FIELDS DIGITAL ANNUAL REPORT 2017

Medium-term Management Plan

(Appendix) Pachinko and Pachislot Business Platform

3-year Market Scenario

On July 11, 2017, the National Police Agency announced the “Draft Regulation Partially Amending the Ordinance for Enforcement of the Act on Control and Improvement of Amusement Business, etc. and the Regulations for the Verification of Licenses, Formats and Other Aspects of Pachinko and Pachislot Machines,” including pachinko payout regulations, and this is expected to come into force on February 1, 2018. FIELDS has developed its forecast for the pachinko and pachislot market for the coming 3 years (Table 1) in the light of these regulatory reforms.

(Table 1) Market scale of pachinko and pachislot

* FIELDS’ estimate

FY2016 FY2017 FY2018 FY2019
PS sales market ¥860.0billion ¥782.1billion ¥731.7billion ¥688.1billion–¥795.6billion
Total PS market ¥2.77trillion ¥2.72trillion ¥2.68trillion ¥2.64trillion–¥2.83trillion

The pachinko and pachislot machine sales market refers to the scale of the market for new pachinko and pachislot machines.
The total pachinko and pachislot market indicates total expenses including investment by pachinko halls in the purchase of pachinko and pachislot machines, marketing costs, and PR expenses and more.

(Figure 1) Market scale of pachinko and pachislot
Graph: Market scale of pachinko and pachislot

Pachinko and pachislot
machines sales market

The pachinko and pachislot sales market for fiscal 2016 had an estimated value of approximately ¥860 billion. (Figure 1) We expect that regulatory reform will still be underway during fiscal 2017 and 2018, and consequently, we do not hold an optimistic outlook for sales of new machines. Meanwhile, we hope that the impact from regulation revisions will ease by fiscal 2019, when we will be able to rejuvenate the market by launching highly entertaining pachinko and pachislot machines.

Total pachinko and pachislot
market

The total pachinko and pachislot market is estimated to be worth approximately ¥2.7 trillion. (Figure 1) A minor reduction is forecast, similar to the pachinko and pachislot machine sales market, for fiscal 2016. However, we hope a recovery will also be possible for the total pachinko and pachislot market through the launch of pachinko and pachislot machines that can gain market acceptance.

Focal Points of the 3-year Medium-term Management Plan

We have organized the following 3-focal points for the pachinko and pachislot business platform in our 3-year Medium-term Management Plan.

Figure: Focal Points of the 3-year Medium-term Management Plan

1. Focus on short-term recovery of business results concurrently
with medium-to long-term management strategy

FIELDS will strive to enhance the sales bases that we have nationwide, and provide more attentive service to customer halls. By strengthening relations with each manufacturer, we will endeavor to bolster our product line-up, and we will expand the products we handle through sales collaboration with unaffiliated manufacturers.

2. Building of business structure that will not be upset
by changes in market environment

FIELDS aims to achieve stable provision of products in the market year-round. We plan to release 20 or more titles in each of the 3 years of the Medium-term Management Plan. We will also strive to restructure the business value chain centered on planning and production capacity in order to release titles with product appeal.

3. Providing pachinko and pachislot solutions

FIELDS will leverage our strengths as a distributor and trading company to not only provide pachinko and pachislot machines, but to also promote provision of marketing and data analysis, together with hardware and software other than pachinko and pachislot machines. (Figure 2) Moving forward, we will contribute to revitalization of the market, and work to realize entertainment that fans will truly enjoy.

(Figure 2)
Figure: Providing of pachinko and pachislot solutions
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