Genshin Impact Developer Agrees to $20M Fine Over Loot Box Violations

Hoyoverse, the publisher of the popular game Genshin Impact, has reached a $20 million settlement with the Federal Trade Commission (FTC). The settlement includes a ban on selling loot boxes to players under 16 without parental consent.

The FTC's press release details the agreement, stating Hoyoverse will pay the substantial fine and implement measures to prevent underage in-app purchases. This follows allegations that the company misled players, particularly children and teens, regarding the odds of winning valuable in-game prizes ("five-star" loot box items) and the overall cost involved.

Samuel Levine, Director of the FTC's Bureau of Consumer Protection, criticized Hoyoverse's practices, stating they employed "dark-pattern tactics" that deceived players into spending significant sums of money with minimal chances of success. He emphasized the FTC's commitment to holding companies accountable for such deceptive practices targeting vulnerable demographics.

The FTC's primary claims against Hoyoverse center on violations of the Children's Online Privacy Protection Rule (COPPA). The agency alleges Hoyoverse marketed Genshin Impact to children, collected their personal information without proper consent, and misrepresented the odds and costs associated with loot box prizes. The FTC further contends that the game's virtual currency system was deliberately confusing and unfair, obscuring the high cost of obtaining desirable items and leading to substantial spending by minors.

In addition to the financial penalty and the sales restriction, the settlement mandates that Hoyoverse publicly disclose loot box odds and virtual currency exchange rates, delete personal data collected from children under 13, and adhere to COPPA regulations in the future. This settlement underscores the FTC's ongoing efforts to protect children and teens from manipulative in-game purchasing practices.