Genshin Impact Maker Fined in Landmark Loot Box Case

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 teenagers, regarding the odds of winning coveted "five-star" prizes from loot boxes and the overall cost involved.

Samuel Levine, Director of the FTC's Bureau of Consumer Protection, criticized Hoyoverse's practices, stating that the company's "dark patterns" deceived players into spending significant sums of money with minimal chances of success. He emphasized that companies employing such tactics will face consequences.

The FTC's complaint centers on Hoyoverse's alleged violations of the Children's Online Privacy Protection Rule (COPPA). The agency claims the company marketed Genshin Impact to children, collected their personal information without proper consent, and misrepresented the odds and costs associated with loot box purchases. The FTC further alleges that the game's virtual currency system was deliberately confusing and unfair, leading children to spend hundreds or even thousands of dollars.

As part of the settlement, Hoyoverse must:

• Pay a $20 million fine.
• Prohibit loot box sales to children 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 all future COPPA regulations.

This settlement underscores the FTC's commitment to protecting children from exploitative in-game purchasing practices and highlights the potential legal ramifications for companies employing deceptive marketing strategies.