Genshin Impact Maker Settles $20M for Loot Box Probe

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) and the overall cost of obtaining them.

Samuel Levine, Director of the FTC's Bureau of Consumer Protection, criticized Hoyoverse's practices, stating that the company employed "dark-pattern tactics" that deceived players into spending significant sums of money with little chance of winning desirable prizes. He emphasized that companies using such tactics will face consequences.

The FTC's primary accusations against Hoyoverse involve violations of the Children's Online Privacy Protection Rule (COPPA). Specifically, the FTC alleges that Hoyoverse marketed Genshin Impact to children, collected their personal information without proper consent, and misrepresented the odds and costs associated with loot boxes. The FTC contends that the game's virtual currency system was designed to be confusing and unfair, leading to substantial spending by children.

As part of the settlement, besides the financial penalty and the loot box sales restriction, Hoyoverse must:

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

This settlement serves as a warning to game developers employing potentially deceptive practices targeting young players.