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 also block in-app purchases for users under 16 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 odds of winning. He emphasized that companies employing deceptive practices, especially targeting young players, will face consequences.

The FTC's allegations against Hoyoverse include violating the Children's Online Privacy Protection Rule (COPPA) by marketing to children and collecting their personal information without proper consent. The FTC further alleges Hoyoverse deceived players about the odds of winning "five-star" loot box prizes and the overall cost of obtaining them. The agency claims Genshin Impact's virtual currency system was designed to be confusing and unfair, obscuring the high cost of acquiring desirable items and leading to substantial spending by children.

As part of the settlement, besides the fine and the ban on loot box sales to minors, 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.