Cleaner, cuter smoke-free facilities drawing women, younger crowds Pachinko parlors bet on tidiness to reverse decline

Pachinko parlors bet on tidiness to reverse decline

by Minami Funakoshi

Reuters

The 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.

But that figure is declining as the population shrinks and younger people opt for games on their mobile phones.

To try to 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 and impaired hearing.

Catering to different tastes to boost an industry that still sees some $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 video game 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.

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, said spokesman Kenjiro Shimoda.

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

About 200 people queued at the recent grand opening of a Dynam parlor in the city of Fuefuki, Yamanashi Prefecture.

Although women make up just 27 percent of players at Dynam’s parlors, Marina Osada, a clerical worker, said she played pachinko three times a week, or 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.”

Pachinko revenues are falling as the population ages. Gross revenue has shrunk to ¥19 trillion ($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. 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 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, and 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.

But 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.”

They stopped because payouts are smaller and they find it harder to borrow money, said Naomi Suzuki, whose family runs a chain of parlors in Fukushima Prefecture, which 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.”