FTC settlement order bans sales of Genshin Impact loot boxes to kids under 16 without their parents' consent

If you don’t know what a loot box is, just ask any kid in your life to explain it. While you’re at it, ask them about the video game Genshin Impact. Then tell them about why the FTC just sued the game’s developer HoYoverse (Cognosphere Pte. Ltd and Cognosphere, LLC) for its confusing loot box system that costs players a LOT of money.

Free-to-play video games often make money by selling things like characters, weapons, or in-game currency. For players of games like Genshin Impact, getting the most popular (and most advertised) characters or gear meant buying “loot boxes” — virtual mystery boxes that may (or may not) have what you want. The problem? According to the FTC, to get loot boxes in the game, you had to make a confusing series of in-game purchases — involving bundles of currency that had to be exchanged multiple times for different currencies. What’s more, the FTC says, the game misled players about the odds of getting many of their most coveted prizes. Many players (including kids and teens) racked up hundreds and even thousands of dollars trying their luck.

Thanks to a settlement with the FTC, HoYoverse will no longer sell loot boxes to kids under 16 without their parents’ consent, and will make sure kids under 13 get the protection of the Children’s Online Privacy Protection Act. The company will also make clear how much each loot box costs in real money and what the odds are of getting each prize.

Tell the FTC about fraud, scams, and bad business practices at ReportFraud.ftc.gov.