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 "pay $20 million and block children under 16 from making in-game purchases without parental consent" as part of this settlement.

Samuel Levine, the Director of the FTC's Bureau of Consumer Protection, criticized Genshin Impact for misleading "children, teens, and other players into spending hundreds of dollars on prizes they stood little chance of winning." Levine emphasized that companies employing "these dark-pattern tactics will be held accountable," particularly when they target 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, and deceived players about the odds of winning "five-star" loot box prizes, as well as the costs associated with opening these loot boxes.

The FTC further asserts that Genshin Impact's virtual currency system is confusing and unfair, obscuring the true cost of obtaining "five-star prizes." This has led to children spending hundreds to thousands of dollars in pursuit of these rewards.

In addition to the fine and the ban, Hoyoverse is required to disclose the odds of loot box contents and the exchange rates for its virtual currency. The company must also delete personal information collected from children under 13 and ensure compliance with COPPA rules moving forward.