Genshin Impact Developer Fined $20M for Loot Box Issues

Hoyoverse, the publisher of the popular game Genshin Impact, has reached a settlement with the United States Federal Trade Commission (FTC). The agreement includes a $20 million fine and a prohibition on selling loot boxes to teenagers under the age of 16. According to the FTC's press release, Hoyoverse is required 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, 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 that companies employing "dark-pattern tactics" will face consequences, particularly when they target young audiences.

The FTC's primary allegations against Hoyoverse include violations of the Children's Online Privacy Protection Rule. The agency claims that Hoyoverse marketed Genshin Impact to children, collected their personal information, and misled players about the odds of winning "five-star" loot box prizes and the costs associated with opening loot boxes. The FTC also pointed out that the game's virtual currency system was confusing and unfair, masking the high costs players, including children, would incur to obtain these top-tier prizes, sometimes spending hundreds to thousands of dollars.

In addition to the fine and the ban on loot box sales to minors, Hoyoverse must comply with several other stipulations. The company is required to disclose the odds of winning from loot boxes and the exchange rates for its virtual currency. They must also delete any personal information collected from children under 13 and adhere to the Children's Online Privacy Protection Act (COPPA) rules moving forward.