Genshin Impact's Developer Fined $20M for Loot Box Issues

Genshin Impact's publisher, Hoyoverse, has reached a significant settlement with the United States Federal Trade Commission (FTC), agreeing to a $20 million fine. As part of this settlement, Hoyoverse is now prohibited from selling loot boxes to individuals under the age of 16 without obtaining parental consent. This decision follows an FTC investigation which found that the game's mechanics and marketing practices were potentially harmful to young players.

In a press release, the FTC detailed that Hoyoverse's agreement includes not only the substantial fine but also measures to protect younger audiences. Samuel Levine, the Director of the FTC's Bureau of Consumer Protection, criticized Genshin Impact for misleading its players, particularly children and teenagers, into spending significant amounts of money on in-game purchases with little chance of winning desired prizes. Levine emphasized that companies using deceptive tactics, especially those targeting young audiences, would face consequences.

The FTC's charges against Hoyoverse include violations of the Children's Online Privacy Protection Rule (COPPA). The agency alleges that Hoyoverse marketed Genshin Impact to children, collected their personal information without proper consent, and misled players about the odds and costs associated with winning "five-star" loot box prizes. The FTC further criticized the game's virtual currency system as confusing and unfair, pointing out that it obscures the true cost of acquiring these high-value items, leading some children to spend hundreds or even thousands of dollars.

In addition to the fine and the ban on selling loot boxes to minors without parental consent, Hoyoverse is required to take several steps to rectify their practices. These include disclosing the odds of winning prizes from loot boxes and the exchange rates for their virtual currency, deleting personal information collected from children under 13, and ensuring compliance with COPPA rules moving forward. These measures aim to create a safer and more transparent gaming environment for all players, especially the younger ones.