The Rise of Gacha Games
How they took over the Asian Market
Introduction
Imagine going to the casino and putting down money, and obviously, that money has the chance of paying back in dividends, or you could lose it completely. Everyone knows that this concept is known as gambling. But imagine, instead of winning money, you win a character in a video game that you most likely will not get a return on investment from. Sounds crazy, doesn’t it? Who would be willing to risk money to get a virtual character?
But this concept forms the basis of the genre that has completely taken over the Asian gaming market. Gacha, as it is called, is this addictive cycle that generates billions in revenue and is reshaping the mobile gaming landscape. To understand the rise of gacha games, we need to explore their cultural roots, explosive market growth, and the unique psychology that keeps players coming back for more.
Origin
The word “gacha” itself originates from Japanese capsule machines called “gachapon.” They would be located on the streets; for example, at convenience stores, and essentially, a person would insert a sum of money, and they would be given a capsule that contained a random item from the gachapon. Usually the item would be a small figure of a character from a trademark series, such as a TV animation or game. There would be no guarantee that the person would get the item they wanted; they just paid for the chance to get the item they actually want, and if they didn’t, they either quit or keep paying until they get it.
This is seen as a generally harmless idea. It’s a cute vending machine idea that people occasionally spend some money on and then forget about. But what happens when this kind of “gambling” is so readily accessible through your mobile device? In today’s world, that is exactly what it has evolved into, and it has brought up many ethical concerns as it is essentially gambling.
To describe the model for Gacha Games, they are basically regular games that also allow you to get premium in-game currency by either playing the game or paying for it directly with real-world currency. You use this premium currency to ‘roll’ for unique characters on limited-time banners. Each roll has a low probability of getting the rare character that is available, but most likely, you will receive the in-game version of junk of varying rarities.
Now, this does sound predatory in nature, and yes, it absolutely is. Most games, once you pay real money, allow you to get whatever you want, but in gacha games, you pay for a chance to get what you want. There have been systems developed to ensure you get the character within a certain amount of rolls in most gacha games but it does not prevent it from become predatory.
But this style of getting characters has snowballed in hundreds upon hundreds of mobile games that involve this very system. A majority of which are based on a pre-existing IPs, such as anime or video games (which in my opinion are mostly cash grabs). The few standalone ones who have built their own IP are usually more high quality and are more worth your time.
It is important to note however, that while these games share the same system for obtaining characters, they vary in generosity of currency you can get for free by playing the game and entire gameplay systems.
For example: Genshin Impact is a 3D Open World RPG while Arknights is a 2D Tower Defense game. They both share the gacha system, but are generally completely different to each other.
Market
If this is your first time hearing about gacha, then you might think that it’s just some niche genre that hasn’t really impacted the scene all that much. But it is quite the opposite looking at the data provided by a Reddit post compiling the quarterly statistics of a revenue tracking site, SensorTower.
As you can see, the most recent highest-grossing gacha game, Pokémon TCG, released only in November of last year, has already amassed approximately 489 million dollars since its release. Some might say that Pokémon is an already popular IP, thus leading to the inflated numbers. But the standalone titles also generate numbers that are nothing to scoff at. Uma Musume, despite only being available in Japan, gained 91 million in revenue within the last quarter. The same can be seen with Mihoyo’s Genshin Impact and Honkai Star Rail, earning 145 million and 139 million, respectively.
It is undeniable the financial success that these games incur, not to mention the fact that all of them are free to download and the average player is able to see most, if not all, of what the game has to offer for free.
Why the hell are these games so popular?
You still might not be completely sold on the idea of why gacha games drive in so much revenue. Because so far, it seems like all there is to it is a glorified gambling simulator. But there are many socioeconomic factors that lead to these games’ success.
Culture
A lot of this success also has to do with the gaming culture seen in Asia. As stated in an article by Market Interactive, the Asia Pacific Region has the “high shares of organic gaming app installs at 48%”, with Singapore, Indonesia, Japan, and the Philippines being the main demographic.
In a blog done by the UAB Institute for Human Rights, Japan specifically is known for its horrible work environment and culture. In 2022, “10.1% of men and 4.2% of women worked over sixty hours a week”. Not to mention, there is a certain pressure to work more overtime hours. People fear that their co-workers will look down on them for forcing them to put in more hours as well as the potential of a promotion being lost. Even when a company like Panasonic offered the option of a four day workweek, as opposed to the usual seven, only 150 of the 63,000 employees opted in. This issue is so prevalent that they have even coined a term for ‘death from overwork’ called ‘Karoshi’.
All of these reasons combined make it so that the Japanese workforce has little free time for leisure. Thus, the small 5-10 minutes of logging in to do the game’s daily missions is enough to get them to stay and potentially spend more money on IAPs. This is especially easy since these gacha games can be downloaded on mobile as well. This is much more appealing and easy to do compared to having to boot up a console or a desktop computer. In fact, many people in Asia are forsaking general consoles and PCs in favor of mobile gaming because of its ease.
It is very well known that mobile games such as “Arena of Valor”, “Mobile Legends: Bang Bang,” and “PUBG Mobile” dominate the general public Asian gaming scene, more specifically Southeast Asia.
Collaborations
For the bigger gacha games, such as the ones under Mihoyo, they frequently hold real-world collaborations and events in order to drive engagement with the community physically. Such as collaborations with McDonald’s, KFC, Xiaomi, and many more. Just last year, Honkai Star Rail hosted its own concert, “Star Rail Live 2024”, in Shanghai at the SPD Bank Oriental Sports Center. Having a capacity of 18,000 seats, both official photographs and accounts have described the turnout as a full house. Similarly with Genshin Impact, they hosted a concert tour featuring places around the world such as the United Kingdom, France, Germany, Japan, Southeast Asia and the United States.
All of these events engage the players to be a further part of the community and keep them engaged with the game itself.
Quality
This mostly goes for the more higher caliber gacha games, such as ones made by Mihoyo or Kuro Games, but these games are generally of very high quality, aside from the loot boxes/gambling. They look visually amazing and have generally good writing and world building for their worlds and stories. The character writing can be fantastic at times, and it’s no wonder how these games managed to cultivate a dedicated fanbase willing to see these games reach a conclusion.
The introduction of gacha games to the general audience has also inspired many people to pursue what they want to do. Whether that be game developers, artists producing fanart or official works, voice actors, content creators, etc. The explosion of these games has opened the door for many, many possibilities for people around the world.
This success is not without its controversies, though.
Controversies
According to a study done on Chinese gacha gamers during COVID, arguably the peak of popularity for games like Genshin Impact, about 65% of participants showed moderate-high risk of problem gambling. A regression model was done, and the study concluded that gacha gamers tend to have higher stress and anxiety levels and are more likely to engage in more gambling activities.
Personal accounts also litter the web of regret with spending money on gacha games. Such as this Washington Post article made around Genshin’s initial release or in this Polygon article where the player spent $1500 in one day trying to get a limited crossover character in Final Fantasy Brave Exvius.
An incident also came out earlier this year in January when Cognosphere (Hoyoverse) had to pay out 20 million to the US Federal Trade Commission for “violating U.S. children’s privacy laws and deceiving children and other users about the real costs of in-game translations and odds of obtaining rare prizes.”
Closing
As someone who indulges in playing gacha games (particularly Mihoyo games) without spending a dime, I acknowledge that there are many flaws within the system. There are many players who spend an insurmountable amount on gacha games, but it is not all doom and gloom. There are also many of those who have found a community of like-minded individuals who they can truly be comfortable with.
It is best to see these type of games as ones that have gacha elements, rather than a “gacha game”. As pioneers of the genre emerge and develop (Mihoyo, Hyperglyph, etc. ), they could accomplish even grander achievements, such as Hyperglyph (developer of Arknights) donating to multiple different charities and universities. These games and their effects will continue to get bigger in scale as time goes on.
Even games/franchises that started out as non-gacha, has started to implement gacha like features into their systems, such as League of Legends or Diablo Immortal, to a very “mixed” community response.
For now, however, it is still potentially a dangerous practice, as it is easy to forget that it is indeed glorified gambling. If you intend to get into one of these games, please limit your spending, if you even choose to spend in the first place which is completely valid. But whether we like the gacha system or not, it is here to stay in the gaming circle for a long time, for better or for worse.