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. 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 items with low odds of winning.

The FTC's primary allegations against Hoyoverse center on 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 regarding the odds and costs associated with obtaining "five-star" loot box prizes. The FTC further contends that the game's virtual currency system was designed to be confusing and unfair, leading to substantial, often unforeseen, monetary expenditures by players.

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 data collected from children under 13, and ensure future compliance with COPPA regulations. This settlement underscores the FTC's commitment to holding companies accountable for deceptive practices targeting young players.