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 users 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 without parental authorization. FTC Bureau of Consumer Protection Director Samuel Levine criticized Hoyoverse's practices, alleging the company misled players, particularly children and teens, into spending significant sums on in-game prizes with low win probabilities. He emphasized that companies employing such deceptive tactics will face consequences.

The FTC's primary accusations against Hoyoverse involve violations of the Children's Online Privacy Protection Rule (COPPA). The agency alleges 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 contends that the game's virtual currency system was designed to be confusing and unfair, leading players to unknowingly spend large amounts of money on these prizes. Children, according to the FTC, have spent hundreds or even thousands of dollars in pursuit of these rare items.

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 information collected from children under 13, and ensure future compliance with COPPA regulations.