Gree Inc Brings Down Japan’s Nikkei as Agency Clamps Down on Gambling
Japan's Nikkei share average fell 1.5 percent on Wednesday to a fresh three-month closing low as concerns grew that Greece could reject its hard-won bailout deal with international lenders that saved it from a disruptive bankruptcy. But it wasn’t all about Greece. A gambling clampdown also played a major role in Wednesday’s poor showing.
Japan’s leading social gaming company Gree Inc <3632.T> weighed on the market as the heaviest traded stock by turnover on the main board, down 9.6 percent to add to sharp losses incurred since a weekend report that Japan's consumer agency may clamp down on online games that contain aspects of gambling.
The game under investigation by Japan's Consumer Affairs Agency is called "complete gacha", which charges users around $3 to $4 to turn over virtual cards. Completing a predetermined set of up to seven cards allows subscribers to claim rare cards or other valuable online rewards.
"We do not know if we can maintain the growth that we have enjoyed to this point (without these games)," DeNA chief executive Isao Moriyasu said. "From here on, we need to properly devise products that are acceptable to society that can also maintain growth."
Gree, which boasts operating margins of more than 50 percent from selling virtual cards and accessories for online gaming avatars, announced this week a tripling of operating profit in the quarter ended March 31.
- Aaron Goldstein, Gambling911.com
