25 October 2016
To improve its performance, Dynam Japan plans to lure more female and elderly players to its Pachinko parlors. Photo: HKEJ
To improve its performance, Dynam Japan plans to lure more female and elderly players to its Pachinko parlors. Photo: HKEJ

Why a Pachinko operator is eyeing female and elderly players

Pachinko was once a big rage in Japan, with locals as well as tourists flocking to whatever parlors they could find.

But in recent years, the Japanese arcade game — which is a combination of a pinball and a slot machine — has lost its shine as people took to internet games and smartphone games.

The fading appeal of Pachinko is reflected in the financials of Dynam Japan (06889.HK), which operates several game parlors in Japan.

The company has announced a 47 percent slide in profit for the year ended March, at HK$729 million. Apart from diminished customer patronage, profitability was also hurt by an increase in Japan’s sales tax rate last year.

To improve its performance, Dynam Japan is exploring ways to expand its customer base.

A key element of the strategy is to attract more female and elderly players, going beyond the current male and youth-dominated clientele.

Currently, 70 percent of Pachinko players in Japan are male, according to Japanese research institute EBI.

Dynam Japan’s chief executive Kohei Sato told the Hong Kong Economic Journal that the company has already set up a team to figure out a strategy to attract women players.

The company aims to boost the proportion of female customers to 40 percent in the future.

Meanwhile, the group will lower the minimum bet of some devices to lure more elderly to play Pachinko. As of 2013, around 30 percent of Pachinko players were above the age of 60.

Moreover, the group will keep raising its payout ratios. As customers are very sensitive to payout ratios, the group increased its payout ratio by 1.3 percent point in the last financial year, Sato said.

In other comments, Sato said that though the group has no experience in operating casinos, it will seek industry talent from Macau to help the group expand into the gaming industry. 

The interest in the gaming sector comes even as Macau’s gaming revenue has shrunk for the twelfth consecutive month.

According to official data, Macau’s gross gaming revenue dropped 37.1 percent to about US$2.5 billion in May, when compared with a year earlier.

The city’s prospects could become bleaker if the Japanese government grants its first gaming license in the country as soon as August.

Media reports have said that Macau’s large casino operators are interested in setting foot in Japan’s gaming sector.

However, Yoji Sato, chairman of Dynam Japan, says the chance of foreign conglomerates getting a license is slim.

The aim of the Japanese government to legalize the casino sector is to boost the economy. Authorities will favor domestic firms in any license decision.

Given such expectations, Dynam Japan, for one, appears ready to throw its hat into the ring.

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EJ Insight writer

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