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Report: Japanese government restricts controversial virtual goods practice

Report: Japanese government restricts controversial virtual goods practice

May 18, 2012 | By Eric Caoili

Japan's Consumer Affairs Agency has formally declared that a questionable virtual goods sales method known as "kompu gacha" is illegal, and will penalize companies that continue to engage in the practice.

The method, which has contributed to the enormous virtual goods revenues for mobile social game companies in the country, encourages players to purchase random virtual goods, in order to receive a prize once they collect a set of items.

Some criticized kompu gacha for resembling gambling and filed complaints with CAA. Reports emerged last week that the agency had investigated those complaints and was preparing to prohibit the practice.

Two of the biggest mobile social game network operators, Gree and DeNA, responded after seeing their stocks plummet, promising to eliminate the sales method from their titles and third-party games on their service.

The two companies likely want to put the matter behind them, as they're both currently focused on expanding their platforms beyond Japan and to the West. Gree, in particular, plans to launch a new global mobile social network later this month.

Developers like Namco Bandai, KLab, and Konami also agreed to halt the practice in their games. Several of the companies have claimed the change will not significantly impact their revenues.

CAA intends to announce its penalties for companies that to do not abandon the practice later today, according to a report from Japanese newspaper The Daily Yomiuri translated by Andriasang.

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