Japanese CAA says Konpu Gacha Violates Sales Law, Stocks Plummet

Posted By: Dave Bast In: Gaming News On: 08 May

Yesterday, Japan’s Consumer Affairs Agency announced that the popular Konpu Gacha or Completion Gacha sales method used in many of Japan’s online social games violates Japanese law, according to Daily Yomiuri Online. The games that used this mechanic came under fire recently when a middle school boy managed to rack up 400,000 yen in one mouth, which amounts to roughly $5,000. In an effort to limit excessive spending, Japanese social giants Gree and DeNA placed spending caps on underage users last June, but with rising complaints Japan’s Consumer Affairs Agency chose to outlaw the method all together.

Before today I had never heard of the Konpu Gacha online game except in passing. Thankfully Saul Gonzalez over at Gamasutra gave a pretty detailed explanation of the game and what we’re talking about. Essentially the online Konpu Gacha is an adaptation of the physical Gacha machines that are already located throughout Japan, and their Consumer Affairs Agency is cool with those, so no problems there. The problem is that the online Konpu Gacha has an added set collection rule, as Gonzalez puts it like “obtaining all the pieces of equipment in a set.” Anyone who knows anything about games knows that people go gaga over completing sets, which is exactly how people began spending thousands of dollars playing these games online.

So far, however, Japan’s CAA has only advised them that they are in violation of the law. According to Daily Yomiuri Online the law they have been accused of breaking is “The law on unjustifiable premiums [which] prohibits a sales method called ‘cards combination’ for systems that offer prizes by lottery.” According to Gree however, “We’ll give an appropriate response after receiving an official request.”

All of this comes after last week’s news that Gree has acquired social game company Funzio for $210M. This seemed like a move that would give them the ability to compete globally, however, after news of the Konpu Gacha ban their stocks took a 20% nosedive. This also took its toll on Gree CEO Yoshikazu Tanaka as he lost $702M of his personal fortune after Gree’s stock was crushed. It appears as if they need to circle the wagons before executing their plans for global conquest.

This is most likely part one of an unfinished story, until Japan’s CAA sends Gree the official notice it has requested, I doubt Gree will voluntarily give up their Gacha cash cow. Keep your eyes peeled over the next few days, once the official paperwork starts moving it will be interesting to see how Gree handles it.