Settlement with the FTC: A Significant Step
Genshin Impact’s publisher, Hoyoverse, has reached a settlement agreement with the United States Federal Trade Commission (FTC) that includes a hefty $20 million fine. This resolution comes as part of a broader effort to protect younger players, as Hoyoverse has also committed to prohibiting the sale of loot boxes to teenagers under the age of 16.
FTC’s Findings and Concerns
In a recent press release, the FTC detailed its concerns regarding Hoyoverse’s practices. The agency stated that the developers of Genshin Impact “have agreed to pay $20 million and to block children under 16 from making in-game purchases without parental consent.” This action stems from allegations that the game misled children and teens into spending significant amounts of money on in-game rewards with minimal chances of winning.
Deceptive Marketing Practices Uncovered
Samuel Levine, the FTC’s Director of the Bureau of Consumer Protection, expressed that Genshin Impact employed tactics that deceived players, particularly vulnerable young audiences. He emphasized that companies using “dark-pattern tactics” to mislead players, especially minors, would face consequences.
The FTC specifically accused Hoyoverse of violating the Children’s Online Privacy Protection Rule by actively marketing Genshin Impact to children and collecting their personal information. Furthermore, the agency pointed out that players were misled about the actual odds of winning coveted “five-star” loot box prizes, as well as the costs associated with opening these loot boxes.
Complexity of the In-Game Economy
The FTC raised concerns about Genshin Impact’s virtual currency system, describing it as confusing and unfair. This system obscures the reality that players could end up spending substantial amounts of money in pursuit of “five-star prizes.” Reports indicated that some young players have spent hundreds to thousands of dollars without fully understanding the implications.
Future Compliance Measures
In addition to the financial penalty and age restrictions, Hoyoverse is now obligated to disclose the odds associated with loot boxes and the exchange rates for its virtual currency. The company must also delete any personal information collected from children under the age of 13 and adhere to the COPPA regulations moving forward.
This settlement signifies a critical moment for video game developers, highlighting the need for transparency and ethical practices in monetization strategies, particularly when targeting younger audiences.
