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 also 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's allegations against Hoyoverse include violating the Children's Online Privacy Protection Rule (COPPA) by marketing to children and collecting their personal information without consent. They also allege Hoyoverse deceptively presented the odds of obtaining "five-star" loot box prizes and the actual cost involved.
The FTC contends Genshin Impact's virtual currency system was confusing and unfair, obscuring the high cost of acquiring "five-star prizes" and resulting in children spending hundreds or thousands of dollars.
In addition to the fine and sales restrictions, the settlement requires Hoyoverse to 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.
