Genshin Impact Dev Settles $20M Loot Box Fine

Genshin Impact 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 individuals under the age of 16. According to the FTC's press release, Hoyoverse, the creators of the popular game Genshin Impact, will also prevent children under 16 from making in-game purchases without parental consent.

Samuel Levine, the Director of the FTC's Bureau of Consumer Protection, criticized Hoyoverse for misleading practices, stating that the company "deceived children, teens, and other players into spending hundreds of dollars on prizes they stood little chance of winning." Levine emphasized the FTC's commitment to holding companies accountable for using "dark-pattern tactics" that deceive players, particularly young children and teenagers.

The FTC's allegations against Hoyoverse include violations of the Children's Online Privacy Protection Rule. They claim that Hoyoverse marketed Genshin Impact to children, collected their personal information, and misled players about the odds of winning highly coveted "five-star" loot box prizes, as well as the costs associated with opening these loot boxes.

The FTC also pointed out that Genshin Impact's virtual currency system is confusing and unfair, obscuring the fact that players may end up spending significant amounts of money to acquire "five-star prizes." They noted that children have spent hundreds to thousands of dollars in attempts to win these prizes.

As part of the settlement, in addition to the fine and the ban on loot box sales to minors, Hoyoverse must disclose the odds and exchange rates for its virtual currency, delete any personal information collected from children under 13, and ensure compliance with the Children's Online Privacy Protection Act (COPPA) moving forward.