Genshin Impact Developer Fined $20M for Loot Box Issues

Hoyoverse, the publisher of Genshin Impact, has reached a settlement with the United States Federal Trade Commission (FTC), agreeing to pay a $20 million fine and prohibiting sales of lootboxes to teenagers under the age of 16. In an official press release, the FTC stated that as part of the settlement, Hoyoverse will block children under 16 from making in-game purchases without parental consent.

FTC Director of the Bureau of Consumer Protection, Samuel Levine, highlighted that Genshin Impact misled children, teens, and other players into spending hundreds of dollars on prizes with slim chances of being won. He emphasized that companies employing such deceptive practices will face accountability, particularly when targeting young audiences.

The primary allegations against Hoyoverse by the FTC involve the developer allegedly violating the Children’s Online Privacy Protection Rule (COPPA). The FTC claims that Hoyoverse marketed Genshin Impact to children, collected their personal data, and misrepresented the odds of winning "five-star" lootbox prizes while obscuring the costs associated with opening them. Furthermore, the FTC argued that the game’s virtual currency system was confusing and unfair, masking the reality that players would eventually spend significant sums to obtain high-tier rewards, with some children reportedly spending hundreds to thousands of dollars in pursuit of these prizes.

In addition to the financial penalty and purchase restrictions, Hoyoverse must disclose lootbox odds and virtual currency exchange rates, delete personal information collected from children under 13, and adhere to COPPA regulations moving forward.