Fluctuations in Pachinko Hall Capital Investment Driven by Legal Regulations and Industry Self-Regulation

「As of the end of March 2026, smart machines accounted for 42.7% of all gaming machines installed, up 12.7 percentage points year on year. By category, smart pachislot machines accounted for 61.1%, up 9.0 percentage points, and had become established as the main machines at pachinko halls. Smart pachinko machines accounted for 28.5%, up 14.4 percentage points, representing significant growth from the previous year.」

「スマート遊技機は今後もファンからの支持を得ながら設置割合を拡大していくものと見込まれ、これに伴い、パチンコホールにおけるスマート遊技機の導入・運用に対応するための設備投資需要も堅調に推移すると想定されます。」

「Approximately 3 years have passed since smart gaming machines were introduced to the pachinko industry in which our group operates. At the end of the interim consolidated accounting period, smart pachislot machines accounted for 56.3% of all pachislot machines installed, up 1.8 percentage points from the end of the first quarter, while smart pachinko machines accounted for 23.3% of all pachinko machines installed, up 6.1 percentage points from the end of the first quarter (based on the company's DK-SIS data).」

「As of the end of March 2025, adoption of smart gaming machines had progressed. Smart pachislot machines, whose adoption began ahead of other machines in November 2022, accounted for 52.1% of all pachislot machines installed, up 15.7 percentage points year on year, as the number of machines installed grew steadily. Smart pachinko machines, whose adoption began in April 2023, accounted for 14.1%, up 9.4 percentage points year on year.」

「At the end of the interim consolidated accounting period, smart pachislot machines accounted for 46.6% of all pachislot machines installed, up 4.3 percentage points from the end of the first quarter, while smart pachinko machines accounted for 8.7% of all pachinko machines installed, up 3.7 percentage points from the end of the first quarter (based on the company's DK-SIS data).」

「The pachinko industry remains in a difficult operating environment, with the number of pachinko halls in operation and the number of gaming machines installed continuing to decline. As of the end of March 2024, however, adoption of smart gaming machines had progressed more than initially expected. Smart pachislot machines, whose adoption began ahead of other machines in November 2022, accounted for 36.4% of all pachislot machines installed, up 28.2 percentage points year on year, as several machines that gained strong support from fans were launched in the market.」

「Strong capital investment demand resulting from the introduction of smart gaming machines continues among companies operating pachinko halls.」

「Capital investment in equipment compatible with smart gaming machines is expected to become more active, with investment related to pachislot machines, where recovery is clearly underway, expected to remain the main focus for the time being.」

「Capital investment in equipment compatible with smart gaming machines is expected to become more active, with investment related to pachislot machines, where recovery is clearly underway, expected to remain the main focus for the time being.」

「Market expectations for smart gaming machines are high. As of the end of the third quarter, smart pachislot machines accounted for 6.0% of all pachislot machines installed, based on the company's DK-SIS data. As this proportion is expected to increase, capital investment in equipment compatible with smart gaming machines is expected to become more active.」

「During the cumulative second-quarter period of this business, the environment was difficult, with operators holding back on new openings and major renovation work while assessing developments in smart gaming machines as their planned introduction approached. However, expectations for smart gaming machines have led to increasingly active preliminary capital investment ahead of their introduction.」

「There was a difficult environment in which operators were holding back on new openings and major renovation work while assessing developments in the smart gaming machines (smart pachinko and smart pachislot machines) scheduled to enter the market this autumn. However, small-scale renovation work converting some pachinko halls from pachislot machines to pachinko machines, whose utilization remained solid, continued, and there was demand to replace old equipment.」

「Under the new regulations that took effect on 1 February 2018, removal of old-regulation machines was substantially complete by the end of January 2022, and pachinko and pachislot machines had been replaced with machines compliant with the new regulations. Operators, particularly major companies, were exploring business models centered on pachinko machines, whose recent performance had remained stable, while demand for sluggish pachislot machines was expected to recover with the new Type 6 machines (Type 6.5 machines) scheduled for delivery around the end of May 2022.」

「Next, regarding the replacement of old-regulation machines, whose installation deadline was the end of January 2022, with new-regulation machines, the replacement rate for pachinko machines was 88% at the end of December 2021, up 8 percentage points from the end of September, indicating steady progress. For pachislot machines, where utilization remained sluggish, the rate rose to 71%, up 13 percentage points from the end of September, accelerating the pace of progress, but remained 17 percentage points below pachinko machines (company estimate). Pachinko hall capital investment continued to show a tendency to avoid large-scale investments such as new openings and major renovation work, while small-scale renovation work carried out alongside the replacement of old-regulation machines with new-regulation machines was on an increasing trend.」

「In the gaming machine market, the phased replacement of old-regulation machines, whose installation deadline was the end of January 2022, with new-regulation machines is progressing. As of the end of September 2021, the replacement rate for new-regulation pachinko machines was 80%, reflecting solid utilization, and progress was steady. For pachislot machines, where utilization remained sluggish, the rate was 58% and progress lagged (company estimate). However, pachislot machines using the 6.2 standard, which relaxed the game-count restrictions in advantageous sections, entered the market in September 2021, drawing attention to future utilization.」

「Gaming machine utilization had recovered to approximately 80% of the level two years earlier, before the COVID-19 pandemic, namely the cumulative consolidated period for the first quarter of the fiscal year ended March 2020 (based on a comparison of the company's DK-SIS data). However, as the resurgence of the infectious disease and the timing of its resolution remained difficult to predict, it was expected to take some time for utilization to recover fully. In the gaming machine market, the phased replacement of machines under the former regulations, whose installation deadline was the end of January 2022, with New Regulations-compliant machines was under way. As of the end of June 2021, the replacement progress rate for New Regulations-compliant machines had risen 7 percentage points from the end of the fiscal year ended March 2021 to 72%, but remained low at 55% for pachislot machines, an increase of 5 percentage points, because utilization of New Regulations-compliant machines was sluggish (based on the company's estimates).」

「As of the end of March 2021, the replacement progress rate for pachinko machines was 65%, supported by the emergence of multiple hit models and the growing introduction of Yutai Time machines, which were attracting new fan segments. For pachislot machines, however, the progress rate remained low at 50% because utilization of New Regulations-compliant machines was sluggish (based on the company's estimates).」

「However, pachinko machines equipped with Yutai Time were gradually introduced by various manufacturers as flagship titles, raising expectations for a recovery in gaming machine replacement demand.」

「Regarding capital investment at pachinko halls, caution toward investment in new store openings and major refurbishment work intensified as concerns about a resurgence of the infectious disease spread. Regarding gaming machine replacements, caution toward replacing machines with New Regulations-compliant machines continued due to the partial extension of the removal deadline for machines under the former regulations and the resurgence of the infectious disease.」

「Pachinko hall operators continued to take a cautious approach to replacing machines with New Regulations-compliant machines, partly because the removal deadline for machines under the former regulations had been extended. However, following the amendment of the technical standards interpretation criteria implemented in January 2020 and the resulting internal rules established by the Japan Amusement Machine Industry Association, machines offering new ways to play, such as Yutai Time, were gradually introduced to the market, and some pachinko machines began to achieve high utilization. This has raised expectations for a recovery in gaming machine replacement demand.」

「Replacement of machines under the former regulations with New Regulations-compliant machines remained sluggish because the removal deadline for machines under the former regulations had been extended. In the equipment market, the amended Health Promotion Act took effect in April 2020, making pachinko hall facilities entirely smoke-free and leading to the installation of smoking rooms.」

「In the pachinko industry in which the Group operates, the trend toward fewer new stores and major refurbishments continued due to compliance with the order partially amending the Enforcement Regulations under the Act on Control and Improvement of Amusement Business and the Regulations on Certification and Type Approval of Gaming Machines, the Basic Act on Measures to Prevent Gambling Addiction, and the amended Health Promotion Act strengthening passive-smoking controls. In addition, pachinko halls remained in an extremely difficult situation as investment in peripheral equipment was restrained because priority was given to removing and replacing pachislot machines under the former regulations whose certifications expired in December 2019.」

「In the pachinko industry, the environment surrounding the industry remains challenging as companies increasingly refrain from investing in new outlets and large-scale renovations in response to the Regulation for Partial Revision of the Enforcement Regulations of the Act on Control and Improvement of Amusement Business and the Regulation on Certification and Type Testing of Gaming Machines, the Basic Act on Measures to Prevent and Address Gambling Addiction, and the revised Health Promotion Act, which strengthens measures against secondhand smoke.」

「Although caution toward new store openings and refurbishments continued, demand for capital investment to attract customers temporarily increased during the Golden Week sales season, which lasted 10 consecutive holidays. The industry also needed to address in sequence issues including the Basic Plan for Promoting Measures to Prevent Gambling Addiction approved by the Cabinet on 19 April 2019, the amended Health Promotion Act strengthening passive-smoking controls, and the transition to New Regulations-compliant machines following the expiration of existing certifications.」

「The pachinko industry has continued to shrink, reflecting a declining trend caused by factors including the falling number of players. As regulations on gaming machines have been strengthened through legal amendments and the outlook has become difficult to assess, pachinko hall capital investment has been restrained and gaming machine manufacturers have also faced challenging operating conditions.」

「In the pachinko industry in which the Group operates, manufacturers began introducing New Regulations-compliant gaming machines, including pachinko machines with performance settings, and Class 6 pachislot machines, and market attention focused on their reception. However, the number of units sold and the number of models remained limited, and machines under the former regulations continued to account for the majority of pachinko hall operations. Meanwhile, as responding to the amended Health Promotion Act to strengthen passive-smoking controls, which fully took effect on 1 April 2020, became an urgent issue, pachinko halls proceeded to consider measures including installing smoking rooms.」

「In the pachinko industry in which the Group operates, responding flexibly to changes in the business environment resulting from measures including the Basic Act on Measures to Prevent Gambling Addiction, passed on 6 July 2018, and the amended Health Promotion Act to strengthen passive-smoking controls, passed on 18 July 2018, became an urgent issue.」

「In the pachinko industry in which the Group operates, the impact of the New Regulations, which took effect on 1 February 2018, continued, resulting in a difficult business environment marked by fewer new stores and refurbished locations. In addition, it became necessary to respond flexibly to changes in the business environment, including measures to address addiction under the Basic Act on Measures to Prevent Gambling Addiction and measures under the bill to amend the Health Promotion Act to strengthen passive-smoking controls.」

「The pachinko industry in which the Group operates faced a difficult business environment, as caution toward capital investment continued amid uncertainty over the impact on pachinko hall performance of the order partially amending the Enforcement Regulations under the Act on Control and Improvement of Amusement Business and the Regulations on Certification and Type Approval of Gaming Machines, which took effect on 1 February 2018 (the "New Regulations").」

「In the pachinko industry, caution continued amid uncertainty over the impact on hall performance of the order partially amending the Enforcement Regulations under the Act on Control and Improvement of Amusement Business and the Regulations on Certification and Type Approval of Gaming Machines, which was due to take effect on 1 February 2018.」

「The uncertain outlook continued, including the company's future response following the promulgation on 4 September 2017 of the order partially amending the Enforcement Regulations under the Act on Control and Improvement of Amusement Business and the Regulations on Certification and Type Approval of Gaming Machines (effective 1 February 2018).」

「Following the enactment of the bill on the development of integrated resorts, addressing addiction at pachinko parlors became an urgent issue, and the outlook for tighter controls on gambling inducement created a difficult business environment in which uncertainty led to growing caution toward capital investment in new stores and peripheral equipment at existing locations.」

「The pachinko industry in which the Group operates continued to face difficult market conditions, including the collection and removal by the end of December 2016 of "pachinko machines that may differ in performance from their certified models" and poor performance of new-standard pachislot machines.」

「With the removal and collection deadline for "pachinko machines that may differ in performance from their certified models" set at the end of December 2016 approaching, the decline in new stores and continued caution toward investment in peripheral equipment at existing locations made the business environment challenging.」

「In the pachinko industry in which the Group operates, the number of new and refurbished stores declined due to restrictions on machine replacements associated with the Ise-Shima Summit, while pachinko hall operators remained cautious about capital investment in existing locations pending the removal and collection of "pachinko machines that may differ in performance from their certified models." The difficult business environment therefore continued.」

「The business environment surrounding the Group became increasingly challenging, as the addition of self-regulatory measures for pachinko and pachislot machines reduced customers' willingness to invest in existing pachinko hall locations.」