Gree's Largest Shareholder Loses $700 Million on Government Regulation Fears

May 7, 2012 -

While most of us couldn't imagine having billions of dollars in profits, that doesn't take away the sting of losing $700 million that Gree CEO Yoshikazu Tanaka feels. According to this Kotaku report, over the weekend the Yomiuri Shimbun reported that the Japanese government could regulate online social games that have players paying extra money to try and win rare in-game items. The items in question are rare in-game idol cards. Players collect these cards in order to collect a whole deck. In Japan both Gree and DeNA use this reward system for their social games.

But this practice is being eyeballed by the government, who has expressed some concern that "kompu gacha" violates Japanese law, or as Kotaku notes: the "law on unjustifiable premiums" which takes advantage of the player's "gambling spirit".

There have been enough media reports in Japan about players spending hundreds or even thousands of dollars on card-based social games like the ones Gree and DeNa offer.

So this brings us back to why the youngest billionaire behind Facebook's Mark Zuckerberg (according to Forbes Magazine) lost so much money in such a little time. Investors hearing the news that the government might crack down on this rewards system, began to panic and stocks for both companies rapidly declined... Tanaka owns 49 percent of Gree.

Source: Kotaku East


 
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