Genshin Impact publisher Hoyoverse has reached a significant settlement with the United States Federal Trade Commission (FTC), agreeing to a $20 million fine and implementing a ban on selling loot boxes to teenagers under the age of 16. According to an FTC press release, Hoyoverse will "block children under 16 from making in-game purchases without parental consent" as part of this agreement.
Samuel Levine, the FTC Director of the Bureau of Consumer Protection, stated that Genshin Impact had "deceived children, teens, and other players into spending hundreds of dollars on prizes they stood little chance of winning." Levine emphasized that companies using "these dark-pattern tactics will be held accountable," particularly when they target young and vulnerable audiences.
The FTC's main allegations against Hoyoverse include violations of the Children's Online Privacy Protection Rule (COPPA). The agency claims that Hoyoverse marketed Genshin Impact to children, collected their personal information, and misled players about the odds of obtaining "five-star" loot box prizes, as well as the costs associated with opening these loot boxes.
The FTC further criticized the game's virtual currency system, describing it as confusing and unfair. They argue that the system hides the true cost of acquiring "five-star prizes," leading to children spending hundreds to thousands of dollars in pursuit of these rewards.
As part of the settlement, Hoyoverse is not only facing the fine and the ban but is also required to disclose loot box odds and the exchange rates for its virtual currency. Additionally, they must delete personal information collected from children under 13 and ensure compliance with COPPA rules moving forward.
