Genshin Impact maker fined $20m over ‘deceptive’ loot boxes and child privacy violation
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.
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.