Gree CEO Responds to Japan’s Social Game Controversy

Tokyo Game Show 2011 attendees try cell phone games at the Gree booth.
Photo: Robert Gilhooly/Wired.com

Japanese social gaming giant Gree will cooperate with other Japanese publishers to write industry guidelines in hopes of putting off a government investigation of free-to-play social games, said the company’s CEO Yoshikazu Tanaka to Reuters on Tuesday.

“Our aim is for as many people as possible to enjoy our games worry free,” Tanaka told the news service.

A Yomiuri Shimbun report over the weekend first broke the story that Japan’s Consumer Affairs Agency was looking into the social game companies‘ sales tactics, floating the possibility that they may violate laws against gambling.

“There is no doubt [gacha sales] stir a passion for gambling,” said Minister of State for Consumer Affairs and Food Safety Jin Matsubara to the Yomiuri on Tuesday, telling reporters that “there is a possibility” of illegal activity.

The game mechanic at issue is known as “complete gacha,” a lottery system in which players pay real money to win items in a random drawing. Once a set of items is complete, the player is rewarded. Being random, this can prove quite costly to consumers but very profitable to the game companies.

“Up to 50 percent of their overall revenue comes through gacha,” consultant Serkan Toto told Reuters.

Gree has already taken steps to appear proactive in the face of customer complaints. Last month, Gree jointly announced with rival DeNA that it would place spending limits on teenage social game players.

Tanaka’s comments came during a financial briefing where Gree revealed it had tripled profits last quarter to 64 billion yen ($800 million USD). However, in the wake of the Yomiuri story the company’s stock was hit hard and Tanaka personally lost $400 million in one day.

Daniel Feit is a freelance writer living in Japan who has been contributing to Wired Game|Life since 2009. His passion for karaoke exceeds his ability.

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