Genshin Impact: $20M Settlement for 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.

The FTC's press release states that Hoyoverse will pay the fine and implement measures to prevent underage in-app purchases. This action follows allegations that the company misled players, particularly children and teens, regarding the odds of winning valuable in-game items ("five-star" prizes) from loot boxes, and the overall cost involved.

Samuel Levine, Director of the FTC's Bureau of Consumer Protection, criticized Hoyoverse's "dark pattern tactics," stating that companies employing deceptive practices, especially those targeting young players, will face consequences.

The FTC's primary claims against Hoyoverse center on violations of the Children's Online Privacy Protection Rule (COPPA). Specifically, the FTC alleges that Hoyoverse marketed Genshin Impact to children, collected their personal data without proper consent, and misrepresented the probabilities and costs associated with loot box rewards. The FTC contends that the game's virtual currency system was designed to be confusing and unfair, leading to significant, often substantial, expenditures by young players.

In addition to the financial penalty and sales restrictions, the settlement mandates that Hoyoverse:

• 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 all COPPA regulations moving forward.