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 settlement, 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 the company's practices, alleging that Genshin Impact misled players, particularly children and teens, into spending significant sums on in-game items with low odds of winning. He emphasized the FTC's commitment to holding companies accountable for deceptive practices targeting young players.

The FTC's primary allegations against Hoyoverse center on violations of the Children's Online Privacy Protection Rule (COPPA). The agency claims Hoyoverse marketed Genshin Impact to children, collected their personal information without proper consent, and misrepresented the odds of obtaining valuable "five-star" loot box prizes. The FTC further alleges the game's virtual currency system was designed to be confusing and unfair, leading to substantial spending by players, including children, in pursuit of these rare items.

In addition to the financial penalty and the ban on loot box sales to minors, the settlement requires Hoyoverse to:

• Publicly disclose the odds of winning loot boxes and the exchange rates for virtual currency.
• Delete personal information collected from children under 13.
• Ensure future compliance with COPPA regulations.

This settlement underscores the FTC's increased scrutiny of in-game purchases and the protection of children's online privacy.