Cognosphere agrees to pay $20 million to resolve FTC complaint over Genshin Impact

Cognosphere, the company distributing Genshin Impact, has consented to pay a $20 million settlement for accusations from the U.S. Federal Trade Commission.

The complaint from January 17, 2025, filed in the Central District of California's U.S. District Court, accuses Cognosphere of infringing on the Children's Online Privacy Protection Act and misleading players regarding the expenses related to in-game purchases.

According to the FTC, Cognosphere targeted children under 13 with Genshin Impact marketing and gathered their personal data without parental approval, contravening COPPA.

The complaints also suggest Cognosphere misled players about loot box winning probabilities and created a perplexing system for purchasing in-game currency, potentially resulting in players spending more money than expected.

The proposed court order mandates that Cognosphere must make adjustments, including prohibiting the sale of loot boxes to anyone under 16 without parental approval and correcting the misrepresentation of loot box win chances, pricing, and features.

Cognosphere, in response, stated that although it disputes several of the FTC's claims, it agreed to the settlement to maintain trust and ensure transparency with its players.

"We will implement new protections for minors and increase disclosures related to virtual currency and rewards for our U.S. players," the company confirmed.

Samuel Levine, Director of the FTC's Bureau of Consumer Protection, stated, "Genshin Impact misled young players into spending large amounts on prizes they were unlikely to win."

"Businesses utilizing such deceptive tactics will face consequences, especially when misleading young audiences about real in-game expenditures," he emphasized.

Cognosphere, a subsidiary of MiHoYo, operates in the U.S. as HoYoverse and publishes Genshin Impact.