A lot more at the link: http://asia.nikkei.com/Business/Trends/Legal-barrier-hobbles-esports-in-game-crazy-Japan
Where you can earn millions of dollars from esports in parts of the world, Japanese events only let you win ~$895
Hirokazu Hamamura, President of Gzbrain and a director of a few esports associations is disappointed by the lack of embrace for esports because he wants to make money.
Hamamura thinks that aside from legal barriers, esports has not caught on in Japan due to how foreign PCs are.
Mixi, the creators of Monster Strike had a 20 million yen cash prize event in 2016 but the Consumer Affairs Agency prevented any further large cash prize events.
Using sponsors (Which Mixi did) to provide the cash prizes rather than the game companies proved to be futile.
Revising the law regarding cash prizes to favour esports seems unlikely, would need professional gamers to be exempt from the cash prize restrictions.
Gzbrain's Hamamura is looking at making a licensing system akin to professional Shogi to legally be able to award large cash prizes.
Where you can earn millions of dollars from esports in parts of the world, Japanese events only let you win ~$895
Esports is already big business in the U.S., Europe and parts of Asia, where purses for some events can soar to the tens of millions of dollars.
The prize money in Japan is pocket change by comparison.
That is because of the act against unjustifiable premiums and misleading representations, which puts a 100,000 yen ($895) cap on cash prizes for events deemed to be aimed at selling a specific product.
Hirokazu Hamamura, President of Gzbrain and a director of a few esports associations is disappointed by the lack of embrace for esports because he wants to make money.
Hirokazu Hamamura, president of newly established game company Gzbrain, says the cash prize limit is stifling business opportunities.
"If it weren't for that law, we could hold as many big-prize events as we like," said Hamamura, whose company was launched on July 3 by Kadokawa Dwango.
Hamamura, who long served as chief editor of gaming weekly Famitsu, is now director of multiple esports associations. He said he was disappointed by how slow Japan has been to embrace esports, and sees it as a missed chance.
"Esports significantly changes the way we enjoy games, and it creates new opportunities to make money," Hamamura said.
Hamamura thinks that aside from legal barriers, esports has not caught on in Japan due to how foreign PCs are.
He said the legal issue was the biggest barrier, but Hamamura thinks there is another reason esports is not bigger in Japan. "Esports is mainly about games played on PCs, and Japanese gamers are not that familiar with this genre," he said.
Mixi, the creators of Monster Strike had a 20 million yen cash prize event in 2016 but the Consumer Affairs Agency prevented any further large cash prize events.
In 2016, for example, Tokaigi, a major gaming event held by Dwango, had players battling for 20 million yen in prizes over Mixi's "Monster Strike" game.
But the trend toward bigger purses quickly ended last summer, following the Consumer Affairs Agency's response to an inquiry about whether cash prizes paid to winners in a planned competitive event held to promote a particular game constituted a reward to lure people to spend on products or services -- in this case, any fees or purchases related to games featured in the event.
The agency's answer was a clear "yes." It said that prizes in such cases can never exceed 100,000 yen.
Using sponsors (Which Mixi did) to provide the cash prizes rather than the game companies proved to be futile.
But attorney Shohei Furukawa, an expert on compliance with the law in question, warned that even that strategy carries risk.
"The decision about who is providing the products or services is made comprehensively, so even if you separate the payers [of prizes] in practice, it is possible that they will be considered part [of the organizers]," Furukawa said.
Revising the law regarding cash prizes to favour esports seems unlikely, would need professional gamers to be exempt from the cash prize restrictions.
One possibility is to revise the act itself to exempt esports. But Furukawa said doing so would be difficult. "I don't think revisions not directly aimed at enhancing consumer protection are likely," he said.
Furukawa said one possible way around the payout cap is to limit esports events to professional gamers.
"Now that it has become a law to protect consumers, it would seem rather strange if it were applied even to events played by pros," he said. Furukawa said that any cash rewards given to pros should be considered exempt from the act.
Gzbrain's Hamamura is looking at making a licensing system akin to professional Shogi to legally be able to award large cash prizes.
"We're looking to the Japan Shogi Association as a model," Gzbrain's Hamamura said, referring to the association for the traditional Japanese board game, which offers large cash prizes for title matches. "We hope to explore the possibility of establishing a licensing system for professional gamers."