Think you had a bad day? Japan's youngest self-made billionaire, Gree honcho Yoshikazu Tanaka, just lost US$700 million bucks.
This weekend, the Yomiuri Shimbun reported that Japanese government could regulate social games that have players pony up extra cash for the chance to win rare in-game items, because it could be illegal.
Previously, Kotaku reported how players were spending big bucks on in-game idol cards.
In Japanese, "kompu gacha" ("complete gacha") has players assemble a full set of cards in hopes of getting a rare prize. As website TechInAsia pointed out, this can cost players the equivalent of hundreds—if not thousands—of dollars.
Both Gree and DeNA use this style of reward for their social games, which has helped both companies to become two of the most profitable in Japan—and the 35 year-old Tanaka a very rich man. Forbes dubbed him the "World's Second-Youngest Self-Made Billionaire" after Mark Zuckerberg.
The government could conclude that "kompu gacha" violates Japanese law—namely the "law on unjustifiable premiums"—and takes advantage of players' "gambling spirit".
There have been countless reports in newspapers of players spending enormous amounts of money on card-based social games. But as Japanese blogger Chiho Komoriya pointed out, this "complete gacha" has been used in online games for years. It's only since online social games became incredibly popular (and lucrative), that the Japanese government apparently started taking an interest.
With the news that the government could be moving forward to regulate social gaming, stocks for online social game companies Gree and DeNA nosedived. With Gree's stock in free-fall, Tanaka, who owns 49 percent of the company, is out US$702 million. Ouch.
Update: An earlier version of this story said Tanaka lost $400 million. According to Bloomberg's number crunching, he actually lost $702 million.
‘Kompu Gacha' Sales a Violation of Law [TechInAsia]
Gree Shares [Reuters]