Genshin Impact Maker Pays $20M for Loot Box Breaches

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. The FTC further alleges that Hoyoverse violated the Children's Online Privacy Protection Rule (COPPA) by collecting personal information from children without proper parental consent.

Samuel Levine, Director of the FTC's Bureau of Consumer Protection, emphasized that companies using deceptive "dark pattern" tactics will face consequences. He highlighted the significant sums spent by children and teens on Genshin Impact loot boxes, often with minimal chances of winning the desired prizes.

As part of the settlement, Hoyoverse must:

• Pay a $20 million fine.
• Prevent in-app purchases by users under 16 without parental consent.
• Clearly disclose loot box odds and virtual currency exchange rates.
• Delete personal information collected from children under 13.
• Comply with COPPA regulations moving forward.

The FTC's action underscores the importance of transparency and responsible practices in the gaming industry, particularly concerning the protection of children and adolescents.