Sun, Aug 24, 2014 page14

• Japan’s pachinko industry cleans up to stop decline

  • By Minami Funakoshi / Reuters, TOKYO
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  Japan’s once-booming pachinko industry, grappling with a graying customer base and the threat of new competition from casinos, is adopting a softer touch and smoke-free zones to lure a new generation of players, particularly women.

  Pachinko, a modified version of pinball, is a fading national obsession, with about 12,000 parlors nationwide and one in 13 people playing the game.

  However, that figure is declining as the population shrinks and younger people prefer games on their mobile phones.

  

  Dynam employees bow in a prescribed way as they receive customer-care training ahead of the grand opening of the company’s pachinko parlor in Fukaya, north of Tokyo, on July 29.

  Photo: Reuters

  To try and reverse the trend, some pachinko operators have built spacious, airy parlors designed to attract more women and younger players to a pastime tarred by its association in the public mind with older and idle men given to chain smoking.

  Catering to different tastes to boost an industry that still sees about US$185 billion wagered annually, machines in pachinko parlors now feature anime characters, games and idols, ranging from all-girl group AKB48 to Resident Evil, a videogame blockbuster by Capcom Co that was made into a Hollywood film.

  “We’re trying to change the image of pachinko as loud, smoke-ridden and male-dominated,” said Tomoko Murouchi, a spokeswoman for one of the largest operators, Dynam Japan Holdings.

  

  Visitors play at Dynam’s pachinko parlor in Fuefuki, west of Tokyo, on June 19.

  Photo: Reuters

  Dynam, which has 371 pachinko parlors around Japan, is building new game centers with higher ceilings, smoke-free zones and ventilators, with dividers between machines for privacy.

  Rival Maruhan Corp, Japan’s largest pachinko chain by money wagered, has tried opening buffets at parlors and promoting a new kind of pachinko, but has recently shifted focus back to existing players, spokesman Kenjiro Shimoda said.

  More than half of Dynam’s customers are older than 50, with just 9 percent younger than 30. However, the number of youthful players has almost doubled from 5 percent in 2006.

  

  A combination photo shows pachinko machines at Dynam’s pachinko parlor in Fuefuki, west of Tokyo, on June 19.

  Photo: Reuters

  About 200 people queued at the recent grand opening of a Dynam parlor in Fuefuki City, 100km west of Tokyo.

  Although women make up just 27 percent of players at Dynam’s parlors, Marina Osada, a clerk, said she played pachinko three times a week, sometimes for the entire day when she was off work.

  “I still remember the day I hit a jackpot and saw a very rare — the best — scene from the anime Basilisk. I was so happy,” said Osada, 21, who looks for machines that feature her favorite anime.

  “Pachinko used to be just for men, but I like pachinko. I come alone, and just focus,” she said.

  Pachinko revenues are falling as Japan’s population ages.

  Gross revenue has shrunk to ￥19 trillion (US$185.75 billion) from ￥31 trillion over the past two decades, and the number of players halved between 2002 and 2012, research by investment bank Morgan Stanley shows.

  Part of the problem has been a 15-year economic slump just ending. Spending on all kinds of leisure has dropped by almost a third over the past 20 years, but the number of players per machine has roughly halved since 2000 to stand at just over two in 2012, Morgan Stanley estimates.

  Japan’s moves to legalize casino resorts could force pachinko out of the gray zone where it has thrived for decades. It faces no gaming taxes, since it is not treated as gambling, which is illegal, but is viewed instead as an amusement.

  Pachinko began as a children’s toy in the 1920s, which gained popularity among adults after World War II.

  Machines spew out winnings in the form of small metal balls. Most players opt to swap winnings for cash, with 87 percent of players at Dynam going this route.

  Maruhan and Dynam have fared better than the rest of the industry, which is dominated by family-owned firms. Maruhan’s annual revenue after payouts was about ￥80 billion for the fiscal year that ended in March, up about 16 percent from 2012. For Dynam, revenue was flat over the same period.

  However, even big operators face difficulties, one expert says.

  “Every year, fewer and fewer people are playing pachinko,” said Tohru Okazaki, who has published five books on the industry. “Young people are simply not playing.”

  Young people stopped because payouts are smaller and they find it harder to borrow money, said Naomi Suzuki, whose family runs a chain of parlors in the Fukushima Prefecture that was hit by the 2011 earthquake and the nuclear crisis that followed.

  “Twenty years ago, pachinko parlors were full of young people, but now it’s mostly all middle-aged and old people that come and play,” Suzuki said. “Young people have no money.”
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