‘Severe’ business climate drags down Dynam Pachinko sales

‘Severe’ business climate drags down Dynam Pachinko sales

Dynam Japan Holdings Co., Ltd. reported revenue of ¥109.82 billion ($1.00 billion) for the nine months ending December 31, 2018, a 4.6% decline from the corresponding period in 2017.

In a filing with the Hong Kong Stock Exchange, the firm attributed the fall in revenue to a continuing “severe business environment,” under which “the Group has made efforts to grow and develop ‘Severe’ business climate drags down Dynam Pachinko saleswith local communities and to improve the machine utilization through various kinds of business measures under the important policies of setting up our halls from the customers’ viewpoint and operating each of our halls with a focus on customers’ needs.”

High playing cost machine Pachinko halls, totaling 180, had a combined revenue of ¥54.92 billion ($502.41 million), 6.8% less than April to December of 2017.

Low playing cost halls, numbering 270, brought in ¥54.90 billion ($502.23 million).

The company said it was aiming to further accessibility of Pachinko, and is opening more low playing cost halls “to expand the market shares in the industry.”

Total gross pay-ins, or the amounts received from Pachinko balls and Pachislot tokens rented to players minus unused balls and tokens, totaled ¥573.77 billion ($5.25 billion), 1.7% lower year on year. Of this, ¥330.20 billion ($3.02 billion) came from high playing cost halls, where gross pay-ins shrank 4.0%. Low playing cost halls’ gross pay-ins, on the other hand, amounted to ¥243.57 billion ($2.23 billion), increasing 1.6% year on year.

Gross payouts totaled ¥463.95 billion ($4.24 billion), 1% less than in the nine months ended December 31, 2017. Gross payouts for high playing cost halls were ¥275.29 billion ($2.52 billion), down 3.5% year on year, while low playing cost halls’ gross payouts rose 2.8% to ¥188.67 billion ($1.73 billion).

“The Company is continuously committed to reducing hall operating expenses especially focusing on management of machine expenses thereby securing profitability,” Dynam said.

Last November, the company also reported a fall in revenue for the six months up to September 30, of 4.7%. However, it reported net profit increasing 53.6% year on year.

Pachinko demand in Japan has been falling, with 420 Pachinko halls closing in the country in 2017. The declining interest in the game is said to be due to increasing options for gaming, and the anticipation of integrated resorts (IRs) opening sometime in 2025. It doesn’t help that politicians oppose the game for supposedly being a moral threat to society.

Pachinko game developer Sega Sammy, likely aware of the dwindling market, is positioning itself in the casino business, being a partner of Paradise Co. in operating South Korea-based Paradise City. The company, which has seen incomes falling of late, is also looking for a partner in the development of a local IR.