Bloomberg News

Gree Drops After Japan Rules Sales Method Illegal: Tokyo Mover

May 20, 2012

Gree Inc. (3632), Japan’s second-biggest social-gaming company, fell to the lowest in more than a year in Tokyo trading after a sales method it uses was ruled illegal.

Gree dropped as much as 5.3 percent to 1,293 yen, the lowest since March 16, 2011, and traded at 1,339 yen as of 9:29 a.m. DeNA Co. (2432), Japan’s largest social-gaming operator, fell as much as 6.2 percent to 1,825 yen. The benchmark Nikkei 225 Stock Average rose 0.6 percent.

Japan’s Consumer Affairs Agency announced May 18 it plans to ban the sales starting in July for a method known as “complete gacha” under a law against unjustifiable premiums and misleading representations, saying it entices users with an appeal similar to gambling. Social-gaming companies have plunged in Tokyo trading since earlier this month, when the consumer agency said it was considering restrictions.

A group of game operators including Green and DeNA have already said they plan to abandon the feature by May 31.

In “complete gacha,” users pay about 300 yen ($3.79) apiece for virtual tokens that can be converted to a more valuable virtual item if the player obtains the right combination or a “complete” set. The items allow users to make faster progress in games.

DeNA, Gree and four other operators formed a group to improve the social-gaming environment in March and are imposing a ban on “real money trade,” where users sell those rare items to other players, the companies said April 23. The operators have limited monthly fees for users who are 19 years old or younger.

Gacha is the Japanese word for vending machines that dispense miniature toys or prizes in plastic capsules without showing the contents beforehand. Buyers take a chance they will receive a desired item after inserting coins and turning a knob.

To contact the reporter on this story: Naoko Fujimura in Tokyo at nfujimura@bloomberg.net

To contact the editor responsible for this story: Michael Tighe at mtighe4@bloomberg.net


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