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 fine and implement measures to prevent underage in-app purchases. FTC Bureau of Consumer Protection Director Samuel Levine criticized Hoyoverse's practices, alleging they misled players, particularly children and teens, into spending significant sums on in-game prizes with low win probabilities. He emphasized that companies employing deceptive tactics, especially those targeting young people, will face consequences.

The FTC's primary allegations against Hoyoverse involve violations of the Children's Online Privacy Protection Rule (COPPA). Specifically, the FTC claims Hoyoverse marketed Genshin Impact to children, collected their personal data without proper consent, and misrepresented the odds of winning coveted "five-star" loot box prizes. The FTC further argues that the game's virtual currency system was designed to be confusing and unfair, concealing the high cost of obtaining these prizes and leading to substantial spending by children.

In addition to the financial penalty and the loot box sales restriction, the settlement mandates that Hoyoverse:

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