Genshin Impact Developer Fined $20 Million and Enforces Rule Changes Following FTC Allegations of Misleading Lootbox Odds

HoYoverse, the creator of Genshin Impact, has found itself in a bit of hot water, facing a hefty $20 million fine from the Federal Trade Commission. The issue stems from allegations that the company’s marketing tactics were misleading to its players, particularly when it comes to loot boxes.

In the details released by the FTC, a complaint was lodged by the US Department of Justice, accusing HoYoverse of sneakily marketing loot boxes to children. The accusation claims that these boxes disguised the true costs and misled players about their chances of snagging valuable prizes. Not surprisingly, this is a serious allegation that HoYoverse has chosen to settle by agreeing to pay $20 million. Additionally, the company has now been restricted from allowing kids under 16 to make in-game purchases unless they have parental approval—something that frankly should have been in place all along.

Responding to the situation, the director of consumer protection at the FTC didn’t hold back. They stated, “Genshin Impact deceived children, teens, and other players into spending hundreds of dollars on prizes they had little hope of winning. Companies using these sneaky tactics should know they’ll be held accountable, especially if they trick kids and young players on the actual costs of what they’re buying.”

The press release shed more light on the complaint, pointing out that Genshin Impact’s purchasing system hides the fact that players often need to fork out substantial money for coveted ‘five-star prizes.’ Alarmingly, some children have ended up spending hundreds or even thousands of dollars trying to secure them. The game’s intricate system forces players to swap real cash for virtual currency, which then gets exchanged multiple times before finally opening loot boxes. These complex exchange rates were cited as a major factor in misleading consumers about their ongoing spending.

In addition to the fine, there’s now a new rule in place: HoYoverse can no longer sell loot boxes via virtual currency without giving consumers a straightforward way to buy them with real money. So heads up, HoYoverse! Maybe next time, design your game’s currency systems to be fairer and truly transparent to all players.