In a recent press release, the Federal Trade Commission (FTC) announced that Genshin Impact developer HoYoverse has agreed to pay $20 million after violating children’s privacy laws. The government organization also accuses the game developer of deceiving children and other users about the true costs of in-game transactions and the odds of obtaining rare prizes. In addition to paying the fine, HoYoverse has agreed to block children under 16 from making in-game purchases or loot boxes in Genshin Impact without parental consent.
“Genshin Impact deceived children, teens, and other players into spending hundreds of dollars on prizes they stood little chance of winning,” Director of the FTC’s Bureau of Consumer Protection Samuel Levine said. The man stated that companies who dare to use these dark-pattern tactics would be punished for lying about the true costs of in-game transactions.
The FTC stated that Genshin Impact‘s virtual currency is intentionally confusing and that the company uses it to entice players to open loot boxes, as they are unaware of how much it truly costs to obtain a ‘five-star’ unit. “This complicated system, according to the complaint, misleads consumers about the amount of money that players spend on loot boxes on an ongoing basis,” FTC said, “and the amount of money that players would likely need to spend to obtain certain prizes.”
The FTC highlighted that Genshin Impact‘s anime-style cartoon graphics and bright, colorful animations are designed to appeal to children. Additionally, the FTC noted that the company has spent millions of dollars hiring social media influencers who are popular among younger demographics.
The organization also stated that HoYoverse has been collecting personal information from children, which violates the Children’s Online Privacy Protection Rule (COPPA). This rule requires online services and websites to obtain parental consent before collecting personal information from children under the age of 13.
In addition to being ordered to pay $20 million, Genshin Impact is prohibited from allowing children under 16 to purchase loot boxes. The company has also been ordered to provide Genshin Impact players with the option to buy loot boxes directly with real money, rather than exclusively using virtual currency.
Cognosphere, the distributor of Genshin Impact, has reached a settlement agreement with the United States Federal Trade Commission to strengthen and increase transparency around our parental consent and virtual currency practices.
“Animation-style games and shows are well-received by global audiences and players across various ages. Genshin Impact is a popular free-to-play, anime-style game designed for older teens and adults. While we believe many of the FTC’s allegations are inaccurate, we agreed to this settlement because we value the trust of our community and share a commitment to transparency for our players. Under the agreement, we will introduce new age-gate and parental consent protections for children and young teens and increase our in-game disclosures around virtual currency and rewards for players in the U.S. in the coming months.”
Fans’ reactions have been largely positive, as many agree that Gacha games are highly exploitative and predatory. “The FTC doing something for once. Has Hell frozen over?” one Redditor wrote. Some even argued that gambling should be banned from games that cannot verify their players are adults. However, others suspect that this move is motivated by the increasing hostility of the U.S. government toward anything made by China.
