Japan’s Universal Entertainment Corp recorded a significant downturn in the first half of 2025, posting a net loss of JPY9.87 billion ($69 million). The setback was primarily linked to underwhelming performance from its flagship Philippine resort, Okada Manila, which faced declining gaming revenues and weaker hotel and food & beverage results.

According to the company’s latest filings, overall net sales for the six-month period ending June 30 fell 1.2% year-on-year to JPY62.2 billion ($421 million). The drop was largely driven by a steep decline in Okada Manila’s figures, despite notable gains in the firm’s amusement equipment division.

Okada Manila’s Revenue Declines Weigh on Results

Revenue at Okada Manila dropped 16.9% compared with the same period last year, landing at JPY34.6 billion ($234 million). This decline pushed the integrated resort into an operating loss of JPY1.32 billion ($8.9 million), reversing the JPY3.28 billion ($22.2 million) operating profit it had achieved a year earlier. Adjusted segment EBITDA also tumbled by 37.7% to JPY7.30 billion ($49.4 million).

Universal attributed the downturn to multiple factors affecting the wider Manila casino sector. A nationwide ban on Philippine Offshore Gaming Operators (POGOs) earlier in 2025 has indirectly hurt the VIP segment of land-based casinos. Additionally, the Philippines has seen a drop in visitors from key markets such as South Korea and China.

“The overall Entertainment City, where Okada Manila is located, experienced sluggish inbound customer traffic. Additionally, the decline in gaming revenue from the VIP market could not be offset by revenue from the mass market, and the hotel and F&B businesses also underperformed, which was directly reflected in the financial results,” the company stated in its Semi-Annual Report (53rd Q2) (pdf).

Pachinko Business Provides Partial Offset

While Okada Manila struggled, Universal’s Amusement Equipment Business — which designs and sells pachinko and pachislot machines — delivered strong growth. Segment net sales jumped 30.8% year-on-year to JPY27.2 billion ($184 million), with operating profit rising 37.6% to JPY5.18 billion ($35.1 million).

The company sold a total of 55,589 units in the first half, with 36,966 units shipped in the second quarter alone. Market demand was fueled by the spread of smart pachislot machines, which have maintained high utilization rates in pachinko parlors.

Universal explained, “The market environment for pachislot machines is favorable because of the steadily progressing diffusion of smart pachislot machines as well as the high utilization rate of these machines in the pachinko parlors that meets the expectation from the parlor operators.”

In contrast, the pachinko machine market — while seeing popular models equipped with the Lucky Trigger (LT) function — has shown slower improvement in machine utilization.

Recovery Plans for Okada Manila

Group-wide, Universal posted an operating profit of JPY847 million ($5.7 million) in 1H25, a 74% decline from the prior year. The company has outlined steps to reverse Okada Manila’s fortunes, focusing on marketing improvements and facility enhancements.

Universal said it is “recruiting and training people to strengthen marketing capabilities in the gaming business” and aiming to attract more domestic guests from outside Luzon, as well as tourists from Japan, South Korea, and other Southeast Asian countries.

The second quarter also saw the reopening of the renovated Coral Lounge, intended to encourage guests to spend more time in the casino area. In a leadership change, Tiger Resort, Leisure and Entertainment Inc. — the operator of Okada Manila — announced the upcoming departure of President and COO Byron Yip. He will be succeeded by Universal’s current CFO, Nobuki Sato.