Pachislot and Pachinko Machines Business
Pachislot and Pachinko Machines

Medium-term targets
Creation of hits
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Top Message

Changes in the external environment are
steadily opening up new opportunities

Revising the product lineup

 ptimizing the product lineup (centered on series machines)ORigorous screening and selection of new IPs
Revivals of past IPs
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Increasing hit potential

 reating machines from a user-centric perspectiveCDeeper user analysis by attribute3

Enhancing media functions

Expanding communication with users through digital media

Improving business efficiency
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Improvement of development efficiency

 se common visual images for pachislot and pachinko machines
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Rationalize visual production
Expand derivative titles, such as spec changes
2

Cost reduction

 romote introduction of standardized parts between pachislot
Pand pachinko machines
Hold down excess inventory by optimizing first-lot production(medium to long-term target: zero excess inventory)
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Promote online commerce

Expand online sales support to pachinko machines

Ayumu Hoshino
Senior Executive Vice President andCOO, Representative Director
Sammy Corporation

content, we are also working to streamline the costs of hard-audience. So, for example, for men in their 40s and 50s, weware, such as reusing machine gimmicks and other internal

mainly use TV commercials, while for people in their 20s it isequipment. This also helps shorten the development time-Progress of the Medium-Term Plan

mainly social media. With Smart Pachislot Hokuto No Ken, oneframe, enabling us to test games on actual machines at an

The medium-term plan calls for creating hits and improving business efficiency in the Pachislot and Pachinko
Machines Business, aiming to generate steady earnings even amid changes in the business environment.

of our current big hits, the aim was to appeal to dormant users

earlier stage than in the past. This allows more time for thein their 40s and 50s. As well as broadcasting TV commercials

process of refining games, which feeds into higher quality.

featuring popular entertainers who are big fans of the original

We also rigorously controlled surplus inventory, a factor

Parlor Sammy is a mock pachinko hall we set up on com-

Pachislot Hokuto No Ken, we carried out large-scale promo-that hampers business efficiency. However, currently an even

The current medium-term plan lays out three measures aimed atpany premises. It is playing a major role in the development oftions across a range of channels, including displaying posters

more pressing concern is over issues with the global procure-creating hits. First is a review of the product lineup. We focusedsuch interesting machines, allowing employees to freely enjoy

at Japanese pubs. These efforts paid off, contributing to highment of semiconductors and other parts, where supply is not

our development on the products that could be expected tomachines under development and give their frank, direct evalu-utilization immediately after the machine’s launch.

keeping up with demand. Procurement conditions are improv-

become solid drivers of earnings and reorganized our sales

ations. Their evaluations and comments are collected and fedlineup. Specifically, we launched the Sammy Classic series,

back to the development department, where they are used toImproving Business Efficiency which consists of revivals of IPs that were popular in the era ofrefine the machines. In the past, we left it to the development

To improve business efficiency, our efforts focused on optimizing

No. 4 model machines. Including titles such as Pachislot DISC

department to decide when a machine was ready for produc-development operations, an area that involves substantial

ment risks down the road, we will work on fundamental, long-UP, Pachislot GAMERA, and Pachislot Aladdin A Classic, thistion and launch, but with the broader perspective provided byexpenses, and in particular reviewing the number of images

term solutions. While continually updating the supply chain,series has recorded robust sales. On the other hand, for No. 6.5

Parlor Sammy, we are steadily enhancing the quality of ourused for visual effects. To be sure, an array of visual effects

including diversifying our suppliers, we will pursue productmodel pachislot machines that offer new gameplay, Pachislotmachines, which improves our chances of creating a hit.

using numerous images makes pachislot and pachinko

development that enables stable production, including stan-Kabaneri of the Iron Fortress became a major hit, far beyond

Another key factor in creating a hit is strong communication

machines interesting, but in our discussions we questioned thedardizing parts and promoting the reuse of parts.

our expectations. This well-aligned approach of capitalizing onamong the developers. To encourage this, we are working tonecessity of creating multiple new images for rare visual

In fact, going a bit further, if we standardize all of the hard-past IP while looking ahead and taking on the challenge of newshare information more extensively within the development

effects that pop up only once in tens of thousands of times.

ware parts used in our machines, in future it could be possible

gameplay based on new IP is steadily producing results.

department, giving visibility to the kinds of projects and issues

From this vantage point, we took a careful look at what kind ofto create a downloadable pachislot or pachinko machine inthat fellow developers are working on. These efforts are helping

visual effects really influence gameplay. Then, we were able towhich only the software is switched out via a network connec-

The main principle at work here is to create many machines

us grasp industry trends and fostering a culture that is condu-

curb costs substantially by paring down the number of images

tion. This would enable us to radically mitigate procurementthat offer a truly entertaining experience to the end-users whocive to new ideas and approaches.

created. We are also working to standardize images in cases

risks. This is technically possible already, and this approach

where the same IP is used in both pachislot and pachinko titles.

would also enhance security. Of course, we would need toCreating Hits The second measure is increasing the probability of a hit.

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Integrated Report 2023

SEGA SAMMY HOLDINGS

essential. We use media strategically according to the target

ing somewhat, but our priority for the time being is to ensure astable supply in preparation for growth in demand.
Recognizing the likelihood of a resurgence in such procure-actually play the games. Developing machines with gameplay

The final measure is strengthening media functions. Even ifthat end-users enjoy leads to higher utilization rates. Creating

we create an interesting machine, that will not easily feed intoFor series machines, we have also been repurposing images

address any regulatory issues, and will discuss the idea thor-

popular machines with high utilization rates will in turn benefit

sales growth unless it becomes widely known. This is whereby tweaking visual effects from past machines.

oughly with relevant authorities as we make steady progress

pachinko halls, our direct customers.

coming up with promotions that leverage media functions is so

As well as these kinds of optimizations in terms of software

towards implementation.
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PICK UPKey Person in Creating a Hit
Pachislot and Pachinko Machines

Outlook
as a whole can draw in users by creating machines that offer

pachislot and pachinko players will continue to decrease as

new gameplay while complying with the rules and regulations,

The Hit Pachislot Kabaneri of the Iron Fortress

Japan’s population declines, but I am not so pessimistic. Just as

this will recharge the entire market in the near future.

I think the so-called “Tsuranuki specifications” of Pachislot Kabaneri of the Iron Fortress,
which took full advantage of revised regulations for No. 6.5 model machines—including
revisions to the upper limit on medal pay-out—were a major factor in making thismachine a hit. We were moving ahead with different specifications when we first startedout but switched course in the final stages of development, deciding to change thespecifications to capitalize on the features of No. 6.5 models.
It was really tough to incorporate the changes in such a shortperiod of time to avoid delaying the launch. But thanks to theagility of the whole team, we were able to launch the machine
without a hitch.
We got a very warm reception from users for the kind ofgameplay that can only be experienced with Pachislot
Kabaneri of the Iron Fortress, such as its unparalleled reelplay and exhilarating bonus wins. The machine design strikes
a delicate balance between being mild and easy to play whilestill making users look forward to medal pay-out. My sense isthat the overall gameplay, combined with high-quality visualeffects using movie and sound elements, has earned highPachislot Kabaneri ofmarks from users and is leading them to play the machine forthe Iron Fortresslong periods of time.
©Kabaneri Committee ©Sammy

we saw a major expansion of the market in the No. 4 model era,

Smart pachislot and pachinko machines offer an array ofthe pachislot and pachinko machines market still has plenty ofadvantages and carry huge hidden potential. Not only does

potential for growth once it gains momentum.

eliminating the physical pay-out of medals and pachinko balls

In 2023, the launch of Smart Pachislot Hokuto No Ken caused

lead to lower running costs and energy savings at pachinko

dormant users in their 40s and 50s who had played the originalhalls, but since game data can be collected and managed, it

Pachislot Hokuto No Ken to return to pachinko halls and ener-

also helps in monitoring the excessive gaming behaviors thatgized the market. Rather than letting this be simply a one-off

can lead to addiction. Meanwhile, adopting cashless payment

boom, it is important to keep those users in the market. Withalso makes it possible to monitor individual spending patterns

this in mind, we will continue pursuing aggressive productand issue alerts on payments above a certain amount. We

development centered on the Classic Series targeting therecognize addiction as a serious issue that we and all busi-

dormant user base, while working at the industry association

nesses involved in the pachislot and pachinko machines indus-

level to give impetus to revitalization of the industry as a whole.

try have to tackle. We believe that fulfilling our responsibilities toCurrently, there is a trend for both pachislot and pachinko tosociety and promoting a healthy industry image is vital forundergo regulatory review. So, my hope is that, if the industry

ensuring the sustainable growth of this market.

Potential Shape of the Future Pachislot and Pachinko

Short to medium term
Improvement of gameplay
Reduction inthe number of parts
Enhancement ofhall environments
Fraud prevention

Long-term potential

 ower operational burden
Lfor pachinko halls

More diverse pachinko hall layouts

Measures against infection

Cashless operation

Measures against addiction
 ower barriers toL
new store opening

Machines that can download and replace software
Digitization of operations
Communication between pachislot and pachinko machines

Continuing to Take on Challenges

Hidekazu Kouchi
Vice President, Executive Officer
Managing Director of PS Research &Development Division
Sammy Corporation

Integrated Report 2023

SEGA SAMMY HOLDINGS

Some people predict that the number of pachinko halls andExpectations for all sorts of possibilities unconstrained by existing concepts

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Developing innovative pachislot and pachinko machinesthat move users

The Hit Smart Pachislot Hokuto No Ken
Smart Pachislot Hokuto No Ken is based on the concept of a full-fledged remake of the original
Pachislot Hokuto No Ken, which recorded roughly 620,000 unit sales. We believed the key to success
was to find the right way to balance the features the machine should inherit from past models while
having the courage not to change and to evolve by adding elements we thought would be desirable.
Our greatest focus was on the most appealing aspect of the original machine—a battle bonus that theuser doesn’t know how long will last. At the start of development, we were considering reproducing theoriginal in a different form, but were able to reflect revised regulations for smart pachislot machines andcome up with the ideal combination of inheritance and evolution. We also started running in-house
trials from an early stage, and the whole team worked together through trial and error to decide which
new features we wanted to incorporate or not until we came up with a product we were satisfied with.
The result was a huge hit, which original fans liked for its nostalgic elements and high degree offaithfulness to the original, while new fans who never knew the original liked the machine’s fun andeasy-to-understand nature.
The Hokuto no Ken series is an IP that has been well-loved by fans for a long time. We will continue to aimfor further growth in this series by fusing elements inherited from the original with evolved new elements.

Smart Pachislot Hokuto
No Ken©Buronson & Tetsuo Hara/COAMIX 1983,©COAMIX 2007 Approved No.
YRA-114©SammyThe various measures we have carried out based on the medi-

always pioneering.” Continuing to take on challenges naturally

um-term plan have borne fruit in the Pachislot and Pachinko

sometimes involves failing, but the crucial thing is to draw onMachines Business, giving us a framework for generating solid

such experiences in embracing the next challenge. As I see it, aearnings. Going forward, by developing compelling machines

major role for myself and the rest of the management team is toContinuing to Take on Challenges

that serve, inspire, and awaken users and by creating hit titles,

cultivate the seeds of such challenges and support our human

we will drive substantial top line growth. To this end, we willresources. I invite our stakeholders to follow our progress as

foster an environment of taking on even greater challenges in

we continue to drive the upward trend in the Pachislot andline with Sammy’s corporate value of being “Always proactive,Pachinko Machines Business.

The success of these machines, both of which under the new regulations fall into the “mild” category in terms of the moderate pay-in
typically needed to hit a jackpot, gives me the sense that we have an environment in which it is easier to offer a wide variety of specifications and gameplay without relying solely on the gambling aspects of the machines.
Also, as various types of entertainment emerge, I feel strongly that pachislot and pachinko need more variety as well. We will continue to take on the challenge of being a company that generates excitement among users by making them wonder what kind ofmachine we will put out next without relying too heavily on any single aspect, like specifications, gameplay, or the IP.
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