Genshin Impact Developer Fined $20 Million and Faces Rule Changes After FTC Alleges Misleading Lootbox Odds

HoYoverse, the creator behind the wildly popular Genshin Impact, finds itself navigating some rough waters. The company is on the hook for a hefty $20 million fine, courtesy of the Federal Trade Commission, due to allegations of misleading players.

It seems the gaming giant has found itself in a bit of a pickle, following a complaint that the US Department of Justice filed for the FTC. The accusation? That HoYoverse was “unfairly marketing loot boxes to children,” cleverly hiding the true costs, and giving false hope about the likelihood of snagging those coveted prizes. Clearly not a good look for the developer. But HoYoverse has decided to own up to it and has agreed to pay the $20 million fine to put the matter to rest. What’s more, they’re now required to ensure kids under 16 can’t make in-game purchases without the nod from a parent. Honestly, it’s surprising this wasn’t already in place.

The FTC’s director of consumer protection weighed in, saying that “Genshin Impact duped children, teens, and other players into shelling out big bucks for prizes they barely stood a chance of winning. Companies playing these tricky games will face accountability, especially if they are pulling the wool over the eyes of youngsters and teens about the real costs of in-game buys.”

The official press release got into the nitty-gritty, pointing out that the complaint “alleges that the purchasing setup in Genshin Impact conceals the harsh reality that players often have to fork out significant amounts of real cash for ‘five-star prizes.’ Kids and adults alike have reportedly parted with hundreds or even thousands trying to win them… The system is such that players have to buy virtual currency bundles with real dollars, which then requires further exchanging to unlock loot boxes. These exchanges come with odd denominations, totally clouding how much players are actually spending on these loot boxes and what it would take to land certain prizes.”

Additionally, the developer now faces a ban on selling loot boxes through virtual currency unless there’s an option to buy them outright with real-money. Tough times for HoYoverse! Maybe the lesson here is to steer clear of crafting exploitative currency systems in future games.