Genshin Impact’s publisher has met the long arm of the law in the courts against the Federal Trade Commission. Following a recent legal battle, the FTC has ordered Cognosphere (HoYoverse) to pay a $20 million settlement for ‘selling lootboxes to teens’. Also, the developer and publisher will be banned from selling such content to anyone under the age of 16.
Get the full results from this justice journey below.
‘Genshin Impact Deceived Children’
The FTC has ordered Genshin Impact’s publisher to pay a whopping $20 million in damages after a complaint was filed by the Department of Justice against the game’s lootbox mechanics.
In a statement issued by Samuel Levine, the Director of the FTC’s Bureau of Consumer Protection, it was explained:
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.
HoYoverse was never bashful about microtransactions and lootbox mechanics, making them a relatively integral part of the Genshin Impact experience. The game is inherently free-to-play, but this is how the publisher and developers make their money – by encouraging users of all ages to chase those five-star prizes.
In a follow-up statement, Cognosphere (HoYoverse) said:
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.
In addition to the dubious lootbox activities, HoYoverse was hit with COPPA violations after failing to comply with some of the key rules. For instance, the requirement for online services ‘directed to children under 13’ to notify their parents about the personal information they collect was flouted by the developer and publisher.
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.
Have you ever spent money on Genshin Impact and felt cheated? Let us know on the Insider Gaming forum.
For more Insider Gaming coverage, check out the news that Mobile Legends: Bang Bang has been banned in the US
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