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 highlights the agreement, stating Hoyoverse will pay the fine and implement measures to prevent underage in-app purchases without parental approval. Samuel Levine, Director of the FTC's Bureau of Consumer Protection, criticized Hoyoverse's practices, alleging deceptive marketing tactics that led players, particularly children and teens, to spend significant sums on in-game prizes with low odds of winning. He emphasized the FTC's commitment to holding companies accountable for employing such "dark patterns."

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 information without proper consent, and misled players about the odds of winning coveted "five-star" loot box prizes and the overall cost involved. The FTC further argues that the game's virtual currency system was designed to be confusing and unfair, obscuring the high cost of obtaining these prizes and resulting in substantial spending by children.

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.