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.

In an FTC press release, the agency stated that Hoyoverse will pay the fine and implement measures to prevent underage in-app purchases. This follows allegations that the company engaged in deceptive practices.

Samuel Levine, Director of the FTC's Bureau of Consumer Protection, criticized Genshin Impact's practices, stating that the game misled players, particularly children and teens, into spending significant sums on virtual items with low odds of winning. Levine emphasized the FTC's commitment to holding companies accountable for using manipulative tactics.

The FTC's primary claims against Hoyoverse center on violations of the Children's Online Privacy Protection Rule (COPPA). The agency alleges that Hoyoverse marketed Genshin Impact to children, collected their personal data without proper consent, and misrepresented the odds of obtaining rare "five-star" loot box prizes. The FTC further contends that the game's virtual currency system was deliberately confusing, leading players to unknowingly spend large amounts of money.

In addition to the financial penalty and the sales restriction, Hoyoverse is obligated to: 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.