Genshin Impact Developer Fined $20M for Loot Box Issues

Genshin Impact's 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 teenagers under the age of 16. The FTC's press release highlighted that Hoyoverse has committed to "pay $20 million and to block children under 16 from making in-game purchases without parental consent" as part of this settlement.

Samuel Levine, the Director of the FTC's Bureau of Consumer Protection, criticized Hoyoverse for deceiving "children, teens, and other players into spending hundreds of dollars on prizes they stood little chance of winning." Levine emphasized that companies employing "these dark-pattern tactics will be held accountable," especially when they target young audiences.

The FTC's primary allegations against Hoyoverse include violations of the Children's Online Privacy Protection Rule (COPPA) by marketing Genshin Impact to children and collecting their personal information. Additionally, the FTC accused Hoyoverse of misleading players about the odds of obtaining "five-star" loot box prizes and the costs associated with opening these loot boxes.

The FTC further criticized Genshin Impact's virtual currency system, describing it as confusing and unfair. They argue that the system hides the true cost of acquiring "five-star prizes," leading to children spending significant sums of money, often reaching into the hundreds or thousands of dollars.

As part of the settlement, Hoyoverse is not only facing the fine and the ban but also required to disclose loot box odds and the exchange rates for its virtual currency. They must also delete any personal information collected from children under 13 and ensure compliance with COPPA rules moving forward.