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The US Federal Trade Commission (FTC) has announced that the developer of the popular game Genshin Impact, HoYoverse, needs to pay $20 million to settle charges of selling loot boxes in the game and will be banned from doing so to teens under 16.
The press release issued by FTC stated that “Game developer Cognosphere allegedly unfairly marketed loot boxes to children that obscured real costs and misled all players about the odds of obtaining prizes.” Director of the FTC's Bureau of Consumer Protection, Samuel Levine, said that the game had “deceived children, teens, and other players into spending hundreds of dollars on prizes they stood little chance of winning.” He further emphasized that companies using “dark-pattern tactics” to mislead players, especially young children and teens, “about the true costs of in-game transactions,” will be held accountable.
Genshin Impact is free-to-play but it features a gacha mechanism called the Wish system, where players pull cards to obtain weapons or characters of different rarity levels. The odds of getting a 5-star item are obscure, and it’s said that sometimes at least 80 to 90 pulls are needed to obtain one.
Developer Cognosphere has responded by publishing a follow-up statement, which reads:
“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.”
The $20 million fine sounds quite a lot, but is it a large number for the company? The popular anime-style RPG was a huge commercial success and earned $5 billion on the mobile platform alone in 40 months since its launch in September 2020, making it the fastest mobile game that witnessed this number.
Although its revenue is unarguably high, the company seems to be quite careful when giving out to the players. A good example is how its much-anticipated event of Chinese New Year last year, Lantern Rite, disappointed the players in China - players took action against the developer by unfollowing the game’s social media accounts and review bombing the game. This year’s Lantern Rite event is about to start in around a week, and it seems to be offering better rewards than last year’s event.
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