Market Overview

The number of pachinko parlor operators as of the yearend of 2021 decreased by 230 from the previous year to 2,347. It has been waning since 2013, with 100 companies diminishing each year. For over 10 years the number has been on the fall, with sharp drop from 2018 with more than 200 companies going out of business per year.

Meanwhile, the number of company groups, consolidated by the capital or the same management, dropped to 1,826 groups, down by 152 groups during the period between the yearends of 2020 and 2021.

In addition, the number of pachinko parlors operating nationwide as of the end of December 2021 fell to 8,139, a decline by 639 parlors from the preceding year. A total of 2,539 parlors decreased in five years since December 2016.

Under the provisions of the Gaming Machine Guidelines revised in February 2018, pachinko parlors are required to replace old gaming machines with new gaming machines that comply with new standards by the end of January 2022.

Because the new gaming machine has lower probability of hitting a jackpot (which is not welcomed by pachinko players) annual turnover is expected to drop after the replacements. With huge replacement cost and decline of players due to COVID-19 outbreak, business performance of pachinko parlor operators worsened, particularly at the small-size companies owning only one or two parlors and companies that operate parlors with fewer gaming machines.

Noteworthy Topics

Only 93 New Store Opening in 2021

The number of pachinko parlors newly opened in 2021 fell by 33 from the previous year to 93 parlors. New store opening slowed down since 2013. Although it rose in 2020 for the first time in 7 years, the number dropped again in 2021. In anticipation of gaming machine replacement that decreases store sales, parlor operators refrained from opening new stores. Damaged further by the spread of COVID-19 that started in 2020, the industry has seen many deferrals and cancellations of new store openings.

When observing the newly opened parlors by region, new store opening was witnessed the most in Tokyo, Kanagawa, and Shizuoka. They were the only prefectures that had an increase of more than 10 stores.

Pachinko parlor business is experiencing difficult business conditions. Still, leading operators in a financial position to invest massively have increased large-sized parlors with more than 1,000 machines. There has been an increase overall of 11 such parlors in 2021, 6 more new store openings than the previous year.

Future Outlook

The number of bankruptcies/closures of pachinko parlor operators is projected to decrease in 2022 as completion of gaming machine replacements, which required huge investments, improves its financial conditions. Although the declining trend is presumed to continue, the level of decrease will be at a slower pace.

Since store sales have not returned to the pre-pandemic level, further bankruptcies are expected, especially among companies that operate small parlors with low profitability, or pachislot specialty parlors going through a marked decline in sales.

The number of new pachinko parlor operators is expected to recover to some extent, as pachinko parlor operators eager to open new stores are likely to take aggressive stance in operation upon completion of the gaming machine replacements. Nevertheless, the number of new stores will not exceed the number of closures, and the number of pachinko parlor operating nationwide is forecasted to dwindle.

Research Outline