By Sagar V. Mankar 
MiHoYo, the creator of the popular game Genshin Impact, has agreed to pay $20 million to settle charges brought by the U.S. Federal Trade Commission (FTC). This settlement addresses concerns about the game’s lootbox mechanics and their impact on young players.
The heart of the issue revolves around how the game handled its “gacha” system, a type of lootbox mechanism where players spend virtual currency to obtain rare characters and items. According to the FTC’s complaint, MiHoYo (or HoYoverse) allegedly misled players about both the odds of winning valuable prizes and the actual costs involved in obtaining them.
In a press release, Samuel Levine, Director of the FTC’s Bureau of Consumer Protection, strongly criticized the company’s practices, stating that Genshin Impact “deceived children, teens, and other players into spending hundreds of dollars on prizes they stood little chance of winning.” He emphasized that companies using such deceptive tactics, particularly those targeting young players, will face consequences.
The settlement introduces several significant changes to protect consumers, especially younger players. Most notably, the company is now prohibited from selling lootboxes to players under 16 without explicit parental consent. Additionally, HoYoverse must:
- Clearly disclose the odds of winning items through lootboxes
- Provide transparent exchange rates for virtual currency
- Delete all personal information collected from children under 13
- Comply with Children’s Online Privacy Protection Act (COPPA) regulations
The FTC’s investigation revealed that the game’s virtual currency system was “deliberately confusing” and obscured the real-world costs of obtaining “five-star” prizes. This resulted in some children spending hundreds or even thousands of dollars in their attempts to win rare items.
This settlement marks a significant precedent in the gaming industry’s ongoing debate about lootbox mechanics and their potential impact on younger players.
In a similar case, FTC began issuing refunds totaling over $72 million last month as part of a settlement with Epic Games for their deceptive practice of “dark patterns” that trick players into making unwanted purchases.
Sources: Federal Trade Commission Press Release