Title: Genshin Impact Faced with $20 million Lawsuit Over Misleading Gacha Spending Claims
Genshin Impact, a globally popular gacha game, finds itself in hot water with the Federal Trade Commission (FTC) due to its revenue model. HoYoverse, the game's developer, has agreed to a $20 million settlement for allegations concerning its "gambling" approach to character acquisition.
The accusations against HoYoverse include:
- Marketing the game to children and gathering data on them, violating the Children's Online Privacy Protection Act in the United States.
- Misleading consumers about the costs of in-game transactions and the odds of obtaining rare prizes.
- Utilizing complex purchasing systems and "Dark Pattern" tactics to confuse players about the ongoing expenditure on loot boxes and the required investment to secure certain prizes.
Generation Impact arguably deceived underage players and avid users into spending substantial sums on prizes they had little chance of winning, as per the FTC's director, Samuel Levine. Esteemed companies using such manipulative tactics will face repercussions, particularly when targeting younger audiences.
While the fine might seem trivial compared to Genshin Impact's impressive earnings – the game generated $1 billion in its first six months on mobile alone – the changes are less so. The penalties apply only in the United States, with other popular gacha game regions like Asia requiring no additional adjustments.
HoYoverse's official statement emphasizes the game's popularity among older teens and adults, while acknowledging certain allegations' inaccuracy. The company pledges to reinforce age-gate and parental consent protections, better in-game disclosures on virtual currency, and loot box purchase clarifications for U.S. players.
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The FTC's director, Samuel Levine, accused Genshin Impact of deceiving underage players and avid users by marketing its "gambling" approach and gathering data, which could potentially violate the Children's Online Privacy Protection Act. Despite the $20 million settlement, the changes in purchasing systems and disclosures are crucial, as they primarily apply to the United States market.
