Japan's Consumer Affairs Agency is to investigate companies including social gaming giants GREE and DeNA over claims one of their business practices violates sales law in the region.
As detailed by Bloomberg, the body is looking at the 'complete gacha' mechanism.
This charges players small sums - around ¥300 or $4 - for virtual items that can be converted into a rare item when combined. It's considering whether this violates the law through what's described as "unjustifiable premiums and misleading representations."
A total of six companies are caught up in the investigation, with both GREE and DeNA claiming they will comply fully with the Consumer Affairs Agency to resolve the issue.
It's reported the body might resort to banning the method all together, owing to the suggestion is draws customers into paying excessive fees.
"The situation remains severe" for both Gree and its rivals, Mitsuo Shimizu, a market analyst at Tokyo-based Iwai Cosmo Securities, told Bloomberg.
"Their profitability is at risk, depending on the governments decision."
Bloomberg claims one user amassed a bill of ¥4 million (around $50,000) across two months, all generated using the complete gacha method.
Analysts quoted by the site claim a ban on the practice could hit GREE's net income by 18 percent and DeNA's by 6 percent.
"Even if the 'complete gacha' is abandoned, it won't rock the foundation of Gree," retorted Ryutaro Shima, head of GREE's corporate division.
"We will consider introducing new services to spur sales."
The companies' share price has also been hit, with GREE down 25 percent and DeNA down 20 percent on the news.
GREE and DeNA's share price down over 20% on back of Japanese investigation into 'gacha' IAP mechanism
Too close to gambling
Early Bird tickets for Pocket Gamer Connects Seattle 2023 end soon! Don't miss out on your chance to attend the leading b2b global games industry conference, May 16-17. BOOK NOW!