Legal concerns decimate DeNA and Gree share price

Japan’s Consumer Affairs Agency has announced an investigation into how social games firms sell their microtransactions in Japan, causing shares in the country’s two major players to nosedive.

Nikkei.com reports that shares in both DeNA and Gree – the two major players in Japan’s social gaming scene – plunged to their daily limit” on the news, causing concern about the ongoing health of the sector in the region – and possibly elsewhere.

The pair’s prices fell by 20 per cent and 23 per cent respectively – the highest single-day shift permitted for each according to TSE regulations.

The concerns stem from IAP systems that encourage users to purchase multiple virtual items from an in-game vending machine in the hope of winning a rare item as a prize”.

It is possible that these methods contravene regulations concerning sales which involve random prizes.

"This raises questions about whether the sector’s growth in Japan is sustainable," Tokai Tokyo Research Center analyst Yusuke Tsunoda stated.

A side-effect of the news is that high-profile businessman and Japan’s youngest billionaire Yoshikazu Tanaka saw $702m wiped from his personal fortune.

Regional concerns are likely to unsettle the global social gaming sector as its major players look to push their wares into new and emerging markets.