Genshin Impact Hit with $20M Fine Over Lootbox Misleading Claims

Genshin Impact developer HoYoverse faces a significant setback as the company is fined $20 million by the Federal Trade Commission (FTC) for misleading players about loot box odds. Following a complaint from the US Department of Justice, the FTC accused HoYoverse of employing deceptive marketing tactics, particularly targeting children, by obscuring the true costs and chances of winning rewards through loot boxes. As part of the settlement, HoYoverse must now ensure that players under the age of 16 obtain parental consent before making in-game purchases. The FTC has stated that Genshin Impact's purchasing processes mislead consumers about the real expenses involved in securing high-value in-game items, leading some players to spend hundreds, if not thousands, of dollars. The developer will also be prohibited from selling loot boxes exclusively with virtual currency without offering a direct purchase option.

The Genshin Impact FTC fine sets a precedent that could lead to stricter regulations regarding in-game purchases and loot boxes across the gaming industry. The ruling emphasizes the need for transparency in marketing methods, particularly when targeting young audiences, and may prompt other companies to reassess their practices to avoid similar legal repercussions.

Genshin Impact is a popular action role-playing game that has amassed a large player base since its release in 2020. The game is known for its vibrant open world, engaging narrative, and complex gacha mechanics, which allow players to obtain characters and items through randomized loot boxes. The controversy surrounding its loot box system highlights ongoing concerns within the gaming community regarding fair practices and the ethical treatment of younger gamers.