The “kompu gacha” sales model used by Japanese online social-gaming companies is being reviewed by the Consumer Affairs Agency. Kompu gacha is an online market for virtual items that users can purchase in order to gain certain advantage over other users in the free online games. It generates a large amount of revenue for gaming firms such as DeNA Co. and Gree Inc., accounting for 10% to 30% of their total sales.
The electronic-lottery style has, though, raised gambling concerns as some users spend as much as 100,000 yen per month to collect specific combinations of virtual items. The Law Against Unjustified Premiums and Misleading Representations prohibits companies from offering prizes to costumers who purchase certain amounts or combinations of items. Once Japan’s consumer watchdog decides on the matter, gaming companies will be forced to adjust their business models to avoid administrative penalties.
Forbes says that Yoshikazu Tanaka, Japan’s youngest billionaire, who founded Gree, has seen an estimated $700 million wiped from the value of his shareholding in the company.