UPDATED: FTC Bans Genshin Impact's HoYoVerse From Selling Lootboxes To Teens Under 16, Adds $20 Million Fine

Today, the FTC (US Federal Trade Commission) announced a settlement with Genshin Impact developer HoYoVerse (Cognosphere) regarding marketing loot boxes to children. According to the announcement, HoYo, which specializes in gacha-based action RPG games, agreed to pay a $20 million fine and block children under the age of 16 from making purchases in their games. This follows allegations that the company had violated the Children’s Online Privacy Protection Rule (COPPA) and “deceived players about the odds” of obtaining five-star characters. The announcement refers to them as ‘”five-star” loot box prizes’. It also states that players were deceived as to “how much it would cost to open loot boxes to win the prizes”.

The complaint goes on to state that the purchasing process “obscures the reality that consumers must spend large amounts of real money” to get the five-star characters. Note that we’re assuming they mean characters as the announcement states “five-star prizes”, and both characters and weapons have five-star categories. It goes on to state that the complaint called the purchasing system “challenging and confusing, particularly for children and teens”.

As for the COPPA violation, the complaint states that Genshin Impact “is a child-directed online service that collects personal information from children under 13”. This means that the company is required to notify parents about the information collected from children and obtain consent to collect their data. The company is alleged to have been aware that children were playing the game and to have collected information on them anyway.

The current settlement agreement with the FTC has yet to be finalized as it still needs to be approved by a federal judge. The full agreement can be found in the announcement on the FTC site.

UPDATE 1/18/2025: Cognosphere added a statement regarding the settlement to their official site. In part, while the company feels many of the FTC's allegations are false, they "agreed to this settlement because we value the trust of our community and share a commitment to transparency for our players."

In full, the company states, "Animation-style games and shows are well-received by global audiences and players across various ages. Genshin Impact is a popular free-to-play, anime-style game designed for older teens and adults. 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. 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."