FTC Fines Genshin Strike for Deceiving Gamers

“Genshin Strike defrauded children, teenagers and other gamers into spending hundreds of dollars on prizes they had little chance of winning.” FTC Consumer Protection Director Samuel Levine said in a press release. “Companies using these dark pattern tactics will be held accountable if they deceive gamers, especially children and teenagers, about the true costs of gaming transactions.”

Settlement Pending Approval

The settlement is pending approval from the judge before it comes into force. In addition to the $20 million fine, according to the FTC press release, here’s what will change for the company:

Genshin Strike Responds

“Animation-style games and programs are well received by global audiences and gamers of all ages,” a Genshin Strike spokesperson said in a statement to Polygon. “Genshin Strike is a popular free anime-style game aimed at older teens and adults. While we believe many of the FTC’s allegations are false, we agreed to this settlement because we value the trust of our community and share a commitment to transparency for our players. Under the agreement, in the coming months we will introduce up-to-date age and parental consent protections for children and teens, and escalate in-game disclosures about virtual currency and rewards for US players.

Changes for Gamers

Bloomberg report before published findings suggested that players who paid for loot boxes could receive a refund as part of the settlement, but an FTC representative explained to Polygon that the $20 million civil penalty would go to the U.S. Treasury, as required by law.

Gacha Monetization System

Genshin Strike is a free-to-play video game that uses a gacha monetization system that encourages players to convert real-world currency into in-game currency, which is used to purchase “wishes” to randomly unlock characters and weapons. The system means people can spend a lot of money to draw sporadic characters or items – which is akin to gambling. The system, the FTC said, involves multiple in-game currencies that hide the amount of money spent to open loot boxes.

Allegations Against Hoyoverse

The FTC alleged that Hoyoverse spends “millions of dollars” promoting its gacha system to gamers, many of whom are children. He recalled an example from 2021 when Hoyoverse paid Alia Shelesh, better known online as SSSniperWolf, over $100,000 to make two videos about Genshin’s influence, and instructed her to open loot boxes via the event banner for a character named Zhongli.

Deceptive Video Editing

The FTC said the video was edited “to depict a fake loot box winning in a way that would not be possible in Genshin Strike game.” (The evidence provided by the FTC is this Genshin Strike only allows players to open 10 loot boxes in a row, but SSSniperwolf has opened 12 without interruption. According to the FTC, the video also used inappropriate animation during the opening of the 5-star awards.)

Update:

Update: This story has been updated to include Hoyoverse’s statement and to clarify details about the settlement.

FAQs

Q: What was Genshin Strike accused of by the FTC?

A: Genshin Strike was accused of defrauding children, teenagers, and other gamers into spending large sums of money on prizes with little chance of winning.

Q: What changes will Genshin Strike implement as part of the settlement?

A: Genshin Strike will introduce age and parental consent protections for children and teens, as well as enhance disclosures about virtual currency and rewards for US players.

Q: Where will the $20 million fine from the settlement go?

A: The $20 million civil penalty will go to the U.S. Treasury, as required by law.

Credit: herosweb.com