‘Genshin Impact Decieved Children’: Publisher Fined $20 Million For ‘Selling Lootboxes to Teens’

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In a court case involving Genshin Impact’s publisher, Cognosphere (HoYoverse), they have been confronted by legal action from the Federal Trade Commission (FTC). As a result of a recent legal dispute, the FTC has imposed a $20 million fine on Cognosphere and ordered them to cease selling loot boxes to minors. Furthermore, due to this ruling, Cognosphere will no longer be allowed to sell such content to individuals under 16 years old.

Get the full results from this justice journey below.

‘Genshin Impact Deceived Children’

Following a lawsuit filed by the Department of Justice, the Federal Trade Commission mandated that the company publishing Genshin Impact to settle for a substantial fine of $20 million due to concerns about their lootbox mechanics in the game.

According to an announcement made by Samuel Levine, head of the Consumer Protection Bureau at the Federal Trade Commission, he clarified the following points.

In a misleading manner, Genshin Impact led kids, teenagers, and other gamers to spend substantial amounts of money on rewards that had a minimal probability of being obtained.

Businesses using such underhanded strategies (dark patterns) for transactions within games will face consequences should they mislead users, especially minors, regarding the actual expenses associated with these in-game purchases.

HoYoverse has always been open about incorporating microtransactions and loot boxes into Genshin Impact, making them a significant aspect of the game’s overall feel. Although the game is free for everyone, this is how the publisher and developers generate income – by enticing players of all ages to aim for those premium five-star rewards.

In a follow-up statement, Cognosphere (HoYoverse) said:

Animation-based games and programs are widely appreciated by diverse audiences worldwide, including different age groups. One such example is Genshin Impact, a free-to-play game with an anime aesthetic that caters to older teens and adults. Although we find many of the FTC’s accusations unfounded, we opted for this settlement as we highly prioritize the trust of our community and aim for transparency in dealing with our players.

In accordance with our agreement, we plan to implement additional safeguards for kids and adolescents concerning age verification and parental approval, as well as enhance the transparency of virtual currencies and player rewards within our games for the U.S. market over the next few months.

Beyond the questionable loot box practices, HoYoverse faced COPPA violations due to non-compliance with certain fundamental rules. For example, they neglected to inform parents about the collection of personal data from online services intended for children under 13, which is a mandate that was disregarded by the company handling development and publication.

Going forward, the terms set out by the FTC are that Cognosphere is:

  • 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; and
  • Required to comply with COPPA including its notice and consent requirements.

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2025-01-19 11:47