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 $20 million fine and implement measures to prevent underage in-app purchases without parental authorization.

Samuel Levine, Director of the FTC's Bureau of Consumer Protection, criticized Genshin Impact's practices, alleging they misled players, particularly children and teens, into spending significant sums on in-game prizes with low win probabilities. He emphasized the FTC's commitment to holding companies accountable for employing deceptive tactics.

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 misrepresented the odds of winning coveted "five-star" loot box prizes, as well as the overall cost of obtaining them. The FTC argues the game's virtual currency system was designed to be confusing and unfair, leading to substantial, often unexpected, spending by players, especially children.

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

• Publicly 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.