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.

In an FTC press release, the agency stated that Hoyoverse will pay the fine and implement measures to prevent underage in-app purchases. This follows allegations that the company misled players, particularly children and teenagers, into spending significant sums on in-game items with low odds of winning.

FTC Bureau of Consumer Protection Director Samuel Levine criticized Hoyoverse's "dark pattern tactics," emphasizing that companies employing deceptive practices, especially targeting minors, will face consequences.

The FTC's primary claims against Hoyoverse involve violations of the Children's Online Privacy Protection Rule (COPPA). The agency alleges that Hoyoverse marketed Genshin Impact to children, collected their personal data without proper consent, and misrepresented the odds of winning high-value 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 unexpected, spending by players, especially children.

As part of the settlement, besides the financial penalty and the sales restriction, Hoyoverse must publicly disclose loot box odds and virtual currency exchange rates, delete personal information collected from children under 13, and ensure future compliance with COPPA regulations.