Genshin Impact Developer Fined $20M for Loot Box Issues

Hoyoverse, the publisher behind the popular game Genshin Impact, has reached a settlement with the United States Federal Trade Commission (FTC), agreeing to pay a fine of $20 million. As part of this agreement, the company will also be prohibited from selling loot boxes to players under the age of 16 without obtaining parental consent. This decision was announced in a recent FTC press release, highlighting the agency's commitment to protecting young gamers.

Samuel Levine, the FTC Director of the Bureau of Consumer Protection, stated that Hoyoverse had engaged in deceptive practices, misleading children, teenagers, and other players into spending significant amounts of money on in-game purchases with little chance of winning desirable rewards. Levine emphasized that companies employing such "dark-pattern tactics" will face accountability, particularly when it involves vulnerable young audiences.

The FTC's main allegations against Hoyoverse include violations of the Children's Online Privacy Protection Rule (COPPA). The agency claims that Hoyoverse marketed Genshin Impact to children, collected their personal information without proper consent, and misled players about the odds and costs associated with winning "five-star" loot box prizes. The FTC further criticized the game's virtual currency system, describing it as confusing and unfair, and argued that it obscured the true cost of obtaining high-value rewards, leading children to spend hundreds or even thousands of dollars.

In addition to the fine and the ban on selling loot boxes to minors, Hoyoverse is required to take several corrective actions. These include disclosing the odds of winning prizes from loot boxes and the exchange rates for their virtual currency, deleting personal information collected from children under 13, and ensuring compliance with COPPA regulations moving forward.