Pachinko: The Gambling Behemoth of Japan
Japanese culture is well-known for its love of gaming and entertainment, with the likes of Bandai Namco, Nintendo, Konami, Capcom, and Sony being major names on the global scene. However, The Land of the Rising Sun has kept one of its most popular forms of gaming to itself: pachinko. Across Japan, gamblers swarm to pachinko parlours to play the vertical pinball-type game. Annually, more is wagered on pachinko in Japan than the combined revenues of gambling super-hubs Las Vegas, Singapore, and Macau.
So, what is pachinko, how has it become so popular, and how does Japan’s game of chance compare to other gambling giants?
Inside a typical pachinko parlor
What is pachinko?
Pachinko has many similarities to western pinball with its use of small metal balls, levers, pins, traps, and other obstacles. The vertical-standing machine has players fill a basin will the small metal balls, which they pay for beforehand to use as wagers, and then flick them into the gaming zone with a lever. The newer pachinko machines have replaced the lever with a turning knob, used to control the power of the plunger that shoots the balls into play. Where the balls fall dictates the payout of balls won.
Over time, Japanese slot machines, known as "pachisuro"", have become more common in the parlours. Often in a dedicated corner, pachisuro always feature three reels and buttons which enable players to stop the spin manually. The two games are incredibly popular in Japan, with pachinko parlours in abundance across the nation.
While licensed casino businesses have only recently been legalised in Japan, make no mistake about it, pachinko and pachisuro have long been forms of gambling. The machines and style of play may be more akin to arcade gaming, but balls won can be transferred for set prizes within pachinko parlour gift shops. Then, just outside the parlour, many of those prizes have set exchange rates for real cash.
The parlours themselves are often alight with many flashing colours and are usually quite smoke-ridden on entry. Filled with buzzing noises and the sound of trickling metallic balls, pachinko parlours are quite exciting venues.
The gargantuan pachinko industry compared
The rise in popularity of pachinko and pachisuro will, in part, be down to the illegality of most gambling activity, until recent laws changed the state of play. Even though the gambling element will be of appeal to many, the games are very enjoyable, so much so that it's estimated that one out of 11 of Japan's 126.8 million people play it once a week. At the high-end of estimated net revenues, the pachinko industry accounts for $34.9 billion - greater than the state of Nevada or Macau.
Of the many companies involved in the vast market, Dynam Japan weighs in as the largest pachinko parlour operator and Universal Entertainment is one of the major pachinko and pachisuro makers. The market features many different developers and operators, not unlike its fellow massive gambling industry of online casinos.
The online casino market, mostly propelled by slot games, was valued at $45.8 billion in 2017. Across the market, there are hundreds of operators and developers contributing to the game pool. Developers like NetEnt, Play'n Go, and Playtech are among the major names of the industry, particularly when it comes to slot games, and like pachinko developers, slot game developers will utilise brands to create themed games.
Among the most popular pachinko games in Japan are major media franchises which have sold their licences to pachinko and pachisuro developers, the biggest of which include Monster Hunter, Resident Evil, Tomb Raider, Spider-Man, and Tekken. On the slot gaming front, Jumanji, Vikings, Narcos, and Lara Croft: Temples and Tombs are from media franchises and are very popular right now. That said, non-branded slots tend to do better than branded ones, with one of the most popular slot games in the world being Gonzo's Quest, according to SlotCatalog slots ranking.
According to their 2018 interim report, the Dynam Japan Group stood as the pachinko industry's leading company with 450 halls and achieved $672.9 million in unaudited revenue across six months in 2018. In the online environment, where choice is far greater and more easily accessible, NetEnt is a leading developer of games, reporting $186.9 million in revenue for the year of 2018 in their annual report. While the pachinko provider dwarfs the online casino game providers here, the two industries are headed in different directions.
It is estimated that by 2024, the global online gambling market will be worth around $94.4 billion - more than doubling since 2017. The pachinko industry, however, has been on a slide since hitting its peak of $331 billion in 1995, and was valued at around $205 billion in 2016. This is put down to its inability, thus far, to branch its appeal from its ageing audience to the next generation of players.
Despite its slide in scale, the pachinko industry is still very much the beast in the east. Given its popularity and the enjoyment gained from the game, it could well recover in the future. But unless the phenomenon of more gamblers seeking activities online is addressed, pachinko is likely to continue to slip.