An overall decline in Japan’s pachinko and pachislot business has continued to take its toll on the country’s pachinko operators.
On Tuesday, Okura Holdings reported a decrease in revenue of 0.6 percent for the six months ended December 31, 2017, which it attributed to an overall decline in the pachinko industry.
The company derives most of its earnings from its pachinko and pachislot business, with the company running 19 pachinko halls in the country under the names Big Apple; K’s Plaza; Big Apple. YOUPARK and Monaco.
Okura said the pachinko industry’s downward trend was caused by increasing competition from other forms of entertainment in Japan and curbs on the industry.
The company noted that on February 1, 2018, the National Public Safety Commission of Japan issued new regulations which further limited the pay-out ability of both pachinko and pachislot machines.
As a result, according to Okura, “it is likely that the attractiveness of the pachinko and pachislot machines to customers, especially young customers, and the profitability of the operation of such machines will be adversely affected going forward.”
To combat this, the company says it and other pachinko hall operators have installed a higher proportion of high playing costs machines to attract customers.
Okura also went on to say that while Japan’s pachinko industry is likely to continue facing significant threats, including increased scrutiny brought on by IR legislation, pachinko remains as the largest contributor to the Japanese entertainment market in terms of market share.
The company said this will present consolidation opportunities for larger market players.