Japan Pachinko Industry Projected to Decline Until 2028

The Japan Pachinko Industry is projected to shrink by 2028, with parlors dropping to 5,900 and machine units declining to around 3.08 million, reflecting market challenges.

The once-dominant pachinko industry of Japan is facing a significant decline. Recent research by the Yano Research Institute indicates a steady contraction of the market, with projections suggesting a continued downward trend until 2028.

As reported by Asia Gaming Brief, the pachinko market’s long-term decline was also attributed to the sluggish economic environment brought upon by regulatory requirement and the slow progression of improvements.

In 2023, the combined revenue generated by Japan's pachinko and pachislot machines amounted to ¥15.7 trillion, representing a significant decline of over 50% from peak levels two decades ago. 

Stringent regulatory changes implemented in 2018, requiring operators to invest in updated machines, have placed a considerable financial burden on the sector. The COVID-19 pandemic further exacerbated these challenges, disrupting operations and deterring customers. Additionally, Japan's aging population and shifting demographic trends have impacted the industry's traditional customer base.

While the introduction of "smart pachislot" machines in 2022 has generated some renewed interest, particularly among younger demographics, it has not been sufficient to reverse the overall downward trajectory. The study also noted that a significant number of parlors closed the same year. 

These innovative machines, featuring digital and touchless gameplay, have attracted a new generation of players, especially those drawn to anime-themed games. However, the industry's long-term prospects remain uncertain, as smaller establishments face increasing challenges and consolidation within the sector is expected.

As the pachinko industry continues to evolve, it will be imperative for operators to adapt to changing consumer preferences, embrace technological advancements, and implement effective strategies to mitigate the impact of regulatory changes and demographic shifts.

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