Gacha games have long been criticized for their use of randomized rewards and virtual currency systems. Now, Genshin Impact is at the center of a major controversy. The United States Federal Trade Commission (FTC) has announced that the game’s developer, Cognosphere, has agreed to pay a $20 million settlement over allegations of deceptive marketing practices targeting children and misleading loot box probabilities.
FTC: “Children Were Deliberately Targeted”
According to the FTC, Cognosphere engaged in deceptive advertising by directly marketing its loot box system to children. The company allegedly exaggerated players’ chances of winning rare rewards, encouraging them to spend real money through in-game currency purchases. Samuel Levine, Director of the FTC’s Bureau of Consumer Protection, stated that some players spent hundreds of dollars chasing rewards with near-zero probability.
Additionally, the FTC found that Cognosphere collected personal data from children without parental consent, violating the Children’s Online Privacy Protection Act (COPPA). The U.S. Department of Justice supported the FTC’s claims, further reinforcing Cognosphere’s liability in the case.
What Penalties Did Cognosphere Face?
The FTC’s actions against Cognosphere go beyond just financial penalties. Genshin Impact’s in-game economy is set to undergo major changes, including:
- Loot boxes will no longer be purchasable with virtual currency alone; direct purchase options must be available.
- Drop rates for rewards must be fully transparent, with misleading information strictly prohibited.
- The real-money equivalent of in-game currency will be clearly displayed.
- Personal data from players under 13 will not be collected without parental consent, and any previously collected data will be deleted.
Additionally, the FTC found that Cognosphere collected personal data from children without parental consent, violating the Children’s Online Privacy Protection Act (COPPA). The U.S. Department of Justice supported the FTC’s claims, further reinforcing Cognosphere’s liability in the case.
What are your thoughts on this issue? Do you think loot box mechanics should be regulated? How might this ruling impact other gacha games? Share your opinions in the comments!
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