Market Overview

The number of pachinko parlor operators declined by 228 companies from the previous year (down 11.1% from the previous year) to 1,825 at year-end of 2023. The number of corporate groups decreased by 171 from the preceding year (down 10.6% on the same basis) to 1,447. The number of pachinko parlors operating nationwide diminished by 526 parlors from the previous year (down 7.1% on the same basis) to 6,839.

The number of pachinko parlors has been decreasing for a long time due to the sluggishness in economic environment of pachinko industry.
The 2018 revision of the regulation governing pachinko and pachislot machines mandated parlor operators to replace old models to new models that comply with new standards by the end of January 2022. While the cost of replacement choked many pachinko parlor operators, their operations were jeopardized further by activity restrictions during the Covid-19 crisis in 2020. Under the circumstances, even large operating companies had to shut parlors that are deemed unprofitable even if they undergo replacements. Meanwhile, smaller parlor operators closed their pachinko parlors one after another.

In 2022, parlor closures increased to 774, which is worse than 639 in 2021, due to the rapid increase of closures at the end of January along with the deadline for the replacement of gaming machine, while the market environment did not show signs of recovery.
Entering 2023, with completion of the gaming machines replacements and recovery in business performance for pachislot business in particular (stemming from the introduction of “smart pachislot*” from November 2022), the number of parlor closures lessened and the rate of decrease improved slightly. Still, the number of parlors closed continued to remain high.

* “Smart pachislot (sma-slo)” is a type of pachislot machine that uses digital medals instead of physical medals. A type of pachinko machine with similar system, i.e., which circulates balls within a gaming machine so that players do not have to touch them while playing, is called “smart pachinko (sma-pachi)”. Revised regulations (of Nihon Yugiki Kogyo Kumiai [Nikkoso], the association of pachinko machine manufacturers) have made more diverse game designs possible for “smart” pachinko and pachislot gaming machines.

Noteworthy Topics

Number of New Pachinko Parlors Counted 116 in 2023, Exceeding 100 for The First Time in 3 Years

The number of pachinko parlors that had newly opened in 2023 increased by 17 from the previous year to 116, surpassing one hundred for the first time in three years. Along with the strong sales of “smart pachislot”, store rollouts were witnessed chiefly among large parlor operators. Meanwhile, the number of large-scale parlors with more than 1,000 gaming machines are keeping up with above-10 store levels, although the total number decreased from the previous year by 4 to 17 parlors.

Future Outlook

With a wide range of gameplay, the “smart pachislot” released in November 2022 has been earning popularity, helping the revitalization of the pachislot business that was stagnant. Players in their young/prime age, between 20s to 40s, are particularly in favor of the smart pachislot, and the sales is recovering mainly on gaming machines that feature anime characters that are popular among these segments.

Nevertheless, to deploy a “smart pachislot system”, not only the pachislot machine but also its peripheral equipment like “CR units” must be newly introduced, while installation work will also be required.  Introduction of the smart pachislot system is quite expensive.
Besides the introduction of costly smart gaming system, parlor operators are compelled to upgrade their facilities and equipment for new banknotes in 2024. Under the circumstances, we assume that the number of pachinko parlor operators and the number of parlors continue to wane hereafter, especially pachinko parlors with smaller parlors and/or fewer gaming machines.

Research Outline