The Federal Trade Commission announced in January 2025 that Genshin Impact’s publisher had agreed to a proposed settlement carrying a $20 million monetary penalty. The case concerned allegations about children’s personal information, loot-box odds and the difficulty of understanding how much virtual-currency purchases could cost. The FTC said a federal judge still had to approve the proposed order before it could take effect, so the announcement was not a final court ruling on the allegations.
Who was named in the FTC case?
The FTC named Cognosphere Pte. Ltd. and its California subsidiary, Cognosphere LLC, which the agency said do business in the United States as HoYoverse. The case concerned Genshin Impact, a free-to-download game with in-game purchases. The FTC’s January 17, 2025 announcement described the agreement and proposed order; the agency’s case page lists the filings.
What did the FTC allege?
Children’s privacy
According to the FTC complaint, the companies marketed Genshin Impact to children and collected personal information from children under 13 without providing the notice and obtaining the verifiable parental consent required by the Children’s Online Privacy Protection Act (COPPA). These are allegations in the complaint, not findings after a trial. The FTC-filed complaint sets out the agency’s claims.
Loot-box odds and costs
The complaint also alleged that players were misled about the odds of winning sought-after five-star prizes and the real-world cost of pursuing them. In the system described by the FTC, players could buy bundles of virtual currency, exchange that currency for other in-game currencies, and then use those currencies to open loot boxes. The agency alleged that this multi-step path and its denominations made ongoing spending and prize costs harder to understand, particularly for children and teenagers.
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The FTC further alleged that limited-time event banners and influencer promotion encouraged players to pursue rare prizes. The complaint said some children and teenagers spent hundreds or thousands of dollars doing so; those figures are allegations about some players, not a representative estimate of typical spending.
What does the $20 million penalty mean?
The FTC said Cognosphere agreed to pay a $20 million monetary penalty as part of a proposed settlement announced January 17, 2025. The agency’s release said a federal judge’s approval was required before the proposed order could take effect. The figure therefore describes the penalty in the announced agreement, not a fine imposed after a court found every allegation proven.
What protections did the proposed order include?
The FTC said the proposed order would require the following changes and safeguards:
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- Block loot-box purchases by children under 16 unless a parent gives affirmative express consent.
- Offer a way to buy loot boxes directly with real money, rather than requiring players to use virtual currency.
- Prohibit misrepresentations about loot-box odds, prices and features.
- Disclose odds and exchange rates when purchases involve multiple tiers of virtual currency.
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The proposed under-16 purchase safeguard is distinct from COPPA’s under-13 privacy requirements: one concerns consent for loot-box purchases, while the other concerns children’s personal information.
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Are the proposed changes in effect now?
The FTC case page reviewed here lists the January 17, 2025 filings, but does not establish when a federal judge entered the proposed order or whether every provision has been implemented. The FTC’s announcement makes clear that judicial approval was needed before the order could take effect. Accordingly, the announced terms should not be treated on the evidence of those records alone as confirmation of the game’s current purchase settings.
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