The US Federal Trade Commission (FTC) announced that Genshin Impact publisher Cognosphere has been ordered to pay a $20 million fine, which the publisher agreed to. The payment will settle FTC allegations that the company violated a children’s privacy law and deceived children and other users about the real costs of in-game transactions and odds of obtaining rare prizes, otherwise known as gacha.
Going forward, Cognosphere will be:
- Prohibited from allowing children under 16 to purchase loot boxes in their video games without a parent’s affirmative express consent
- Prohibited from selling loot boxes using virtual currency without providing an option for consumers to purchase them directly with real money
- Prohibited from misrepresenting loot box odds, prices and features
- Required to disclose loot box odds and exchange rates for multi-tiered virtual currency
- Required to delete any personal information previously collected from children under 13 unless they obtain parental consent to retain such data
- Required to comply with COPPA including its notice and consent requirements.
FTC Bureau of Consumer Protection Samuel Levine said, “Genshin Impact deceived children, teens, and other players into spending hundreds of dollars on prizes they stood little chance of winning. 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.”
Although Cognosphere agreed to pay the fine, the company believes that many of the FTC’s allegations are inaccurate. They’ve agreed to the settlement because they value the trust of the Genshin Impact community and share a commitment to being transparency with players. New age-gate and parental consent protections will be implemented in the coming months in the US, along with more in-game disclosures.
“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.”
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