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 win probabilities. He emphasized that companies employing deceptive tactics, especially targeting young players, will face consequences.

The FTC's allegations against Hoyoverse include violations of the Children's Online Privacy Protection Rule (COPPA) through marketing to children and collecting their personal information. They further allege deception regarding the odds of obtaining "five-star" loot box prizes and the overall cost involved. The FTC claims Genshin Impact's virtual currency system was confusing and unfair, obscuring the high cost of acquiring "five-star prizes" and leading to substantial spending by children.

As part of the settlement, besides the fine and the ban, 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.