The US Federal Trade Commission is close to settling with Hoyoverse, the publisher of Genshin Impact, over concerns that the monetization methods of the game may be deceptive. The investigation focused on its gacha system, where you can spend real money for a chance to win rare in-game characters or items. In this article, I will talk about how the US FTC fines HoYoverse’s Genshin Impact for its Deceptive Gacha System.
FTC imposes a fine of $20 million fine on HoYoverse for its deceptive Gacha System
The U.S. Federal Trade Commission has filed a $20 million fine against Cognosphere, the developer of the popular game Genshin Impact, for misleading players about the costs and odds associated with in-game loot boxes. The FTC’s investigation revealed that the game’s complex virtual currency system obscured the real-world financial implications of purchasing items.
This leads players, including minors, to spend significant amounts without a clear understanding of the potential returns. This settlement underscores the FTC’s commitment to protecting consumers from deceptive digital monetization strategies, particularly those targeting younger audiences.
New Regulations mandate Parental Consent for IAPs made by Minors
As part of the settlement with the FTC, Cognosphere is now required to implement stringent measures to prevent children under the age of 16 from making in-game purchases without explicit parental consent. This decision addresses concerns that Genshin Impact’s vibrant graphics and child-like characters were particularly appealing to younger players, who may not fully comprehend the financial ramifications of in-game spending.
By enforcing these new regulations, the FTC aims to ensure that game developers prioritize the protection of minors in their monetization practices, setting a precedent for the broader gaming industry. The controversy surrounding Genshin Impact centers on its gacha system, a mechanic where players spend real money to acquire virtual currency, which is then used to obtain random in-game items or characters.
Players question fairness in Gacha Game Policies
This recent fine that was made against Genshin Impact developer Cognosphere has sparked a wave of debate among gamers, with many accusing the FTC of hypocrisy and bias. A recurring sentiment in online discussions is the glaring inconsistency in targeting Chinese companies like Cognosphere while turning a blind eye to Western gaming giants like EA, whose loot box practices in FIFA are widely regarded as exploitative.
Critics argue that FIFA’s system, with vague less than 1% odds and lack of transparency for individual items, poses a far greater risk to consumers than Genshin Impact’s published drop rates and hard pity system.
Final Thoughts
The FTC’s action against Genshin Impact highlights growing concerns about transparency and fairness in gacha systems. While this settlement brings stricter regulations to protect consumers, especially minors, it also raises questions about consistency in enforcement across the gaming industry.
Many players are calling for equal scrutiny of Western companies with similar or even more exploitative practices. This case could mark a turning point in how governments regulate digital monetization in games, emphasizing fairness and accountability for all developers.
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