It’s Official: Government Regulates Japan’s Social Gaming Industry Over Kompu Gacha [Social Games]

The “kompu gacha” (complete gacha) shock has come to a temporary “official” close today: Japan’s National Consumer Affairs Agency declared [PDF] that the mechanic found in many social games on GREE and DeNA‘s Mobage platform is illegal.

I am not a legal expert (and the written statement the agency issued today doesn’t have an English translation), but apparently “kompu gacha” violates the ”Act against Unjustifiable Premiums and Misleading Representations” and the “Law for Preventing Unjustifiable Extra or Unexpected Benefit and Misleading Representation” in Japan.

With this document, the agency confirms reports about an impending regulation that appeared in Japanese media two weeks ago - a move that some people in the industry (myself included) predicted well before that.

For reference, I summed up the “kompu gacha” shock in chronological form here.

The agency’s document describes the government’s understanding of “kompu gacha” and the reasoning behind the decision to call the mechanic illegal.

Simply put, the agency is opposing concepts used by social game makers under which players must pay to win a string of “mini lotteries/draws” in order to get a prize after the set is complete.

In other words, “kompu gacha” or any other type of (paid) bingo-like mechanics in social games in Japan are dead.

Good news for the industry: the government keeps their hands off the general gacha mechanic, at least for now – it would be a total catastrophe for earnings in just about every social gaming company in Japan if regulation hit gacha, too.

The agency says the guidelines will come into force on July 1. However, Japan’s six main social gaming companies already decided to get rid of the “kompu gacha” mechanic in all titles by the end of May 31 (this includes third-party titles).

My personal view is that this isn’t over and that the big platform providers GREE and DeNA in particular will initiate more moves, including measures to get the real-money trading problem under control – before the government steps in again.

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