Japan’s pachinko industry remains a multi-trillion-yen business, but its long-term contraction is accelerating under demographic pressure, strict regulation and changing entertainment habits.
While once considered the nation’s largest leisure industry, recent data show a steep decline.
According to the most recent statistics available, in 2023, pachinko machines in Japan generated a total of JPY8.2 trillion ($53.1 billion), while pachislot machines generated JPY7.5 trillion ($48.71 billion), with the total representing less than half the level from around two decades ago.
Meanwhile, as of the end of the same year, the number of pachinko parlors had declined by 526 from the previous year, totaling 6,839 parlors. The number of pachinko parlor operators also fell, with a decrease of 228 companies (11.1 percent) to 1,825
In an interview with AGB, Masa Suganuma, CEO of ReNeA JAPAN and a veteran game-development expert, the trajectory is clear.
“As many public reports mention, the market size of the pachinko industry has been shrinking. This trend will continue,” he said. Operators have managed to maintain overall revenue through aggressive management, but the fundamental issue remains unchanged: “The population of the players apparently has been reduced. That drives the industry’s movement.”
A demographic collapse at the core
Pachinko’s player base has aged dramatically over the past two decades.
“Around early 2000 to 2010, the main generation of the players were males in their 30s. And that generation still supports the industry after the decade,” Suganuma explained.
But the younger cohorts simply aren’t playing: “Younger generations following that one do not contribute pachinko industry revenue,” noted the expert.
Parlors have attempted to lure younger customers through social media promotions and influencer-driven content, but the impact has been muted. “The parlors try to catch younger generations’ interests with SNS, social media activities. However, due to advertising regulations, they have a certain amount of limitations,” he said.
Nevertheless, the cultural pull of pachinko persists. “Currently almost all pachinko has famous anime IP, and the graphics and movies grab the anime supporters,” he noted, describing how machine displays have become multimedia showcases tied to major franchises.
Policy climate under PM Takaichi
Japan’s new political leadership has yet to signal any major direction for the sector.
“At this stage, no positive or negative message has been shown to the industry from the new cabinet,” Suganuma said of Prime Minister Sanae Takaichi.
Concerns that crackdowns on illegal online gambling could bleed into pachinko regulation are unfounded, he argued.
“Online gambling is illegal, and it does not have any relations with pachinko,” he said. Even so, pachinko operators remain wary of policy tightening linked to gambling-addiction concerns.
Takaichi’s support for integrated resorts (IRs) is also unlikely to influence pachinko’s standing in the gaming ecosystem.
“IR does not affect anything to the pachinko industry. It is the same story as Tokyo Disneyland not affecting the arcade game center near the stations,” Suganuma said.
For operators, one of the more concrete pressures is taxation—especially consumption tax.
“The change of structure of consumption tax will affect the pachinko parlor’s operation,” he said. But with discussions currently centered on tax reduction, the immediate impact remains limited. Most operational constraints, he added, stem from the National Police Agency rather than from the cabinet.
Seeking a future beyond survival
Looking ahead, the sector faces an urgent need to rebuild its customer base.
“The most important solution would be how to increase the population of players,” Suganuma said.
He believes the path forward lies in deepening engagement with existing customers and cultivating community-driven loyalty—tools that could gradually bring in younger demographics.
“With social media and SNS, pachinko operators should increase their existent customers’ satisfaction and build good communities. That will lead the younger generation’s participation.”
But innovation remains limited by regulatory controls, particularly the strict “Huei-ho #4” technical standards governing machine performance. “This regulation gives many limitations to the industry,” he said.
Despite public perceptions that pachinko operates in a legal gray area, Suganuma stresses that the framework is already recognized by lawmakers.
“The three-store system has been recognized as legal by the Diet [Japan’s Parliament]. Therefore, pachinko operations are not gray,” he said. “The perception that they are gray is due to public rumor and the general public’s interpretation.”
“Having large companies operate pachinko parlors and properly disclosing their income and expenses will lead to transparency in the industry,” stated Suganuma.
