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 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 they misled players, particularly children and teens, into spending significant sums on in-game items with low winning probabilities. He emphasized the FTC's commitment to holding companies accountable for deceptive "dark pattern" 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 valuable "five-star" loot box prizes. The FTC further argues that the game's virtual currency system was deliberately confusing, obscuring the high cost of obtaining these prizes and leading children to spend hundreds or even thousands of dollars.

As part of the settlement, besides the financial penalty and the sales restriction, Hoyoverse must publicly disclose loot box odds and virtual currency exchange rates, delete personal data collected from children under 13, and ensure future compliance with COPPA regulations.