Japanese pachinko hall operator Okura Holdings Ltd has revealed it will cease the operation of a hall in Nagasaki City due to “deteriorating operating and financial performance” since the outbreak of the COVID-19 pandemic.
The closure will see the number of halls operated by Okura fall to 10.
In a filing, Okura said it has seen lower overall customer traffic at its K’s Plaza Ohato hall since January 2020, and would therefore cease operations of the hall from 14 January 2024. The hall had recorded a loss of JPY58.5 million (US$405,000) in the year ended 30 June 2023.
“The management considered that although K’s Plaza Ohato gradually managed to regain customer traffic in the year ended 30 June 2023, as compared with some of the Group’s other pachinko halls, the recovery of customer traffic at K’s Plaza Ohato is still at a slow pace despite the Group’s continuous effort in promoting its pachinko and pachislot games in K’s Plaza Ohato, and accordingly this pachinko hall continue to record losses from its business operations,” management said.
“Taking into account the general adverse operating landscape, the intense competition in the pachinko industry and the increasing competition from other forms of entertainment in Japan, the management considered that it will be more beneficial for the Group to focus its resources on the Group’s other pachinko hall, SENKURA Dejima (formerly known as Big Apple. Dejima) which is located close to K’s Plaza Ohato, as well as other more promising pachinko halls.”
Okura noted that it owns the relevant land and building, and will consider renting the premises upon closure to generate rental income.
It added that closure of the hall would result in an “insignificant” loss on disposal of property, plant and equipment, to be recorded in its financial results for the year ended 30 June 2024.
The group’s 10 remaining halls are located in the Kyushu, Kanto, Kansai and Chugoku regions of Japan.