Genshin Impact Developer Fined $20M for Loot Box Issues

Hoyoverse, the publisher behind the popular game Genshin Impact, has reached a significant settlement with the United States Federal Trade Commission (FTC). As part of this agreement, Hoyoverse will pay a fine of $20 million and is prohibited from selling loot boxes to players under the age of 16 without parental consent. This decision comes after the FTC found that Hoyoverse's practices violated several regulations, impacting young players and their families.

In a press release, the FTC highlighted that Hoyoverse "has agreed to pay $20 million and to block children under 16 from making in-game purchases without parental consent." Samuel Levine, the Director of the FTC's Bureau of Consumer Protection, stated that Genshin Impact "deceived children, teens, and other players into spending hundreds of dollars on prizes they stood little chance of winning." Levine emphasized that the FTC will hold companies accountable for using "dark-pattern tactics" that mislead players, particularly young children and teens.

The FTC's main allegations against Hoyoverse include violations of the Children's Online Privacy Protection Rule (COPPA). The developer is accused of marketing Genshin Impact to children and collecting their personal information without proper consent. Additionally, the FTC claims that Hoyoverse deceived players about the odds of winning "five-star" loot box prizes and the costs associated with opening these loot boxes. The virtual currency system within Genshin Impact was described as confusing and unfair, leading to players, especially children, spending significant amounts of money in pursuit of rare prizes.

As part of the settlement, Hoyoverse is required to make several changes to its practices. These include disclosing the odds of winning loot box prizes and the exchange rates for its virtual currency, deleting personal information collected from children under 13, and ensuring compliance with COPPA rules moving forward. These measures aim to protect young players and ensure transparency in the game's monetization practices.