Genshin Impact developer Hoyoverse has settled with the Federal Trade Commission (FTC), agreeing to a $20 million fine and a ban on selling loot boxes to children under 16. The FTC's press release states Hoyoverse will block in-app purchases for users under 16 without parental consent.
FTC Bureau of Consumer Protection Director Samuel Levine stated that Genshin Impact misled players, particularly children and teens, into spending significant sums on in-game prizes with low win probabilities. He emphasized that companies employing deceptive tactics, especially targeting young players, will face consequences.
The FTC alleges Hoyoverse violated the Children's Online Privacy Protection Rule (COPPA) by marketing to children and collecting their personal information without proper consent. They further allege deception regarding the odds of winning "five-star" loot box prizes and the actual cost of obtaining them. The FTC claims Genshin Impact's virtual currency system was confusing and unfair, masking the high cost of acquiring desirable items, leading to significant spending by children.
As part of the settlement, besides the fine and sales restriction, Hoyoverse must publicly disclose loot box odds and virtual currency exchange rates, delete personal data collected from children under 13, and ensure future compliance with COPPA regulations.
