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The publisher of Genshin Impact has agreed to pay a $20 million fine and implement stricter protection for children after a ruling from the Federal Trade Commission (FTC). The original complaint accused Genshin Impact of violating the Children’s Online Privacy Protection Act (COPPA) and appealing directly to children while marketing gambling-like mechanics in the form of loot boxes.
The complaint alleges HoYoverse of seeking out influencers that made Minecraft and Roblox content in order to better reach a young audience and appealing to children with its lineup of “child-like” heroes in the “Cute Force” ad for the game.
Although HoYoverse — also known as Cognosphere — has accepted the fine, the company says the FTC is incorrect about many allegations. Several other major changes are coming as part of the agreement, including a restriction that prevents anyone under the age of 16 from making a purchase with parental consent.
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Users will be able to buy loot boxes directly with real money, rather than converting to a digital currency, and all loot box odds shown to players must be correct. HoYoverse has also been ordered to delete any personal information relating to children under 13, unless a parent gives consent to retain the data.
Genshin Impact is a free-to-play game available on most platforms, including iOS and Android, but it has generated more than $5 billion in revenue through microtransactions. According to a press release from the FTC, “This complicated system, according to the complaint, misleads consumers about the amount of money that players spend on loot boxes on an ongoing basis, and the amount of money that players would likely need to spend to obtain certain prizes.”
This isn’t the first time the FTC has targeted a company for loot boxes, either. Epic Games faced a similar settlement in 2022 regarding Fortnite’s mechanics. Although a federal judge must approve the order before it takes effect, the Federal Trade Commission has begun to take more proactive steps with regard to protection children from predatory sales tactics.
