Hadlee Simons / Android Authority
TL;DR
- The FTC fined Genshin Impact developer HoYoverse $20 million for misleading loot box practices and violating children’s privacy laws.
- The game allegedly deceived players about the cost and odds of obtaining rare prizes and collected data from children under 13 without parental consent.
- HoYoverse must now block purchases by children under 16 without parental approval, disclose loot box odds, and comply with stricter privacy rules.
The Federal Trade Commission (FTC) has reached a settlement with the makers of Genshin Impact over allegations of deceptive marketing practices and violations of children’s privacy laws. The agreement requires Cognosphere, also known as HoYoverse in the US, to pay $20 million and implement strict changes to its policies.
An FTC press release on Friday accused the popular game developer of misleading children and other players about the cost and odds of obtaining rare in-game rewards, known as “five-star” loot box prizes. The complaint also alleged that HoYoverse violated the Children’s Online Privacy Protection Act (COPPA) by collecting personal data from children under 13 without parental consent.
The FTC’s complaint also highlighted how the game’s vibrant anime-style graphics and child-like characters appealed directly to younger audiences. Combined with aggressive promotional tactics and confusing virtual currency systems, these practices allegedly misled players into overspending on in-game purchases.
Robert Triggs / Android Authority
“Genshin Impact deceived children, teens, and other players into spending hundreds of dollars on prizes they stood little chance of winning,” said Samuel Levine, director of the FTC’s Bureau of Consumer Protection.
As part of the settlement, HoYoverse will have to implement several new practices. These include blocking children under 16 from purchasing loot boxes without parental consent, disclosing loot box odds and virtual currency exchange rates, offering players a direct payment option for loot boxes, and deleting data collected from children under 13 unless parental consent is obtained.
The settlement still requires federal court approval, but it serves as a warning to game developers who employ shady tactics to target children and teens.
