Number of Pachinko Parlors and Parlor Operators in Japan: Key Research Findings 2018
Yano Research Institute (the President, Takashi Mizukoshi) has conducted a survey on pachinko parlors and the operators, and has found out the numbers of operators and parlors as of end of December, 2018.
Summary of Research Findings
The number of pachinko parlor operators was 3,003, as of end of December 2018, a decline by 241 companies from the previous year. The decrease in the number of pachinko parlor operators had been small during the period between 2008 and 2012, but it has become larger by more than 100 companies since 2013, and has kept on falling for more than 15 years. As have stated, more than 200 companies have discontinued their business in 2018, which was the largest decline in the number of parlor operators since 2008 the year of which all the pachinko parlors had completed shifting from #4 models to #5 models in order to abide by the revised regulations.
The number of company groups, consolidated by the capital or the same management, has become 2,297, down by 163 groups during the period between the yearends of 2017 and 2018.
The number of pachinko parlors nationwide was 9,794 as of the end of 2018, a decrease by 464 parlors from the previous year. The number has been on the fall since 2012, with the diminishing number becoming larger and larger. Total 1,498 parlors have disappeared since the end of 2014. The reason of the decreasing number of pachinko parlors and their operators has been the same as previously, mainly because of the small-size pachinko parlor operators possessing one or two parlors withdrew from the business or have bankrupted.
The revision of regulations governing pachinko and pachislot machines has been in effect in February 2018, which requires replacement of pachinko and pachislot models (from #5 to #6 machines) to comply with the new standards that aim to prevent the players from becoming dependents of pachinko or pachislot games. It is likely that some parlor operators cannot afford the expense for the replacement. Therefore, the decrease in the number of pachinko parlors and parlor operators is expected to accelerate for the next several years.
The number of pachinko parlors newly opened in 2018 was 119, less than the number in 2017 by 43 parlors. The number of newly opened parlors has been on the decline, not reaching 200 for two consecutive years in 2016 and 2017. The number in 2018 was even smaller, not able to reach 150. Until the parlor operators can manage to prospect the sales performance in the wake of the replacement of the models to abide by the new regulations, increase in the number of newly opened parlors can hardly be expected.
When looking at the newly opened stores for 2018, increase of such new store has been seen in Aichi prefecture where multiple cases of M&A had been carried out. On the other hand, the number of new stores has lagged behind in Tokyo, which became the sixth position in the ranking of the largest number of newly opened parlors among prefectures. For the past several years, the characteristics of the recent market trend had been to expand the business through M&A. However, because the future environment of pachinko business has been vague, it is possible for those midsize pachinko parlor operators with about five parlors to consider withdrawing from the business. Therefore, relatively larger-scale M&A can be conducted for the future.
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