By Kanishka SinghWASHINGTON (Reuters) – Cognosphere, the publisher of the anime-style fantasy video game “Genshin Impact,” has agreed to pay $20 million to settle allegations brought forth by the U.S. Federal Trade Commission that the company violated a children’s privacy law. In addition to the financial settlement, Cognosphere has committed to preventing children under the age of 16 from making in-game purchases without parental consent as part of the resolution, according to a statement released by the FTC.
The FTC accused Cognosphere, a Singapore-based entity, of engaging in unfair marketing practices by promoting loot boxes to children in a manner that obscured the actual costs involved and misled all players regarding the likelihood of receiving prizes. Notably, the game “Genshin Impact” was developed by the Chinese company MiHoYo.
While disputing several of the allegations made by the FTC, Cognosphere acknowledged the importance of maintaining the trust of its gaming community and emphasized a shared dedication to transparency with players. A company spokesperson stated, “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.”
As part of the settlement, Cognosphere has committed to implementing new measures aimed at protecting children and young teenagers, including the introduction of age-gate and parental consent protocols. Moreover, the company plans to enhance disclosures within the game concerning virtual currency and rewards for players in the United States in the upcoming months.
This development signifies a significant step towards ensuring compliance with regulations regarding children’s privacy and protection in online gaming environments. The agreement reached between Cognosphere and the FTC highlights the growing emphasis on safeguarding the interests of young players and promoting transparency within the gaming industry.
(Reporting by Kanishka Singh in Washington; Editing by Leslie Adler and Edwina Gibbs)
