Dynam Japan aims for 10 percent market share by 2023

Thursday 27th of November 2014

Dynam Japan Holdings says it’s aiming to boost its share of the Japan pachinko/pachislot market from 3 percent to 10 percent by March 2023 by pursuing a strategy of developing multiple halls and offering low-cost games.

The Hong Kong-listed company said it’s aiming for economies of scale through adding halls and targets a total of 1,000 by the same date. The group is also proactively promoting cheaper games, which involve reducing costs to users by setting one yen per-ball and 5 yen-per-token games, as opposed to conventional 4 yen-per-ball and 20 yen-per-token games. It said other pachinko companies are also following a similar strategy.

“The pachinko industry is highly fragmented and hall operators operating networks of over 10 halls is limited to the few in the entire industry. The group held approximately 3.0 percent market share in terms of the number of halls as of December 2013. We believe that there is significant potential to expand in terms of both scale of operations and market share,” it said in a results filing to the Hong Kong Stock Exchange.

Pachinko and pachislot have been a national pastime in Japan growing to an industry worth some 18.8 trillion yen ($153 billion), according to The Leisure White Paper 2014 published by the Japan Productivity Center. The parlours also employ some 310,000 employees, which is approximately 1.5 times the number employed by Japan’s top ten automotive companies.

However, the popularity of pachinko has been on the decline, leading companies to seek alternative strategies to improve the allure of the game to the younger generation, amid a proliferation of alternative leisure activities, in particular online.

Dynam said in the six months to end-September its revenue fell 1.8 percent to 80.68 billion yen. Gross pay-ins fell to 425.2 billion yen, a decline of 9.6 percent.

The net profit for the period attributable to owners of the company was 9,040 million yen, down 12.4 percent from the prior year period.

It operated 380 halls as at 30 September 2014 up from 363 halls as at 30 September 2013.