Japanese e-commerce and entertainment conglomerate DMM.com is reportedly exiting the cryptocurrency mining business, with local media pointing to deteriorating profitability as the main reason behind the decision. According to the report, the company had already decided in September to withdraw from the segment, and the process, including the sale of mining machines, is expected to continue through the first half of 2019.
A Rapid Shift From Expansion to Withdrawal
DMM had entered the mining industry with considerable ambition. The company established its virtual currency division in September of the previous year and began mining operations the following month in Kanazawa, Japan. Local coverage said the firm mined multiple cryptocurrencies, including bitcoin, ethereum, and litecoin.
At launch, DMM presented the project as a large-scale, domestically built mining initiative and said it aimed to operate a mining farm of a size unmatched by other domestic players. It also indicated that it wanted to rank among the top three mining farm companies in the world by scale. To support that push, DMM created a dedicated research and development unit for mining called DMM Mining Labo.
Those plans now appear to have been overtaken by market reality. The reported withdrawal highlights how quickly conditions changed for mining operators as cryptocurrency prices weakened and the economics of the business became less favorable.
Public Mining Showroom Plan Was Also Scrapped
DMM had not limited its mining effort to backend infrastructure. Alongside the formal launch of its mining farm, the company announced plans in February to open a public showroom at the Kanazawa facility. The plan was to operate 1,000 mining machines inside a space of about 500 square meters, giving visitors direct exposure to an industrial-scale mining environment.
However, that initiative did not move forward as intended. The showroom plan was canceled in early June after the company concluded that ensuring security would be too difficult. According to the report, DMM had hoped users could experience the unusual atmosphere of a live mining site, but concerns over theft and site protection ultimately outweighed the promotional value.
The security issue was not theoretical. The report noted that thefts of cryptocurrency mining machines had occurred steadily overseas, and there had also been attempted incidents involving DMM’s Kanazawa mining farm. That appears to have reinforced management’s decision to avoid opening part of the facility to the public.
Focus Turns to Exchange and Blockchain Operations
While DMM is stepping away from mining, it is not leaving the digital asset sector altogether. DMM founder Keishi Kameyama reportedly said he would now concentrate on exchange-related business and blockchain. That shift is notable because DMM already has a meaningful presence in the regulated trading market through DMM Bitcoin, one of Japan’s 16 licensed crypto exchanges.
The company’s recalibration suggests a preference for business lines that may offer a more sustainable operating model than mining under difficult market conditions. Rather than continue committing capital to hardware-intensive operations, DMM appears to be directing attention toward areas where it already has infrastructure, regulatory positioning, and customer reach.
At the same time, DMM has faced setbacks on the trading product side as well. The company recently announced that its crypto trading app Cointap would not launch as originally planned. Local reporting said DMM believed it had become more difficult to attract beginner crypto traders following the broad decline in digital asset prices and the impact of the Coincheck hack earlier in the year.
Part of a Wider Japanese Mining Slowdown
DMM’s retreat came less than a week after another major Japanese internet company, GMO Internet, said it would stop manufacturing and selling mining machines. GMO cited a similarly challenging environment, including falling cryptocurrency prices, weaker demand, lower selling prices, and intensifying competition in the mining hardware market.
Unlike DMM, GMO said it would continue mining on its own account and would relocate its mining farm instead of fully abandoning mining activity. Even so, the timing of the two announcements points to a broader pattern: major Japanese firms were reevaluating the economics of mining as market conditions worsened.
The parallel between DMM and GMO is particularly important because both companies had the scale and resources to pursue industrial crypto strategies. If even well-capitalized firms were pulling back or restructuring their mining exposure, that suggested a difficult environment for smaller operators with less flexibility.
Why Profitability Became the Deciding Factor
The core issue in DMM’s reported withdrawal was simple: mining no longer generated the returns the company expected. Crypto mining profitability depends on several moving parts, including token prices, hardware costs, electricity expenses, operational efficiency, and the level of network competition. When asset prices fall, margins can compress quickly, especially for companies that expanded on the assumption of stronger market conditions.
DMM’s experience also underscores how operational complexity extends beyond computing power. Security, facility management, capital allocation, and product strategy all become critical once a mining project is scaled up. The abandoned showroom initiative illustrates how even outreach and branding plans can become liabilities if physical security risks are underestimated.
For a diversified group like DMM, the decision to exit mining while maintaining exposure to exchanges and blockchain may reflect a broader portfolio strategy. Businesses tied to trading and platform services can still face market volatility, but they may be less exposed to the fixed-cost pressures and rapid margin compression that affect mining operations.
What the Move Signals for the Industry
DMM’s exit does not mean crypto mining is disappearing from Japan, but it does show that the sector had entered a more selective and disciplined phase. The period of aggressive expansion and headline-grabbing scale targets was giving way to a harder assessment of costs, risks, and strategic fit.
For the market, the development is a reminder that participation in the crypto economy can take very different forms. DMM is stepping away from one of the most infrastructure-heavy segments while remaining involved through regulated exchange services and blockchain initiatives. That distinction matters because it shows how companies may continue backing digital assets while abandoning business lines that no longer make commercial sense.
As of the report, attempts to reach DMM.com for additional comment had not produced a response. Still, the outline of the company’s decision is clear: crypto mining was no longer sufficiently profitable, and DMM is now repositioning itself toward parts of the industry it believes offer a better long-term opportunity.