Japan threatens social gambling clampdown
Companies including Gree see share prices drop following reports of changes.
Japan’s Consumer Affairs Agency has threatened to heighten its scrutiny of social gambling games over concerns they violate the country’s laws.
According to Bloomberg the games in question, known as ‘complete gacha’, allow players to win virtual items for an outlay of around 300 Yen (£2.33) at a time, with prizes on offer for those who obtain a certain combination of items.
The news wire references a report in Japanese newspaper Yomiuri Shimbun, which claims the Consumer Affairs Agency is set to contact mobile gaming companies via industry groups in an attempt to get them to voluntarily stop offering ‘complete gacha’, before sending cease and desist orders to those who fail to comply. It adds the Yomiuri report claims “The sales method may violate the law through unjustifiable premiums and misleading representations”.
Following the news, Japanese social gaming company Gree saw its shares fall by a record 23% yesterday, although Bloomberg reports that Ryutaro Shima, head of the company’s corporate division, has said “Even if the ‘complete gacha’ is abandoned, it won’t rock the foundation of Gree.”
Other companies to see share prices drop include video games developers Konami and Capcom, which also have social arms, although analyst Satori Kikuchi suggests the impact on the two companies’ operating if ‘complete gacha’ is banned would be no more than 10%. David Gibson, analyst with Macquarie Securities, however said Gree’s net income would drop by as much as 18% if such a ban came into force.
Konami has a social gaming partnership in place with Zynga, signed in March, which saw it named as one of the first partners on the social gaming developer’s newly launched proprietary platform.