Genshin Impact developer Hoyoverse has agreed to a $20 million settlement with the Federal Trade Commission (FTC). This settlement includes a ban on selling loot boxes to players under 16 without parental consent.
In an FTC press release, the agency stated that Hoyoverse will pay the $20 million fine and implement measures to prevent underage purchases. This action follows allegations that the company misled players, particularly children and teens, regarding the odds of winning in-game prizes and the costs associated with loot boxes.
Samuel Levine, Director of the FTC's Bureau of Consumer Protection, stated that Genshin Impact's practices deceived players into spending significant sums on prizes with low win probabilities. He emphasized that companies employing deceptive tactics, especially those targeting young people, will face consequences.
The FTC's complaint alleges Hoyoverse violated the Children's Online Privacy Protection Rule (COPPA) by marketing to children and collecting their personal information without proper consent. Furthermore, the FTC claims the game's virtual currency system was designed to be confusing and unfair, obscuring the high cost of obtaining rare "five-star" prizes. The FTC highlighted instances of children spending hundreds or even thousands of dollars in pursuit of these prizes.
In addition to the fine and the ban on loot box sales to minors without parental consent, Hoyoverse must disclose loot box odds and virtual currency exchange rates, delete personal information collected from children under 13, and ensure future compliance with COPPA regulations.
