Genshin Impact maker fined $20m over ‘deceptive’ loot boxes and child privacy violation
Update: Cognosphere confirms it has reached a settlement with the FTC, plans new restrictions on Genshin Impact look box sales
Genshin Impact maker Cognosphere will pay a $20 million fine and change how it sells loot boxes in order to settle charges brought against it by the Federal Trade Commission (FTC).
The FTC has alleged that the company, which trades in the US as HoYoverse, is using deceptive tactics to hide the real cost of in-game transactions and players’ odds of obtaining rare prizes, and that it violated a children’s privacy law.
Under the terms of the settlement, which still needs to be approved by a federal judge before it can go into effect, HoYoverse will be required to stop selling loot boxes to players under the age of 16 without parental consent.
Update
In a statement, Cognosphere confirmed that it had reached a settlement with the FTC, but it said it believed that many of the allegation made by the US consumer protection agency were “inaccurate.”
“Animation-style games and shows are well-received by global audiences and players across various ages,” it said. “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 US in the coming months.”
The company will also be blocked from selling loot boxes using virtual currency unless there’s also an option for consumers to buy them directly with real money.
It will need to disclose loot box odds and exchange rates for multi-tiered virtual currency too.
And HoYoverse will have to delete any personal information previously collected from children under the age of 13 unless they obtain parental consent to retain it.
“Genshin Impact deceived children, teens, and other players into spending hundreds of dollars on prizes they stood little chance of winning,” said Samuel Levine, director of the FTC’s Bureau of Consumer Protection.
“Companies that deploy these dark-pattern tactics will be held accountable if they deceive players, particularly kids and teens, about the true costs of in-game transactions.”
Genshin Impact was originally released for PS4, PC and mobile devices in September 2020.
The open-world action RPG hit PS5 the following year before being released for Xbox Series X/S in late 2024.
