Genshin Impact Fined Over Loot Boxes

Hoyoverse, the publisher of the popular game Genshin Impact, has reached a $20 million settlement with the Federal Trade Commission (FTC). This settlement includes a ban on selling loot boxes to players under 16 without parental consent.

The FTC's press release details the agreement, stating Hoyoverse will pay the fine and implement measures to prevent underage in-app purchases. FTC Bureau of Consumer Protection Director Samuel Levine criticized Hoyoverse's practices, alleging deceptive marketing tactics that led players, particularly children and teens, to spend significant sums on in-game prizes with low odds of winning.

The FTC's primary allegations against Hoyoverse center on violations of the Children's Online Privacy Protection Rule (COPPA). These violations allegedly involved marketing to children, collecting their personal information, and misleading players about loot box odds and costs. The FTC contends that Genshin Impact's virtual currency system was designed to be confusing and unfair, obscuring the high cost of obtaining desirable "five-star" prizes and resulting in substantial spending by children.

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