Genshin Impact Developer Agrees to $20M Fine Over Loot Box Violations

Hoyoverse, the publisher of the popular mobile game Genshin Impact, has reached a $20 million settlement with the Federal Trade Commission (FTC). The settlement addresses allegations of deceptive practices targeting children and teenagers, including misleading loot box mechanics and violations of the Children's Online Privacy Protection Rule (COPPA).

The FTC's press release highlights Hoyoverse's agreement to pay the substantial fine and implement a ban on in-app purchases for users under 16 without parental consent. FTC Bureau of Consumer Protection Director Samuel Levine stated that the company's actions "deceived children, teens, and other players into spending hundreds of dollars on prizes they stood little chance of winning," condemning the use of "dark-pattern tactics."

The FTC's primary claims center on Hoyoverse's alleged violation of COPPA through the marketing and data collection practices involving underage players. Further accusations include deceptive representations of the odds of winning coveted "five-star" loot box prizes and the actual cost involved. The FTC alleges the game's virtual currency system was deliberately confusing, obscuring the significant financial investment required to obtain these rare items, leading to substantial spending by children.

As part of the settlement, Hoyoverse must not only pay the fine and implement the purchase restrictions but also clearly disclose loot box odds and virtual currency exchange rates. The company is further obligated to delete the personal information collected from children under 13 and ensure future compliance with COPPA regulations. This settlement serves as a strong warning to game developers employing potentially deceptive practices, particularly those targeting vulnerable young players.