Hoyoverse agrees to $20 million settlement with FTC over loot boxes

Genshin Impact publisher Hoyoverse has settled with the U.S. Federal Trade Commission (FTC) to pay a $20 million fine and implement a ban on selling loot boxes to teenagers under 16.

That’s according to a press release by the FTC, which said the publisher “has agreed to pay $20 million and to block children under 16 from making in-game purchases without parental consent” as part of the settlement. 

“While we believe many of the FTC’s allegations are inaccurate, we agreed to this settlement because we value the trust of our community and share a commitment to transparency for our players,” said Genshin Impact publisher Cognosphere (Hoyoverse) in a statement. 

“Under the agreement, we will introduce new age-gate and parental consent protections for children and young teens and increase our in-game disclosures around virtual currency and rewards for players in the U.S. in the coming months.”

Holding companies accountable

The FTC charged Hoyoverse with violating the Children’s Online Privacy Protection Rule by marketing Genshin Impact to children, collecting their personal data, and misleading players about the odds of winning “five-star” loot box prizes and the costs to open loot boxes. 

In addition to a $20m fine and a ban on selling loot boxes to teens under 16, Hoyoverse must disclose loot box odds and exchange rates for virtual currency, delete personal data of children under 13, and comply with COPPA regulations.

Director of the FTC’s Bureau of Consumer Protection Samuel Levine added: “Genshin Impact deceived children, teens, and other players into spending hundreds of dollars on prizes they stood little chance of winning.” 

“Companies that deploy these dark-pattern tactics will be held accountable if they deceive players, particularly kids and teens, about the true costs of in-game transactions.”