MiHoYo Settles $20M Lawsuit Over Alleged Loot Box Violations

Hoyoverse, the publisher of the popular game Genshin Impact, has reached a $20 million settlement with the Federal Trade Commission (FTC). The settlement includes a ban on selling loot boxes to players under 16 without parental consent.

The FTC's press release details the agreement, stating Hoyoverse will pay the substantial fine and implement measures to prevent underage in-app purchases. This follows allegations that the company employed deceptive practices targeting children and teens, leading to significant, often unplanned, spending on in-game items.

Samuel Levine, Director of the FTC's Bureau of Consumer Protection, criticized Hoyoverse's tactics, characterizing them as "dark patterns" that misled players, particularly young people, into spending hundreds of dollars with minimal chances of winning desirable prizes. He emphasized the FTC's commitment to holding companies accountable for such deceptive practices.

The FTC's primary claims against Hoyoverse center on violations of the Children's Online Privacy Protection Rule (COPPA). The agency alleges Hoyoverse marketed Genshin Impact to children, collected their personal data without proper consent, and misrepresented the odds of winning rare "five-star" items from loot boxes. The FTC also argued the game's virtual currency system was deliberately confusing, obscuring the high cost of obtaining these coveted prizes and resulting in substantial financial losses for many young players.

As part of the settlement, in addition to the fine and the ban on loot box sales to minors, Hoyoverse must publicly disclose the odds of winning loot box prizes and the exchange rates for its virtual currency. They are also obligated to delete the personal information collected from children under 13 and ensure future compliance with COPPA regulations.