Genshin Impact Fined $20 Million by FTC for Exploitative Loot Box Practices

Genshin Impact Fined $20 Million by FTC for Exploitative Loot Box Practices

The gaming industry has long been criticized for its monetization strategies, particularly the use of loot boxes. These randomized virtual rewards, often purchased with real money, have raised concerns about gambling-like mechanics, especially among children and adolescents. In a landmark decision, Genshin Impact, a popular open-world action RPG, has been fined $20 million by the US Federal Trade Commission (FTC) for deceptive and unfair practices related to its loot box system. The Case Against Genshin Impact The FTC and the Department of Justice (DoJ) alleged that Genshin Impact, distributed by Cognosphere LLC (operating as HoYoverse), violated the Children's Online Privacy Protection Act (COPPA) and engaged in deceptive marketing practices. Exploitative Loot Box Mechanics: Genshin Impact's "wishes" (loot boxes) offered virtual items like characters, weapons, and cosmetic items with varying rarity. The odds of obtaining the most coveted items were extremely low, encou…