The great Japan gaming crash of 2012

[Aki-at]

Surprised this is not getting more traction in the West, those who follow me on twitter would probably be wondering what I am going on about but it looks like Japan is going to be hit hard again, this time with their social gaming industry set to be down valued majorly due to recent new laws being passed.

Stock values for social gaming giants DeNA and GREE plummeted over 20% today following a weekend report that the Consumer Affairs Agency will be asking that game makers stop the use of a sales method known as "kompu gacha." According to the report, which first appeared in The Yomiuri Shimbun, the agency believes that this sales method violates certain sales laws.

Kompu Gacha, or "Complete Gacha," is an advanced form of gacha. In traditional gacha, players insert money into vending machines to get a capsule containing a random toy. Many free-to-play social games get revenue from a digital version of this, where the prizes are virtual items.

Complete Gacha requires that players collect a particular set of items through the standard gacha games in order to obtain rare "grand prize" items. According to the Yomiuri report, kompu gacha games have become the main revenue source for operators of SNS gaming services.

Bloomberg received confirmation today from Consumer Affairs Agency representative that investigations into the legality of the kompu gacha sales method are under way and that a formal statement will be issued soon.

Tokai Tokyo Securities market analyst Makoto Sengoku warned Bloomberg that if kompu gacha sales tactics are regulated, social game makers will see a pillar of their earnings crumble.

http://andriasang.com/con0we/dena_gree_complete_gacha/

Just to give you a rouge idea of how big GREE is, their booth at last year's Tokyo Game Show was one of the largest.

But what about major game developers? Konami now makes more profit in their social games than they do on console titles. Namco on the other hand have their ever successful Idolmaster series that provide a large amount of profit for them. Stock prices for Konami is down over 15% whilst Namco was down over 10%

For those wondering, SEGA's stock is down 3.15% as of writing this, both Capcom and Square have fared worse. This is no doubt a huge blow for the Japanese gaming industry, as social gaming was seen as their way of getting back market share in Europe and Americas.

[Barry the Nomad]

This would make for a good article. You got the wordpress access, why not write something up? 

[max_cady]

Wow. Okay... When even the casual gaming market is doing poorly that's ...well, I don't need to say anything.

Trust me, Facebook and Zynga are going to kill off casual gaming as a whole.

Now what's pretty upsetting about this is that, these companies are suffering directly from new regulations, correct?

[Sega Uranus]

Japan's game industry has been in a bad decline for years now. Their entire PC market is almost nothing but sex games anymore and it is spreading out to consoles and handhelds. Some old game franchises are being rebranded as such even, Valis is now a slide show porn simulator, for instance.

Social and mobile gaming is not a viable long-term publishing plan. Selling $1 games that cannot expand much in concept or method is a poor strategy. $60 games in many cases are not either, but at least there is significant room to change. Making a $4 sequel to a $1 game is rarely going to work out, but bundle in the soundtrack to a retail game and you will rarely see people complaining.

I think one of the biggest problems is that almost every publisher stops caring about their releases two or three weeks after a game is out. What kind of mentality is this? Most of my favorite games of all time I purchased after those initial periods.

I do not think games are going to go away or anything silly like that, the whole system just needs a restructuring. Probably the best example is Valve. They have good ideas, but now people are learning to just wait for almost every game to go on sale there too.

[MadeManG74]

I think cheap base games that are supported by plenty of DLCs (good DLCs, not one level that's on the disc already then nothing new ever again. AKA the system that every console game currently uses) will be a viable method.

Get people in with a cheap base title then keep the ones interested in it paying for new content.

This is all typed on a whim while I'm doing something else, so bare that in mind before poking holes through all my theories.

[Aki-at]

I was talking about a Japanese gaming crash but eh, I should say it is probably a global crash/decline, Japan just got hit hardest first. Looking at E3, the Western development scene is just about to be hit as hard too.