Genshin Impact Developer Agrees to $20M Fine Over Loot Box Violations

Hoyoverse, the publisher of the popular game Genshin Impact, has reached a $20 million settlement with the Federal Trade Commission (FTC). The settlement includes a ban on selling loot boxes to players under 16 without parental consent.

In an FTC press release, the agency stated that Hoyoverse will pay the fine and implement measures to prevent underage in-app purchases. This follows allegations that the company misled players, particularly children and teenagers, regarding the odds of winning valuable in-game items ("five-star" prizes) from loot boxes. The FTC contends that the system's design and lack of transparency encouraged excessive spending.

Samuel Levine, Director of the FTC's Bureau of Consumer Protection, emphasized that companies employing deceptive practices, especially those targeting young players, will face consequences. The FTC's charges against Hoyoverse center on violations of the Children's Online Privacy Protection Rule (COPPA) through the collection of children's personal information and deceptive marketing practices concerning loot box odds and costs.

As part of the settlement, Hoyoverse must:

• Pay a $20 million fine.
• Prevent in-app purchases by users under 16 without parental consent.
• Clearly disclose loot box odds and virtual currency exchange rates.
• Delete personal information collected from children under 13.
• Comply with all COPPA regulations moving forward.

The FTC's action highlights the increasing scrutiny of in-game purchases and the protection of children online. The settlement serves as a warning to other game developers regarding transparent pricing and marketing practices.