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, agreeing to pay a $20 million penalty and prohibiting the sale of loot boxes to minors under the age of 16.

In a statement released by the FTC, the agency confirmed that the creators of Genshin Impact "have agreed to pay $20 million and to prevent children under 16 from making in-game purchases without parental approval," as part of the agreement with the Federal Trade Commission.

Samuel Levine, Director of the FTC’s Bureau of Consumer Protection, stated that Genshin Impact "misled children, teenagers, and other players into spending hundreds of dollars on prizes they had little chance of winning." He emphasized that companies using "dark-pattern tactics" to manipulate players, especially young users, "will be held accountable."

The FTC’s primary allegations against Hoyoverse include claims that the developer violated the Children's Online Privacy Protection Rule by targeting children in its marketing and collecting their personal data. The agency also accused the company of misleading players about the odds of winning "five-star" loot box rewards and the actual cost of opening loot boxes.

The FTC argues that the game’s virtual currency system was intentionally confusing and unfair, masking the fact that players would ultimately spend significant amounts of money to obtain "five-star" items. Many children have reportedly spent hundreds or even thousands of dollars in pursuit of these rewards.

As part of the settlement, Hoyoverse must disclose loot box odds and virtual currency exchange rates, delete personal information collected from children under 13, and comply with COPPA regulations moving forward.