When it comes to mobile social-gaming, nowhere is it as popular or as profitable as it is in Japan. The nation's two industry giants, Gree and its rival DeNA's Mobage, have been increasing their sales every quarter for years. Gree's TV-commercial campaigns are second only to cosmetics company Shiseido in the amount of money spent on advertising (Kao is No. 3, P&G No. 4 and Kirin No. 5), which shows just how large the social-gaming industry has grown.
However, during the Golden Week holidays trouble began to brew for both Gree and DeNa. In a Yomiuri newspaper scoop on May 5, it was revealed that one of the biggest earners for both companies — kompu gacha, a virtual card-collection system based on a paid lucky-dip-style gaming called gacha — is now under threat due to questioning by The Consumer Affairs Agency (CAA) over its legality. On May 7, when the stock market reopened, traders reacted strongly against the social game providers — many shareholders lost 20 percent to 25 percent of their share value by the end of the day.
As a result, on May 9 and 10 most social-game providers, platform owners including Gree and DeNA (Mobage), and many other third parties rapidly announced their decisions to kill the kompu gacha feature by the end of May.
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