Genshin Impact Settles FTC Case with $20 Million Fine

he popular open-world action RPG, Genshin Impact, has recently made headlines due to a significant settlement with the Federal Trade Commission (FTC). The game’s developer, HoYoVerse, formerly known as Cognosphere, agreed to pay a hefty $20 million fine to settle allegations of violating children’s privacy laws and misleading players about the true costs of in-game purchases.

The FTC accused HoYoVerse of using dark-pattern tactics to deceive children, teens, and other players into spending large sums of money on loot boxes, which are virtual mystery boxes that can be purchased with real money or in-game currency. These loot boxes offer a chance to win rare in-game items, but the odds of obtaining these items were not clearly disclosed, leading to confusion and frustration among players3.

The settlement requires HoYoverse to implement several changes to its practices, including:

Parental Consent: HoYoVerse must obtain parental consent before collecting personal information from children under 13 and restrict in-game purchases for players under 16 without parental consent.
Clear Disclosure: The company must provide clear information about the odds of winning specific prizes and the real-world costs of purchasing loot boxes.
Data Deletion: HoYoverse is required to delete any personal information previously collected from children under 13 without parental consent.

In response to the settlement, HoYoVerse stated that while it believes many of the FTC’s allegations are inaccurate, it agreed to the settlement to demonstrate its commitment to transparency and trust with its community. The company also announced plans to introduce new age-gate and parental consent protections for children and young teens in the coming months5.

Of course, this settlement has sparked a broader conversation about the ethics of in-game purchases and the responsibility of game developers to protect young players. Many gamers have expressed concerns about the predatory nature of loot boxes and the need for more stringent regulations to prevent similar issues in the future.

The Genshin Impact settlement serves as a reminder of the importance of transparency and ethical practices in the gaming industry.

As the FTC continues to crack down on unfair and deceptive practices, it is likely that other game developers will face increased scrutiny and be required to make similar changes to protect their players.