
Cognosphere (HoYoverse), the developer of popular game Genshin Impact, has reached a $20 million settlement with the Federal Trade Commission (FTC) regarding its controversial gacha loot box system. The settlement addresses concerns over unfair marketing practices targeting minors and misleading players about winning odds.
Key Settlement Requirements:
– Ban on selling loot boxes to players under 16 without parental consent
– Implementation of strict parental controls for in-game purchases
– Deletion of personal data collected from users under 13
– Compliance with COPPA (Children’s Online Privacy Protection Act) regulations
The FTC’s investigation revealed that the game’s “Wish” system, which allows players to obtain random virtual items through in-game currency purchased with real money, potentially deceived players about actual costs and winning chances. This monetization method has been highly profitable for the gaming industry, generating over $15 billion annually.
FTC Bureau of Consumer Protection Director Samuel Levine emphasized that companies using such “dark-pattern tactics” will face consequences for deceiving players, particularly young ones, about transaction costs. The settlement highlights growing regulatory scrutiny of loot box mechanics in gaming, which have been criticized for their gambling-like nature and potential to create addictive behaviors, especially among younger players.