Summary of Research Findings

The number of pachinko parlor operators was 2,798 as of the end of December 2019, a decline by 205 companies from the previous year. Decrease in the number of pachinko parlor operators had been small during the period between 2008 and 2012, but it has become larger since 2013, with 100 companies disappearing each year. This declining tendency has been kept for more than 15 years. Still, 2019 can be said as the year that operators somewhat withstood not to discontinue the business, when considering 2018 recorded the largest number of parlor operators closed their business 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 then revised regulations. The number of company groups, consolidated by the capital or the same management, has become 2,141, down by 156 groups during the period between the yearends of 2018 and 2019.

The number of pachinko parlors nationwide was 9,386 as of the end of December 2019, a decrease by 408 parlors from the preceding year. Total 1,906 parlors have disappeared during the past five years. 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.

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 too dependent on pachinko or pachislot games. Because of the replacement expenses weighing heavily on business, some pachinko parlor operators have started giving up the replacement and withdrawing from the business. Even major pachinko parlor operators have streamlined their business by closing some unprofitable parlors that have little chance of cost recovery. In addition to such replacement expenses, there are plenty of concerns for the industry for 2020, such as the influence of COVID-19 and the Parbtial Revision of the Health Promotion Act that comes with anti-smoking measures to be fully taken effect since April 2020. Therefore, the decrease in the number of pachinko parlors and parlor operators is expected to accelerate for the time being.

Noteworthy Topics

Newly Opened Pachinko Parlors Diminishing to 108 during 2019

The number of pachinko parlors newly opened in 2019 was 108. When considering that 221 parlors used to open in 2015, the newly opened parlors declined to half of what had been five years ago.

When observing the newly opened parlors by region, the number of parlors in Tokyo increased by 10 from the previous year, while that in Osaka remained flat, and those in Aichi and Fukuoka prefectures respectively fell significantly. In some other regions, with hardly any new stores opened for some time, no large difference in the number of new stores from a year before. While some major companies try to expand their group by merging and acquiring some of those parlor operators that have given up replacement of the models and withdrawn from the business as mentioned above, decreasing tendency of newly opened parlors is likely to continue until the replacement completes.

Research Outline