No.2422
06/12/2020

Pachinko Parlor Operators: Key Research Findings 2019

Yano Research Institute (the President, Takashi Mizukoshi) has estimated the average values on major index of 128 pachinko parlor operators based on their financial statements, and found out the trends in sales/profit.


Transition of Pachinko Parlor Operators’ Business Performances (Average of 128 companies for 3 years)
Transition of Pachinko Parlor Operators’ Business Performances  (Average of 128 companies for 3 years)

Summary of Research Findings

This research is based on a calculation of average values for major financial index of 128 pachinko parlor operators extracted at random from 2,862 pachinko parlor operators nationwide that are listed in the “YANO Pachinko Database”. Analysis is conducted for 3 years between FY2016 to FY2018.
For FY2018, while an average on sales was 19,383 million yen, an average cost of sales was 16,355 million yen (composition ratio 84.4%), an average SGA (Sales, General, and Administrative expenses) 2,622 million yen (13.5%) and average operating profit 405 million yen (2.1%).
Sales for FY2018 decreased by 3.1% from the previous fiscal year, indicating the decline in earnings has been continuing just as in FY2017.
While operating profit fell by 15.7% YoY for FY2017, it increased by 8.0% for FY2018. Similarly, operating margin improved from composition ratio of 1.9% for FY2017 to 2.1% for FY2018. This indicates that control of sales cost heightened gross profit margin, increasing operating profit. In other words, return of profits to gamers has diminished.
SGA declined by 2.9% compared to the previous fiscal year, while composition ratio remained at 13.5%, which is equal to the ratio for FY2017. 
At pachinko parlor operators, SGA includes cost of game machines. According to the past surveys, composition ratio of SGA has risen over 10% from 2008; since then, cost of game machines has placed the management of pachinko parlor operators in predicament.
Due to the outspread of coronavirus, negative influence has been seen in customer attraction at pachinko parlors from March 2020. After the government declared a state of emergency, many pachinko parlor operators took the steps to close the parlors. In addition to the decline in the number of customers and lowering of sales due to closure, pachinko parlor operators are expecting increase in SGA as they must replace machines by January 2021 to be in accordance with the National Police Agency regulation (which requires replacement of old machines that have ‘structural’ issue of arousing players’ gambling spirit, to new machines programmed as ‘game machine’, i.e. machines that would not stir up gambling spirit of players as bad as the old machine). Under such circumstances, sharp decline in the business performance of pachinko parlor operators is anticipated.

Research Outline

1.Research Period: September to December 2019
2.Research Object: Pachinko parlor operating companies
3.Research Methogology: Data aggregation and analysis by specialized researchers on “YANO Pachinko Database”

Pachinko Parlor Operators

This research is based on a calculation of average values for major financial index of 128 pachinko parlor operators chosen from 2,862 pachinko parlor operators nationwide that are listed in the “YANO Pachinko Database”. Extraction conditions are as noted below. Analysis is conducted for 3 years between FY2016 to FY2018. 


Targeted pachinko parlor operators are 12 major companies (which operates more than 20 parlors), 26 second-tier companies (10 to 19 parlors), 35 mid-size companies (4-9 parlors), and 55 small-size companies (1-3 parlors) chosen at random. Average number of parlors operated by the 128 companies is 7.9 parlors. 


Nevertheless, it should be noted that giant operators that have been expanding the number of parlors rapidly are excluded from aggregation. Such operators include Maruhan, Dynam, Gaia, Niraku, Undertree, and NEXUS.

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Pachinko Parlors and Parlor Operators

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