No.2645
02/18/2021
Pachinko Parlor Operators in Japan: Key Research Findings 2020

Financial Results of 131 Pachinko Parlor Operators for FY2019 Shows Decrease in Income and Increase in Profit

Yano Research Institute (the President, Takashi Mizukoshi) has estimated the average values on major indices of 131 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 131 companies for transition in 3 years)
Transition of Pachinko Parlor Operators’ Business Performances (average of 131 companies for transition in 3 years)

Summary of Research Findings

This research is based on a calculation of average values for major financial indices of 131 pachinko parlor operators extracted randomly from 2,609 pachinko parlor operators nationwide that are listed in the “YANO Pachinko Database”. Analysis is conducted for 3 years from FY2017 to FY2019.

 

Noteworthy Topics

Trends of Sales/Profit at 131 Pachinko Parlor Operators

<Sales/Sales Cost>
Comparing the average sales for FY2019 (20,834 million yen) to that of FY2017, it dropped by 5.1%. It is assumed that decrease of the number of customers and shift to new gaming machines caused the significant decline in sales. Although the average sales cost sustained composition ratio of 85% over the past few years, it diminished to 85.1% in FY2018 and 85.0% in FY2019.
<Gross Margin >
By driving down the sales cost, composition ratio of gross margin in FY2019 rose by 0.1 point from the previous fiscal year to reach 15.0%. Nevertheless, the average gross margin dropped to 3,116 million yen, down 1.6% from the previous fiscal year. While there are companies holding down their sales cost to secure gross margin, it is not enough to compensate for the decline in sales.
<SGA>
The average SGA for FY2019 diminished by 3.0% from the preceding fiscal year, while composition ratio also dropped by 0.1 point. However, as mass replacement of old gaming machines with new gaming machines will be required toward FY2021 in order to comply with the revision of Gaming Machine Guidelines which came into force in February 2018, it is assumed that SGA will swell hereafter, exerting pressure on corporate profits. 
<Profit>
Due to reductions in sales cost and SGA, the profit continues to rise; it rose by 9.2% year-on-year in FY2018, by 7.0% year-on-year in FY2019. Similarly, composition ratio has been increasing, from 1.8% in FY2017 to 2.0% in FY2018, onto 2.2% in FY2019.

Research Outline

1.Research Period: September to December 2020
2.Research Object: Pachinko parlor operators
3.Research Methogology: Data aggregation and analysis by our specialized researchers on “YANO Pachinko Database”

Pachinko Parlor Operators

This research is based on a calculation of average values for major financial indices of 131 pachinko parlor operators chosen from 2,609 pachinko parlor operators nationwide that are listed in the “YANO Pachinko Database”. Conditions for extraction are as noted below. Analysis is conducted for 3 years from FY2017 to FY2019. 
Targeted pachinko parlor operators are 12 major companies (operating more than 20 parlors), 28 second-tier companies (operating 10 to 19 parlors), 36 mid-size companies (operating 4-9 parlors), and 55 small-size companies (operating 1-3 parlors) chosen at random. Average number of parlors operated by the 131 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.


 

<Products and Services in the Market>

Pachinko Parlors and Parlor Operators

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