Genshin Impact Developer Fined $20M for Loot Box Issues

Genshin Impact's publisher, Hoyoverse, has reached a settlement with the United States Federal Trade Commission (FTC), agreeing to a $20 million fine and a ban on selling loot boxes to individuals under the age of 16. According to the FTC's press release, Hoyoverse has committed to "pay $20 million and to block children under 16 from making in-game purchases without parental consent" as part of this settlement.

Samuel Levine, Director of the FTC's Bureau of Consumer Protection, stated that Genshin Impact had "deceived children, teens, and other players into spending hundreds of dollars on prizes they stood little chance of winning." He emphasized that companies employing "these dark-pattern tactics will be held accountable," particularly when they deceive young players.

The FTC's main allegations against Hoyoverse include violations of the Children's Online Privacy Protection Rule (COPPA). The developer is accused of marketing Genshin Impact to children, collecting their personal information, and misleading 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 claims that the virtual currency system within Genshin Impact is confusing and unfair, masking the true cost to players, particularly children, who have spent significant sums trying to obtain these "five-star prizes."

As part of the settlement, Hoyoverse is required to disclose the odds of winning loot box prizes and the exchange rates for its virtual currency. Additionally, the company must delete any personal information collected from children under 13 and ensure compliance with COPPA rules moving forward.