The Struggles Of Pachislot, Slot Machine, And Arcade Game Markets
Japanese Arcade
(Last Updated On: May 27, 2017)

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Challenge based and chance based floor games have encountered difficult times over the years. From arcade parlors to slots at casinos, the coin-up market have faced many struggles to stay profitable and relevant. In recent times this has become even more evident as mobile gaming markets and other electronic pastimes eat away at the traditional floor-based cabinets.

Major drops have been recorded in the traditional slot machine games on the casino floors across various regions that were popular for their gambling offerings. Trefis Research[1] indicates that there has been a 20 percent decline in slot machine revenue over the course of twelve years at Las Vegas casinos.

The Trefis report indicates that there has been a decline in the electronic entertainment industry, and larger publishers such as Activision and Electronic Arts have had to resort to monetizing software through the gamification of mobile apps, tertiary add-ons, and microtransactions to compensate for decline. Trefis indicates that casinos in Las Vegas have been looking into experimenting with similar gamification to achieve similar success that publishers like Activision and Electronic Arts have found in monetizing mobile apps and add-on software.

Trefis also points to the continued popularity of traditional slot machines and floor-based gambling activities in Asia, particularly Macau and Singapore. But it isn’t just in Southeast Asia that gambling continues to blossom.

In Japan, Capcom saw increased revenues from the pachinko and pachislot machines up until 2014, when increased regulation from the bureau of Security Electronics and Communications Technology slowed net sales drastically. However, despite these regulations new pachislot machines still managed to see a net sales increase of 77 percent during the fiscal year of their launch, according Capcom’s fiscal report[2].

The market outlook also reveals that following a decline in traditional arcade cabinet revenue due to Entertainment and Amusement Trades Rationalizing Act, the act was recently revised, which allowed companies like Capcom to regain market boosts from arcade cabinets since young people could play arcades longer without being accompanied by a guardian.

From an article on the Financial Times[3] we learn that Japan’s arcade parks have continued to survive, adapting to the times and offering enthusiasts new experiences and evolving challenges. However, even Japan’s arcade floors aren’t immune to the digital age, and the Financial Times reveals that arcade cabinet revenue in recent times have “retreated” despite surviving decades.

Notwithstanding Capcom’s moderate success in the arcade and pachislot market, other companies haven’t been faring as well. Companies like Sega Sammy have seen a steady decline in pachinko and pachislot machine revenue after peaking in 1995. The market size has steadily shrunk, with Sega’s market report[4] revealing that men under their 20s playing pachislot and pachinko machines has shrunk from 11.4 percent over the course of six years down to 1.7 percent. Men in their 20s playing pachislot and pachinko machines, over the same period, saw a decline from 24.5 percent to 6.8 percent.

While companies see a shift in the marketplace regarding pachislots, slot machines and arcade machines, it poses new challenges for them to adapt to the changing times as the traditional machines continue to see shrinking revenue and face a possible future where they could soon become obsolete.


1. https://www.trefis.com/stock/atvi/articles/297895/skill-based-slot-machines-to-provide-a-win-win-situation-for-casinos-gaming-industry/2015-05-26
2. http://www.capcom.co.jp/ir/english/kojin/market.html
3. https://www.ft.com/japanarcades
4. https://www.segasammy.co.jp/english/ir/management/market/
5. Japanese arcade image – http://www.whysojapan.com/video-game-arcades-in-japan/

 


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  • Japan certainly has many challenges in the out of home gaming market but over here in the US, arcades are doing better than they have in years. I should know, I’ve been operating one in UT since ’08; 2016 was the best year I had and 2017 is shaping up to be better. It’s all about those exclusive arcade experiences that aren’t found at home/phone and I don’t mean tickets/prizes.

    • Yeah, there are still things you can do in arcades that you can’t do at home. At least, not with any sense of practicality.

      You remember some of those old Sega cabinets? Namely the ones for After Burner and Hang-On. The former had a cockpit setup that tilted as you turned your fighter, while the latter had a mockup of a motorcycle that you leaned to turn your bike in the game.

      Not to mention the wheel, pedal and shifter setups that racing games often made use of… Midway’s Hydro Thunder used a lever throttle like real boats have.

      I just wish there were more games coming to arcades that I could get excited about, rather than just oldies. They may be golden, but their age shows.

      • Yep, Sega changed everything with those games, making way for simulation style titles instead of glorified console type gaming.

        Most game sites don’t cover new arcade releases but they are out there. The walking dead Arcade was released in January right after the new Cruis’n Blast ; there’s a new space invaders with light guns; Sega is starting to ship the Daytona remake, Daytona championship USA; Namco has the star wars battle pod; etc. Not sure if you saw it in 2009 but hydro thunder was rebooted as H2overdrive (by the same guys that created HT)

        • Yeah, I heard about H2Overdrive. Haven’t gotten to play it, though. Don’t think anyone near me has it.