Genshin Impact Developer Fined $20M for Loot Box Issues

Genshin Impact publisher Hoyoverse has reached a significant settlement with the United States Federal Trade Commission (FTC), agreeing to pay a $20 million fine and to cease selling loot boxes to individuals under the age of 16. In an official press release, the FTC detailed that Hoyoverse, the developers behind the popular game Genshin Impact, will now require parental consent for in-game purchases made by children under 16.

Samuel Levine, the Director of the FTC's Bureau of Consumer Protection, highlighted the deceptive practices used by Hoyoverse, stating that the company misled children, teenagers, and other players into spending substantial sums of money on prizes with low winning odds. Levine emphasized that companies employing such "dark-pattern tactics" will face consequences, particularly when they target vulnerable young audiences.

The FTC's main 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 without proper consent, and misled players regarding the odds and costs associated with winning "five-star" loot box prizes. The FTC criticized the game's virtual currency system as confusing and unfair, arguing that it obscured the true cost of obtaining high-value items, leading children to spend hundreds or even thousands of dollars in pursuit of these prizes.

As part of the settlement, Hoyoverse is not only facing the hefty fine and the ban on selling loot boxes to minors, but they are also mandated to disclose the odds of loot box contents and the exchange rates for their virtual currency. Additionally, the company must delete personal information collected from children under 13 and ensure compliance with COPPA regulations moving forward.