Cognosphere, the publisher of the popular animation-style game Genshin Impact, has settled an agreement to pay $20 million to the United States Federal Trade Commission (FTC) for allegedly violating U.S. children’s privacy laws.
In a statement, the FTC said that the Singapore-based company “deceived children and other users about the real costs of in-game translations and odds of obtaining rare prizes.”
The FTC accused Cognosphere of misleading players by providing false probabilities for winning in-game items via loot boxes, as well as unlawfully gathering personal information from children without obtaining parental consent.
“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,” the FTC said.
Despite being famed for its engaging gameplay and storyline, the game has faced numerous player complaints about its “gacha” system, often needing to spend real money for greater odds of winning.
The gacha system functions like a loot box, which allows players to pull for chances to receive limited characters or weapons.
As part of the settlement, it will also prevent children under the age of 16 from making in-game purchases without obtaining parental consent.
“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,” Cognosphere said in a statement on Saturday.
In the coming months, the company will be increasing its transparency on parental consent and virtual currency practices.
Genshin Impact is a game created by Chinese developer, MiHoYo — now known as HoYoverse to cater to players outside China.