Shanghai game developer miHoYo, known for free-to-play RPG Genshin Impact, is at the centre of a massive lawsuit back in China. Filed against massive state-owned mineral company China Minmetals Corp, the beloved game studio’s legal troubles are huge news in its home region.
Why did the Genshin Impact developer sue Minmetals?
MiHoYo’s legal battle against China Minmetals Corp specifically targets a portion of the industry giant: Minmetals International Trust. Known as Mintrust, the subsidiary is an investment firm that entices businesses to give them money in exchange for high return rates. However, it would appear that Mintrust is failing to act on that deal.
The Genshin Impact developer’s lawsuit against the company was filed as a “business trust dispute”. Via South China Morning Post, it appears that Minmetals has failed to realise its deal with the game studio, potentially defaulting on the company’s investment.
SCMP notes that Mintrust has defaulted on “at least 15 trust investment projects”. The estimated value of these cancelled deals is at a staggering 2.3 Billion Yuan, around $343,000,000 at current exchange rates. This value is without miHoYo’s partnership.
The legal squabble between miHoYo and Minmetals is said to be “landmine” for both companies. Once the legal battle kicks off, the Chinese public will learn a lot about the country’s reliance on “shadow banking”.
Shadow banking is a prominent financial tool within China. As the country is continuing to build a huge home-grown tech presence for the first time, especially in terms of game development, the sinister financial tool has grown in usage.
We don’t know how much the Genshin Impact developer benefited from shadow banking, if at all. However, Chinese outlets seem adamant that unwelcome details will slip out about both Minmetals and miHoYo.
The initial hearing for the developer’s lawsuit is weeks away. On July 25th, the lawsuit will start at Chengzhong District People’s Court in Xining. Mintrust headquarters are located in the same province as the court. Essentially, the developer is taking the fight to their enemy.
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The Genshin Impact developer isn’t the first
Despite being the highest profile lawsuit against Minmetals, miHoYo is not the first developer to file against the company. Rise of Kingdoms developer Lilith Games has also sued the investment trust for the same reasons as miHoYo.
Nevertheless, it would appear that investment trusts are becoming a major issue for Chinese game studios. With China’s rather large hold on the mobile games market, that could spell trouble for gamers like us.