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.

In an FTC press release, the agency stated that Hoyoverse will pay the 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 items through loot boxes.

Samuel Levine, Director of the FTC's Bureau of Consumer Protection, criticized Hoyoverse's "dark pattern tactics," highlighting the deception involved in the game's monetization system. He emphasized the FTC's commitment to holding companies accountable for deceptive practices targeting young players.

The FTC's primary accusations against Hoyoverse involve violations of the Children's Online Privacy Protection Rule (COPPA). Specifically, the FTC alleges Hoyoverse marketed Genshin Impact to children, collected their personal information without proper consent, and misrepresented the odds of winning coveted "five-star" items from loot boxes. The FTC further contends that the game's virtual currency system was intentionally confusing, leading players to unknowingly spend significant sums of money.

Beyond the financial penalty and sales restriction, the settlement mandates that Hoyoverse:

• Clearly disclose the odds of winning loot box prizes and the exchange rates for virtual currency.
• Delete personal information collected from children under 13.
• Ensure future compliance with COPPA regulations.

This settlement underscores the FTC's ongoing efforts to protect children and teens from manipulative in-game purchasing practices.