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 states that Hoyoverse will pay the fine and implement measures to prevent underage in-app purchases. This action follows allegations that the company misled players, particularly children and teens, regarding the odds of winning in-game prizes and the overall cost of obtaining them.

Samuel Levine, Director of the FTC's Bureau of Consumer Protection, criticized Hoyoverse's "dark pattern tactics," stating that companies employing deceptive practices will face consequences. The FTC's primary claims center on Hoyoverse's alleged violation of the Children's Online Privacy Protection Rule (COPPA) by collecting personal information from children without proper parental consent, and deceptive marketing practices surrounding the odds of winning "five-star" loot box items.

The FTC argued that Genshin Impact's virtual currency system was designed to be confusing and unfair, leading players to unknowingly spend significant sums of money with little chance of winning desirable prizes. Children, the FTC noted, have reportedly spent hundreds or even thousands of dollars in pursuit of these prizes.

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

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