Genshin Impact maker agrees to pay $20m in FTC case accusing it of violating children's privacy and deceiving players

UPDATE 20/01/25: Cognosphere, the distributor of Genshin Impact, has officially responded to the FTC's complaint, stating it believes the allegations are "inaccurate" but it agreed to the settlement as it shares a "commitment to transparency for our players".

New protections will now be added to the game, such as parental consent for children and young teens.

The full statement shared with Eurogamer reads: "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."

ORIGINAL STORY 17/01/25 UK: Genshin Impact maker HoYoverse has agreed to pay $20m to settle a complaint - filed by the US Department of Justice on behalf of the Federal Trade Commission - accusing it of violating children's privacy laws and deceiving users over the true cost of obtaining rare loot box prizes.

As per the FTC's announcement, the complaint accused Singapore-based Cognosphere - which does business under the name HoYoverse - of actively marketing Genshin Impact to children and of collecting their personal information in violation of the Children's Online Privacy Protection Rule (COPPA). The FTC claimed HoYoverse was aware children under 13 were using its service, but continued to collect their personal information - and share it with third-parties - without obtaining parental consent or complying with other COPPA requirements.

Additionally, the filing claimed HoYoverse deceived players regarding the odds of - and true cost of - winning particularly sought-after "five-star" loot box prizes. The complaint argued Genshin Impact's loot box system - said to require players to "exchange real dollars for bundles of virtual currency that then have to be re-exchanged multiple times to open loot boxes" - is "complicated", "challenging", and "confusing", particularly for children and teens.

Furthermore, the filing claimed Genshin Impact's purchasing process "misleads consumers about the amount of money [they] spend on loot boxes on an ongoing basis, and the amount of money [they] would likely need to spend to obtain certain prizes". HoYoverse's event banners and influencer campaigns were also alleged to give players the impression they would have better odds of obtaining five-star prizes than was the case in reality.

In response, HoYoverse has agreed to pay $20m to settle the complaint - meaning it neither admits or denies the allegations - and will make changes to prevent children under 16 from purchasing lootboxes without a parent's express consent. The proposed settlement - which must be approved by a federal judge - also prohibits HoYoverse from selling loot boxes using virtual currency without providing an option to purchase them with real money, and requires it to disclose loot box odds and exchange rates for multi-tiered virtual currency.

Additionally, HoYoverse is required to delete any personal information previously collected from children under 13 without parental consent, and to comply with COPPA going forward.