Genshin Impact’s developer to pay $20 million fine to settle FTC charges

The popular video game Genshin Impact, developed by miHoYo, has been hit with a $20 million fine by the Federal Trade Commission (FTC). This hefty penalty comes as a result of the FTC's investigation into the game's data practices and the handling of its in-game loot box system. This system, widely used in the gaming industry, allows players to spend real or virtual currency in exchange for a random selection of virtual items.

The FTC's decision was influenced by concerns about the transparency of the game's loot box mechanism. The regulator suggested that Genshin Impact hid the odds of obtaining rare items from their loot boxes, which could potentially mislead players into spending more money. The fine also reflects the FTC's growing concern about data privacy in the gaming industry. According to the ruling, miHoYo was found to have mishandled user data, although specific details about this aspect of the investigation were not made public.

Genshin Impact is a free-to-play action role-playing game that has gained significant popularity since its release. Its revenue is largely generated through microtransactions, with the loot box system being a significant part of this. The game allows players to acquire a variety of virtual items, including characters and weapons, through its "Wish" system, a form of loot box mechanism. Players have a chance of obtaining these items when they make a "Wish", but the odds of receiving rare items are typically low.

The $20 million fine imposed on miHoYo is one of the largest issued by the FTC in relation to video games. It is also a clear sign that regulators are taking a closer look at the gaming industry's practices, particularly those related to data privacy and in-game purchases. This could lead to more stringent regulations in the future, as authorities seek to ensure that players are treated fairly and that their data is handled appropriately.

The FTC's ruling is, therefore, a warning to all game developers to ensure transparency in their practices and to handle user data with care. It serves as a reminder that the gaming industry is not exempt from scrutiny and that failure to comply with regulations can result in severe penalties.