Genshin Impact Developer Agrees to $20M Fine Over Loot Box Violations

Genshin Impact developer Hoyoverse has settled with the Federal Trade Commission (FTC), agreeing to a $20 million fine and a ban on selling loot boxes to children under 16. The FTC's press release states Hoyoverse will block in-app purchases for minors without parental consent.

FTC Bureau of Consumer Protection Director Samuel Levine stated that Genshin Impact misled players, particularly children and teens, into spending significant sums on in-game prizes with low winning odds. He emphasized that companies employing deceptive tactics, especially targeting young people, will face consequences.

The FTC alleges Hoyoverse violated the Children's Online Privacy Protection Rule (COPPA) by marketing to children and collecting their personal information without proper consent. Further allegations include deceptive practices regarding the odds of obtaining "five-star" loot box prizes and the overall cost involved. The FTC contends the virtual currency system was confusing and unfairly obscured the high cost of acquiring these prizes, leading to significant spending by children.

In addition to the fine and sales restriction, Hoyoverse must disclose loot box odds and virtual currency exchange rates, delete personal information collected from children under 13, and ensure future compliance with COPPA regulations.