Social-game apps on smartphones have become a massive market, and every year another new mega-hit game emerges with players in the multimillions. The games themselves are usually free to play, but staggering profits generated by optional in-game purchases have made the makers of these apps extremely rich, changing the power balance within the game industry.

However, almost no one, even the makers themselves, can tell which game will become the next smash, leaving investors scratching their heads.

“Monster Strike,” or “Mon-Suto” as it is known to its fans, is a recent success. It was released last October by mixi, operator of the once-dominant Japanese social-networking service of the same name. The game is similar to digital billiards or bowling, with monsters instead of balls or pins. Players launch their monster by dragging it back and releasing it, like in “Angry Birds” — a game that was itself a global hit, though less popular in Japan — and clear stages by capturing and raising monsters. Friends can link over Bluetooth for team play.

“Mon-Suto” reached 10 million users on July 22, only nine months after its release. In May, it snatched the top sales position on the iPhone game chart from GungHo’s hugely popular “Puzzle & Dragons.” Now the two games compete on a day-by-day basis for the No. 1 spot.

Mixi was listed publicly in 2006, when it was Japan’s most popular social-network service. However, being late to join the social-game bandwagon put it behind competitors Gree and DeNA’s Mobage, and then the invasion of Japan by American SNS rivals Twitter and Facebook sealed its fate. Its annual financial report this year was its first red ink since its 2006 IPO. A resurgence seemed unlikely, to say the least.

However, mixi’s stock has shot up more than twenty-fivefold since it released “Mon-Suto.” Its market value surpassed that of DeNA on May 30, Gree on June 3, and now it is bigger than both those rivals together at ¥524 billion.

Another recent hit is “Love Live! School Idol Festival,” a rhythm game with social elements that is resulting in a similar comeback story for its developer, Klab (pronounced “club”).

“Love Live!” is a music-based action game that challenges players to tap on-screen prompts in time to the beat. Successfully completing a whole song unlocks more songs and new gameplay segments. But players who fail must either wait a set period of time to accrue free tickets to play again, or buy them with real money to replay immediately.

Originally a developer of IT systems, Klab began making social games in 2009 and became one of the major vendors, going public in 2011 and climbing to the top rank of the Tokyo Stock Exchange index. However, rapid business expansion and an overly ambitious release schedule led to delays and other problems, eventually forcing the company to announce a profit warning, cut its workforce by 20 percent and downsize its offices.

Until recently its stock was at rock bottom. But seeing 3 million downloads of “Love Live!” in the 13 months since its April 2013 launch, investors have reassessed the company. On April 16, “Love Live!” took the prime position on the iPad app sales chart from “Puzzle & Dragons.” (The iPhone chart is more significant, but “Love Live!” is better played on the larger iPad screen.) The game was co-developed by Klab and Bushiroad, but as Bushiroad is not a public company, it was Klab that won investors’ attention, and its stock price is now soaring again.

In the cases of both mixi and Klab, their reversal of fortunes hinged on the success of just one game. But the other areas of their respective businesses have not recovered their previous shine, and it is impossible to predict how long a particular game can sustain enough buzz to remain lucrative. This poses a risk for investors.

Further clouding the waters is the continuing success of GungHo. No one could have conceived that “Puzzle & Dragons” would remain so popular for so long (a relatively marathon 2½ years of unbroken success), but that one hit has increased the value of the company by over 100 times, at one point even surpassing the market cap of game giant Nintendo. This fact has made stockholders wonder whether the value a particular game publisher has really peaked, or if even greater rises are ahead.

In May, “Love Live!” was localized into languages including English and Chinese. “Mon-Suto” launched a Taiwanese version in May, and a Chinese version is planned with local Internet kingpin Tencent. Foreign localizations help keep sales growth healthy, and so are popular with investors.

However, versions of “Puzzle & Dragons” for the U.S., Europe and Asia have yet to re-create the game’s domestic success overseas. Perhaps that will become the true indication for investors forecasting the financial future of social games.

Akky Akimoto is a Japanese blogger for Asiajin and Cybozu. His Twitter @akky has about 120,000 followers.

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