Summary of Research Findings

Yano Research Institute surveyed the leading 196 pachinko parlor operators operating 10 or more of parlors as of the end of December 2019 by analyzing the two indicators from the YANO Pachinko Database: Changes in group size during the past decade (fluctuation in the number of parlors within a company group during the past decade); and the average number of pachinko machines in group. To find out the current statuses, the strategies at pachinko parlor operators were categorized into the following four types: 1) Stable growth, 2) Top priority on expansion, 3) Under reorganization and curtailment, and 4) In need of measures. As a result, 79 pachinko parlor operator groups were in “Stable growth,” 60 groups were “Top priority on expansion,” 26 groups were “Under reorganization and curtailment,” and 31 groups were “In need of measures.”

The “Stable growth” pachinko operator groups were those that increased their group-wise business size and had larger number of machines than average which was more than 500 (therefore, the parlor size was larger than nationwide average), indicating that they had competitive edge both in group and parlor. Among the 10 leading pachinko parlor operator groups, those that fell into “Stable growth” were: Maruhan Corporation, Nobuta Group, NEXUS, NIRAKU CORPORATION, The Palazzo Tokyo Plaza Group, GARDEN GROUP CO., Ltd., and VEGASVEGAS.

The “Top priority on expansion” pachinko operator groups were those that increased their group-wise business size, but had smaller number of machines than average which was smaller than 500 (therefore, the parlor size was smaller than nationwide average). The size of the group was increasing, but the parlor size was not stable. Among the 10 leading pachinko parlor operator groups, those that fell into “Top priority on expansion” were: DYNAM Co., Ltd. and Undertree Corporation.

The “Under reorganization and curtailment” pachinko operator groups were those that reduced their group-wise business size, but had larger number of machines than average which was larger than 500 (therefore, the parlor size was larger than nationwide average). The groups might be either those that had already finished liquidizing non-profit-making parlors, or those that were currently in the process of doing it. Among the 10 leading pachinko parlor operator groups, the one that fell into “Under reorganization and curtailment” was: GAIA Co., Ltd.

The “In need of measures” pachinko operator groups were those that reduced their group-wise business size, and had smaller number of machines than average which was smaller than 500 (therefore, the parlor size was smaller than nationwide average). They were in a predicament where appropriate “scrap & build” must be done as soon as possible. The long-established companies that had opened multiple parlors simultaneously in their early days tended to fall into this category. These pachinko parlor operators seemed to be in the following statuses: Not able to stop closing parlors one after another though having closed some desperate ones, or left with small-scale parlors after larger ones (or promising ones) were already sold to other companies. No company among the 10 leading pachinko parlor operator groups fell into “In need of measures.” 

Noteworthy Topics

With 562 Pachinko Parlors Closed in 2019, Closure Rate 6%

The research took place by extracting 9,783 parlors in operation as of end of December 2018 from YANO pachinko database to find out the business statuses (closed or continued being in operation) at the end of December 2019. As a result, the number of parlors closed by the end of December 2019 was 562 and the rate of closure was 6%.

When compared this with the previous year, the number of closures decreased by 62. Although the number of closures decreased for 2 years in a row, it can rapidly expand in 2020, as many parlor operators face predicament of being forced to replace pachinko and pachislot models (from #5 to #6 machines) to comply with the new standards, in the status where they cannot avoid sales decrease as COVID-19 pandemics forcing them to refrain from opening their parlors or shorten the business hours.

Research Outline