Anyone who has spent time sitting in a Tokyo train knows that the Japanese love their cell phones. From junior high school students to elderly women, it seems that just about everyone is texting, surfing the net or, of course, playing games.

Needless to say, the mobile gaming market is a multi-million dollar operation in Japan and these days most of the profit is made by charging users for special in-game items or features used in free-to-play games, a business model known as ‘Freemium.’

However, the Freemuium model has recently come under criticism in Japan after a flood of complaints from parents saying that their children unknowingly ran bills of up to as much as ￥100,000—nearly $1,300 US—in in-game payments.

Illustrative of these complaints is the recent story of a parent being taken by surprise by an outrageously high cell phone bill after their 5 year old purchased a ￥100,000 in-game item from what they naturally thought was a completely free-to-play game.

Due in part to advertising that claims the game to be “completely free,” many children and teenagers don’t realize that in-game transactions often use real world money.

The National Consumer Affairs Center of Japan reports that the number of formal complaints received regarding fees associated with free-to-play games rose from 555 in fiscal year 2009 to 665 in 2010, and 2011 is expected to see the highest number yet.

In response, the Japanese Consumer Affairs Agency recently made an official announcement stating its intent to deal strictly with companies that are found misleading customers about game fees.

IT Journalist Toshiyuki Inoue comments: “While advertising a product as free when there are really costs involved elsewhere might be a widely-used business practice in the real world, it doesn’t work for net transactions. It’s come to the point where the government has had to take a stern stance and tell companies not to charge money if they’re telling people their game is free.”

“The people thinking of these models are extremely talented people working at big mobile game companies, mostly recruited from the best colleges in Japan or transfers from other companies in the industry. But talent and ethics are two different things. Before these people start creating services to sell to customers, they should get a basic grounding in morality.”

Source: Yahoo! Japan