Genshin Impact Faces Huge Penalty for Gacha System Violations

Overview of the FTC Settlement with HoYoverse

HoYoverse fined $20 million by the FTC.
Issues centered around gacha systems aimed at minors.
Mandatory deletion of data for children under 13 years old.

HoYoverse, the publisher behind the immensely popular game Genshin Impact, has reached a significant settlement with the United States Federal Trade Commission (FTC) that includes a hefty $20 million fine. This action is the result of the FTC’s concerns regarding the game’s gacha mechanics and the way it manages data for its younger players. The regulatory body accused Genshin Impact of misleading children and teenagers into making real-money purchases, despite disproportionately low chances of obtaining desirable in-game rewards.

Genshin Impact, while celebrated for its engaging gameplay, has faced increasing scrutiny over its monetization strategies. The game employs a “Wish”gacha system—a mechanic akin to loot boxes—where players spend currency in hopes of acquiring new characters and weapons. However, the FTC has raised alarms about the transparency of these odds and the potential for targeting a vulnerable audience.

As part of the recent settlement, HoYoverse is obligated to pay the $20 million fine, which will contribute to the U.S. Treasury. The FTC highlighted that HoYoverse had heavily invested in marketing its gacha system, including a controversial promotion featuring popular influencer, SSSniperwolf. In a paid collaboration worth $100,000, SSSniperwolf showcased a sequence where she “wished” multiple times in the game, successfully obtaining a rare character—Zhongli. This promotional video allegedly misrepresented the actual chances of acquiring such a character, with claims that the video editing made the process seem artificially favorable.

FTC’s Concerns Regarding Minors in Genshin Impact

The agreement also tackles the alleged improper handling of data related to minors, particularly focusing on gacha purchases made by underage players. Alongside the financial penalty, HoYoverse has committed to refraining from selling gacha wishes to users below the age of 16 unless they have received parental consent. Additionally, the company will delete all personal data of users younger than 13 years, ensuring that gacha purchases will now require direct currency rather than an in-game conversion system.

An official spokesperson for HoYoverse emphasized that the company does not acknowledge any wrongdoing, asserting that many claims made by the FTC are inaccurate. Nevertheless, they have chosen to accept the settlement terms to maintain the trust of their player community. While the agreement is subject to judicial approval, it is anticipated that the settlement will face little opposition.

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