Source: All About Japan

Gacha games, as of recent, have become a global phenomenon. There is no way around it: they have become a standard part of the industry. Genshin Impact’s rise has led it to game award nominations, of all places. However, what led up to this at all? Well, before we get to that, I think it would be fruitful to delve into the time before the rise of the mobile market. After all, these games didn’t rise up as if some businessman out there thought “We should make player progression based on RNG and money.” Hopefully, by the end of this series of articles, the very history and impact of the industry will be understood; all in one small series rather than scattered around the internet. As part one of this small dip into industry history, we are looking at gachapon and trading cards. Yet, despite being associated with Japan, we have to make a quick trip to North America.

The Grandfather of Gachapon

It’s not a secret that gachapon is an evolution of the classic gumball machine design. Toy vending machines, in fact, were a thing at least since the 1930s. The way these ideas arrived at Japan, however, is extremely muddled, where sources are even contradictory. Around 1963, President of Penny King, Lester Hardman, introduced the classic gumball machine to Pan American Trading Company president Ryuzo Shigeta, the Grandfather of Gachapon. Shigeta perceived the market value of these machines, thanks to their sound and overall convenience. After all, the very name “gachapon” is based on the Japanese onomatopoeia. However, instead of gumballs, what the Japanese got introduced to was capsule toys.

In February 17th, 1965, after market testing, Ryuzo’s brother, Tetsuo Shigeta, established the company Penny Shokai at the behest of Hardman alongside the first machine. With a joint venture by Stanley Charlet and Hisateru Hirose to help with spreading the product around, the first machine was established at the Asakusa district in Tokyo. The machine did okay. It wasn’t massively popular but was successful enough to allow further distribution and production. Gachapon wouldn’t become a cultural icon until 1983 with one of the first lines to become extraordinarily popular, “Kinniku Man Keshigomu.” Based on the manga series, Kinniku Man, these were a series of collectible erasers, so they were both visually neat and a bit useful. Some time afterwards, Gundam would lead the way for popular gachapon lines to this very day.

Source: Eurogamer

As time went on, gachapon would further separate itself from its American origins. The main separation is that quality increased substantially in modern gachapon alongside the price. Starting from a mere 10 yen, the price would rise to a very punchy 200 or even 500 yen. Combined with the fact that a lot of the products were meant for collection and their distinctive nature, what we have here is an industry that only contains the familiar shell of the vending machine. An icon normally seen as a way to buy convenient items at any time of the day turned into this collector’s dream and random nightmare. The popularity of the machines would rise and fall over the years but they forever became a mainstay in the Japanese industry.

That is a rough outline of how gachapon came to be, after comparing multiple sources. For the most part, it really just boils down to someone going “Huh, that’s neat. Let’s make something out of it.” However, gacha games are more than just collecting. Playing into the gacha also meant account progression; even altering your very ability to clear content. For that source, it is time to look at some expensive cardboard.

Trading Card Games: Magic, Pokémon, and Yu-Gi-Oh!

In August of 1993, Richard Garfield, founder of Wizards of the Coast, released the world’s first major trading card game, Magic: the Gathering. A project that took ten years to develop and continual play testing, it hit North America and Europe by storm. At this point, dedicated games in general – be it computer games or board games like the then-burgeoning Dungeons & Dragons – were really only played by a particular demographic of people. With Magic: the Gathering, it was the first instance of a game of its kind to reach mass appeal. The card game became so popular that Wizards of the Coast would begin to host official tournaments in order to maintain player retention.

While not the first of its kind, Magic: the Gathering would be the first card game that would popularize continual development of new cards in randomized packs. As such, the game would enjoy an ever-developing metagame that also attracted collectors. However, a particular aspect of the card game was its fairly loose ruleset. While it did release with a rulebook, the core rules only served to provide a foundation on how to play the game. In turn, the way to play into the mechanics was set by the cards themselves. This would be the standard for trading card games as a whole, as seen by the Pokémon TCG and Yu-Gi-Oh!, two trading card games that if you were to ask anyone on the street, you would have a decent chance of the respondent name dropping both alongside Magic: the Gathering.

Source: Wizards of the Coast

Unfortunately, the trading card game explosion would be short-lived. Roughly in 1994, the genre would hit its first snag; there was simply too much for consumers to keep up. The popularity of trading card games would rise so high that stores would eschew role-playing games. This would later bring rise to Wizards of the Coast purchasing TSR’s leading product Dungeons & Dragons itself. The genre was that huge, yet that would also be the reason for a collapse. Far too many card games came out in the ’90s, where most have died off to obscurity. This also went in hand with how Magic: the Gathering had too much product for certain releases, stinging collectors, but new releases also made it more difficult for players to keep up. Then later on, there was an eight month gap for the Alliances pack to come out. This teetering balance was not sustainable in the long term. Now the game prefers to rotate the format completely every couple years.

That said, the genre has endured since then. Wizards of the Coast would be the first company to manufacture cards for the Pokémon TCG in North America, Europe, and the Middle East. Yu-Gi-Oh! would later come along and provide a proper competitor to Wizards of the Coast in the form of Konami, albeit via Upper Deck for overseas for a time. Unlike gachapon, all of these are obviously games. Despite that, they are technically an evolution for the industry in this regard. You still have to pay in order to get a random set of collectibles, just this time you are expected to play them as well. Later on, card sets would have internal pack rules that meant you were at least able to get a certain rarity per pack.

Source: Yu-Gi-Oh! Fandom Wiki

Yet, players were still met with needing to pay large sums of money in order to keep up with the meta game. This is the most obvious with Yu-Gi-Oh!, where even in 2002, there were challenges in gathering a deck to compete at high level. Mechanical Chaser was the first notable example, as it was a monster card only released in a tournament pack, was an ultra rare, and had 50 more attack than La-Jinn. 1850 versus 1800 may seem small, but players who had the card possessed a notable advantage over their opponents for the mere fact the weaker monster can be bulldozed over. Mechanical Chaser went up to at least $200 at the day, meaning it was also expensive for someone to get their hands on it. Later on, as the game’s meta developed, using high ATK monsters would be eschewed for those that are slightly weaker, but had powerful effects. In turn, the strategy, Beat Down, would be eschewed in favor of Control, with Beat Down only being seen in competitive play because it is cheaper.

It didn’t help that having more than one copy of a card meant it was easier to access in the deck. By Yu-Gi-Oh!’s very year of release, the format had notable toxic elements. This grew more and more where, by the time after World Tournament 2004 wrapped up, Konami and Upper Deck had to make their first forbidden list, formally banning the cards Chaos Emperor Dragon and Yata-garasu. Of course, if anyone kept up with Yu-Gi-Oh! right now, one will find that problematic aspects in the meta show up time and time again. Even in 2022, cards like Cryston Halqifibrax existed and were a clear problem, yet still ran around with Konami dancing around the problem until very recently. Sometimes, problematic cards like Imperial Order are unbanned and show why they shouldn’t have come back only to be banned once more. Even for trading card games, it should be said that this is relatively extreme, but it does serve to illustrate how bad it can become.

The main takeaway from gachapon and trading card games is their randomness and collector value. Capsule machines and card packs gave randomized products; you don’t know what you are going to get. Even if this was ripe with abuse, and was clearly seen with trading card games, the randomness excited people all the same. Of course, the fact that trading card game players had to buy in to compete at high level didn’t go unnoticed. In addition, the whole issue with oversaturation will become a running theme, which made all of these business ventures from becoming standard.

From here, the seeds were planted, roots ready to trickle down further and further. There were still the matter of distribution, advertising, and monetization to delve into. After all, in order to play card games, you need to know other people as well as a set location. Many times these game sessions last for almost an hour. What if we shrunk these game sessions down to mere minutes along with the ability to play them almost anywhere? For that, it is time for the rise of the mobile market but that is for part two.