with input from the US Department of Justice, claimed that HoYoverse “unfairly marketed loot boxes to children,” hiding the true costs and misleading players about the chances of winning prizes. This accusation isn’t just a minor hiccup for HoYoverse. Following the FTC’s press release, the company has decided to pay the $20 million fine to address these charges. Additionally, HoYoverse is now required to prevent children under 16 from making any in-game purchases without parental approval — a measure one would have expected to be in place already.

Addressing the issue publicly, the director of the FTC’s bureau of consumer protection criticized Genshin Impact for tricking kids, teenagers, and even adults into spending significant amounts on rewards that were hard to win. The director emphasized that companies resorting to such deceptive tactics, particularly when targeting young gamers, must be held accountable.

The official statement from the FTC highlighted that their grievance points to a purchasing system in Genshin Impact that hides the fact that players might often have to shell out substantial sums to snag those elusive “five-star prizes.” It turns out, many children have poured hundreds or even thousands of dollars trying to land these sought-after items. Players are required to exchange real money for in-game currency, which then needs to be converted several times to unlock loot boxes. The unique exchange rates in their system further obscure the actual cost, misleading buyers about their total spending and what it truly takes to secure specific prizes.

Adding to the changes HoYoverse must make, they are now banned from selling loot boxes through virtual currency without offering players the ability to buy directly with real cash. It’s a stark reminder for HoYoverse: in designing a game with glaringly exploitative currency systems, they might find themselves on the receiving end of significant consequences.