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 by those 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 win probabilities. He emphasized the FTC's commitment to holding companies accountable for deceptive practices, especially those targeting young people.

The FTC alleges Hoyoverse violated the Children's Online Privacy Protection Rule (COPPA) by marketing to children and collecting their personal information without proper consent. Further allegations include deceptive practices regarding the odds of winning "five-star" loot box prizes and the actual cost of obtaining them. The FTC contends Genshin Impact's virtual currency system was confusing and unfair, obscuring the high cost of acquiring desirable prizes and resulting in 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.