FTC Fines Genshin Impact’s HoYoVerse, Bans Under-16 Lootbox Sales

A recent announcement by the FTC (U.S. Federal Trade Commission) revealed a settlement reached with Genshin Impact developer, HoYoVerse (Cognosphere), over accusations of marketing loot boxes to minors. As specialists in gacha-based action RPG games, HoYo assented to a $20 million fine and agreed to bar players aged 15 and below from making in-game purchases. The settlement was driven by allegations against HoYo for breaching the Children’s Online Privacy Protection Rule (COPPA) and for misguiding players about the possibility of scoring five-star characters. The company reportedly also misled players regarding the actual cost needed to open loot boxes to secure the coveted prizes.

The filed complaint further contends that the shopping process “camouflages the underlying fact that shoppers must shell out considerable real currency” to bag the five-star characters. The phrase “five-star prizes” as per the announcement could connote characters, as both characters and arsenals inhabit five-star divisions. The complaint subsequently described the buying system as “complex and ambiguous, particularly for underage and teenage players”.

The COPPA breach allegation claims that Genshin Impact “serves as a kid-oriented online platform that amasses personal data from children below 13”. Consequently, the company is expected to inform parents about the type of information collected from their offspring and gain approval to gather such data. The manufacturer is purported to have known that minors were engaging with the game and still went ahead to collect data about them.

The FTC’s agreement with HoYo has yet to receive finalization as it’s pending approval by a federal judge. You can access the complete agreement document on the FTC’s website.