NOT again. Just when another tousle-haired Japanese entrepreneur hoped it was safe to make a billion or two, along come the forces of law and order threatening to throw the rule book at him: in this case, the Act Against Unjustified Premiums and Misleading Representations. That, at least, is how some people viewed news this week that the Consumer Affairs Agency was investigating a feature, popular on Japan’s ubiquitous mobile-phone games, called a “complete gacha”, in which players collect sets of randomly generated tokens to swap for in-game rewards. Such games have made fortunes for several internet start-ups.
Agency officials, however, have expressed worries that complete gacha may be a form of gambling (it sometimes involves real money), which can cause children and adults to splurge beyond their means. They questioned its legality.
The retribution was swift. In three days the value of GREE, whose 35-year-old owner, Yoshikazu Tanaka, has been called the youngest self-made billionaire after Facebook’s Mark Zuckerberg, plunged by a third. DeNA, another social-games site, lost 22%.
To Yoshito Hori, a venture capitalist and former GREE backer, the news recalled a pattern of crackdowns on alleged abuses by start-ups in recent years that have discouraged the Japanese from setting up new businesses. He urged the government to seek a harmonious solution that protected both consumers and entrepreneurs: “Killing GREE or DeNA is like killing Sony or Matsushita (Panasonic) when they were coming up after the war,” he said.
On May 9th GREE and DeNA gave ground. GREE said it would stop the release of all new complete gacha games and phase out existing ones. DeNA said it would also stop the practice. Mr Hori said he expected they might be prepared to pay back anyone who had overspent. It was not clear, though, whether the authorities would let the matter rest there.