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. In a press release, the FTC highlighted that Hoyoverse will block children under 16 from making in-game purchases without parental consent as part of this agreement.

Samuel Levine, the FTC Director of the Bureau of Consumer Protection, criticized Genshin Impact for misleading children, teens, and other players into spending substantial amounts on prizes with a low chance of winning. Levine emphasized that companies employing such "dark-pattern tactics" would face consequences, particularly when targeting young audiences.

The FTC's main 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 accuses Hoyoverse of deceiving players about the odds of winning "five-star" loot box prizes and the costs associated with opening these loot boxes.

The FTC argues that Genshin Impact's virtual currency system is confusing and unfair, masking the high costs players might incur to obtain "five-star prizes." This has led to children spending hundreds to thousands of dollars in pursuit of these rewards.

As part of the settlement, Hoyoverse must disclose the odds of winning from loot boxes and the exchange rates for its virtual currency. They are also required to delete personal information collected from children under 13 and ensure compliance with COPPA rules moving forward.