Genshin Impact Developer Fined $20M for Loot Box Issues

Genshin Impact's publisher, Hoyoverse, has reached a significant settlement with the United States Federal Trade Commission (FTC), agreeing to a $20 million fine and a ban on selling loot boxes to teenagers under the age of 16. In a press release, the FTC detailed that Hoyoverse will also be required to prevent children under 16 from making in-game purchases without parental consent as part of this agreement.

Samuel Levine, the Director of the FTC's Bureau of Consumer Protection, stated that Genshin Impact had misled children, teens, and other players, leading them to spend substantial sums of money on prizes with slim winning chances. Levine emphasized that companies employing such "dark-pattern tactics" would face accountability, particularly when targeting young audiences.

The FTC's allegations against Hoyoverse include violations of the Children's Online Privacy Protection Rule (COPPA). The agency claims that Hoyoverse marketed Genshin Impact to children, collected their personal information, and deceived players regarding the odds of winning "five-star" loot box prizes and the costs associated with opening them. The FTC highlighted the confusing and unfair nature of the game's virtual currency system, which they argue obscures the high costs players, especially children, incur to obtain these prized items, often spending hundreds to thousands of dollars.

In addition to the fine and the ban on loot box sales to minors under 16, Hoyoverse is mandated to disclose loot box odds and the exchange rates for its virtual currency, delete personal information collected from children under 13, and adhere to COPPA regulations moving forward.