Summary of Research Findings

This research study randomly sampled 106 pachinko parlor operators from a total of 1,612 operators listed in the "YANO Pachinko Database." Using the average value of key indicators in their financial statements, the study identified business performance trends over three years from FY2022 to FY2024.
In FY2024, the average sales amount for the 106 companies was 17.432 billion yen. On average, the cost of sales was 14.882 billion yen (85.4% of sales), SG&A was 2.313 billion yen (13.3%), and operating profit was 237 million yen (1.4%).

Sales increased for two consecutive years, with FY2023 up 8.8% year-over-year, and FY2024 up 7.1%. These increases were driven by the recovery in the pachislot sector. Since the smart pachislot market launched in November 2022, pachinko parlor operators have strengthened their investments in this sector. Conversely, the pachinko sector is becoming more challenging. Some operators are reducing pachinko machines while increasing pachislot machines.

*) A “smart pachislot” is a pachi-slot machine that uses digital instead of tangible medals to play. Revisions to the Nihon Yugiki Kogyo Kumiai (Nikkoso) regulations have expanded the range of possible machine specifications, enabling the development of smart gaming machines with diverse gameplay features.

Noteworthy Topics

Financial Performance Trends of 106 Pachinko Parlor Operators

[Sales and Cost of Sales]
In FY2024, sales increased by 7.1% from the previous fiscal year, due to the recovery of the pachislot sector. Smart pachislot has rapidly expanded its installations since its launch in November 2022 and contributed to the sales increase since FY2023. Proactive investments in pachislot, including increased installations, have impacted the performance of pachinko parlor operators.
The cost of sales was 85.4% of sales in FY2024, an increase of 0.2 percentage points from the previous fiscal year. This was a minor change, as the cost of sales has remained at just over 85% for several years.

[Gross Margin]
The gross margin was 14.6% of sales in FY2024, a 0.2 percentage point decrease from the previous fiscal year due to a slight increase in the cost of sales percentage. However, alongside the year-over-year sales increase, the gross margin itself increased by 6.2% from the previous fiscal year.

[SG&A Expenses]
SG&A expenses have continued to increase. Their ratio to sales decreased from 15.0% in FY2022 to 14.0% in FY2023, and to 13.3% in FY2024. Nevertheless, these figures are higher than the 12.5% recorded in FY2019.  

[Operating Income]
Operating income grew significantly, reaching 88.2% in FY2024. Although the operating income ratio to sales increased by 0.6 percentage points, it remained low at 1.4%.

Research Outline