Dynam’s slot machine ambitions appear limited

Dynam Japan Holdings, the nation’s largest pachinko operator by number of halls, has developed its first slot machine for the Macau market in cooperation with Singapore-based Weike Gaming Technology, but its near-term ambitions appear to be limited.

“We understand that it is important to develop for the mass market,” Tatsuya Ando of Dynam’s Next Generation Gaming Machine Development Group told Asia Gaming Brief at G2E Asia in Macau last week. But he added, “At this point we can’t explain about our next step.”

Dynam’s first slot machine was expected to be showcased at Weike’s booth last week, but was in fact locked away from public view in a back room.

In a research note issued on Monday, Union Gaming cited Dynam’s impending rollout of its first slot machine and observed, “We are not baking in any incremental revenue from this business yet as it’s unproven and currently limited to Macau.”

In the Japan market, Dynam works with other developers to produce its own privately-branded line of pachinko and pachislot machines. According to Ando, there are now about 148,000 Dynam-branded pachinko machines (a market share of about 5.5 percent) and about 62,000 Dynam-branded pachislot machines (a market share of about 3.9 percent).

In its FY2018 financial results, Dynam Japan Holdings recorded JPY769 billion (about $7 billion) in gross pay-ins (down 0.8 percent), JPY146 billion (about $1.3 billion) in revenue (down 3.8 percent), and over JPY19 billion (about $173 million) in profits before income tax (up 15.3 percent)

While Dynam continues to be a leader in finding innovative ways to reduce pachinko parlor operating costs, Union Gaming noted that the industry continues to face headwinds, including an expected consumption tax hike in October, mandated retrofitting of smoking and non-smoking areas, and tighter regulation.

The number of Dynam pachinko halls has been holding steady at 450, among which 274 are the low-cost halls which the firm specializes in.