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 addresses allegations that Hoyoverse violated the Children's Online Privacy Protection Rule (COPPA) and engaged in deceptive practices related to in-game purchases.

The FTC's press release details the settlement, stating that Hoyoverse will pay a $20 million fine and prohibit in-app purchases by users under 16 without parental consent. FTC Bureau of Consumer Protection Director Samuel Levine criticized Hoyoverse's practices, stating they misled players, particularly children and teens, into spending significant sums on in-game prizes with low odds of winning. He emphasized that companies employing such "dark patterns" will face consequences.

The FTC's complaint alleges that Hoyoverse violated COPPA by collecting personal information from children without parental consent and deceptively marketed Genshin Impact to minors. Further, the FTC contends that Hoyoverse obscured the odds of winning "five-star" loot box prizes and the overall cost of obtaining them, leading to substantial spending by children. The confusing and unfair virtual currency system, according to the FTC, masked the high cost of acquiring these prizes.

In addition to the financial penalty and the restriction on underage purchases, the settlement requires Hoyoverse to:

• Publicly disclose the odds of winning loot box prizes and the exchange rates for virtual currency.
• Delete personal information collected from children under 13.
• Comply with COPPA regulations moving forward.

This settlement underscores the FTC's commitment to protecting children online and holding companies accountable for deceptive marketing and data privacy violations.