Genshin Impact's HoYoverse Fined $20M Over Loot Boxes

Genshin Impact's publisher, HoYoverse, has reached a settlement with the United States Federal Trade Commission, agreeing to a $20 million fine and a ban on selling loot boxes to players under the age of 16.

In a press release, the FTC stated that the creators of Genshin Impact "have agreed to pay $20 million and restrict in-game purchases by children under 16 without parental consent," as part of the agreement with the Federal Trade Commission.

Samuel Levine, Director of the FTC's Bureau of Consumer Protection, stated that the game "misled children, teenagers, and other players into spending hundreds of dollars on rewards with extremely low odds of being obtained." Levine emphasized that companies employing "these deceptive practices will face consequences" for misleading players, particularly minors.

The FTC's primary allegations against HoYoverse include violations of the Children's Online Privacy Protection Rule by targeting Genshin Impact to underage audiences and collecting their personal data. The agency also claims the company misrepresented the probability of obtaining five-star loot box rewards and obscured the actual cost of opening loot boxes.

According to the FTC, Genshin Impact's virtual currency system was unclear and unfair, masking the fact that players often spend substantial sums to acquire five-star items, with some minors spending hundreds or even thousands of dollars in pursuit of these rewards.

In addition to the financial penalty and sales restrictions, HoYoverse must now disclose loot box probabilities and virtual currency exchange rates, delete personal information collected from users under 13, and adhere to COPPA regulations moving forward.