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The U.S. Federal Trade Commission (FTC) has fined Cognosphere, known globally as HoYoverse, $20 million for violating the Children’s Online Privacy Protection Act (COPPA) and misleading players about the costs and odds associated with in-game loot boxes in Genshin Impact. The settlement introduces substantial changes to how the game operates, particularly for younger players.
The FTC’s investigation revealed that Genshin Impact was marketed to children under 16, collecting personal information without proper parental consent, violating COPPA. Players were reportedly misled by a convoluted virtual currency system that obscured the actual costs of acquiring rare items, with some spending significant amounts on low-probability rewards.
In their report, Samuel Levine, Director of the FTC’s Bureau of Consumer Protection, condemned the use of “dark patterns” in the game’s design, which are deceptive user interfaces designed to manipulate users into making unintended purchases. Levine noted that such practices, especially those targeting minors, will be held accountable.
As part of the settlement, HoYoverse must:
- Ensure children under 16 cannot purchase loot boxes without parental approval.
- Offer direct purchase options for loot boxes using real money.
- Clearly disclose the odds and exchange rates for obtaining items.
- Delete any data collected from children under 13 without parental consent.
While HoYoverse accepted the settlement, they disputed many of the FTC’s claims, affirming their commitment to transparency and trust with their players. They plan to implement new parental controls and enhance in-game disclosures for U.S. players.
This settlement reflects the growing scrutiny on loot boxes in the gaming industry, following similar cases like Epic Games in 2022. The mandated changes are expected to significantly affect Genshin Impact’s monetization strategies, particularly for younger audiences.
