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 states that Hoyoverse will pay the fine and implement measures to prevent underage in-app purchases. This action follows allegations that the company misled players, particularly children and teens, regarding the odds of winning valuable in-game items ("five-star" prizes) from loot boxes and the overall cost involved. The FTC claims these practices violated the Children's Online Privacy Protection Rule (COPPA) by collecting personal information from children without proper parental consent.

Samuel Levine, Director of the FTC's Bureau of Consumer Protection, emphasized that companies employing deceptive "dark pattern" tactics will face consequences. The FTC alleges that Genshin Impact's virtual currency system was deliberately confusing, obscuring the high cost of obtaining rare items and leading to significant spending by young players.

As part of the settlement, Hoyoverse must:

• Pay a $20 million fine.
• Prohibit loot box sales to children under 16 without parental consent.
• Clearly disclose loot box odds and virtual currency exchange rates.
• Delete personal information collected from children under 13.
• Ensure future compliance with COPPA regulations.

This settlement underscores the FTC's commitment to protecting children and holding companies accountable for deceptive marketing practices in the gaming industry.