Okura Holdings Ltd is a pachinko hall operator in Japan which recently announced that two of its halls are closing permanently. The two facilities were impacted greatly by the COVID-19 pandemic, so much so, that business has slowed since the pandemic, resulting in the need to close.

As of today, the Big Apple YOUPARK Motosumiyoshi facility in Kanagawa and the K’s Plaza Mikatsuki hall in Saga will no longer offer services. The company stated in the announcement that both properties have been unable to recovery player traffic when compared to other pachinko facilities operated by Okura.

A Look at the Losses

In a six-month time frame ending on December 31, 2020, K’s Plaza Mikatsuki resulted in just over 40% of the losses for Okura. The facility was down to JPY14.7 million ($135,000). Big Apple YOUPARK Motosumiyoshi saw losses as well, but lower, accounting for a little over 20% in a loss for the company with JPY 8.0 million ($74,000).

In a statement, Okura said that the operating landscape plus competition in the pachinko industry were the main factors in deciding to shut down the two properties and focus on ‘more promising pachinko halls’. It makes more sense to work on enhancing the customer experience where the venues are doing well and working to minimize losses by closing the weaker performers.

The company stated further that the directors believe that streamlining resources and operations will stabilize the financial performance and improve it in the long run. The shutdown is the best decision for Okura and its shareholders.

Okura expects to see a small loss as it disposes of the two halls’ assets. The company will now have 15 pachinko halls in operation in Japan.

Continued State of Emergency

Right now, Japan is dealing with an increase in COVID-19 cases. On Friday, the government announced an extension of its original state of emergency order from a few weeks ago to try and contain the virus spread. The order has been extended for a three-week time frame.

In late April, the emergency order was issued in four urban prefectures of the country. These areas included Tokyo, Hyogo, Osaka, and Kyoto. The extension now includes Fukuoka and Aichi. In these regions, the pachinko halls have been asked to stop offering services to avoid an outbreak.

Last year, the Japanese government asked pachinko parlors to shut down as part of an order, but it was only a request. Many did not follow through with shutting down. This time around, the government is ordering facilities to close and those that do not may face consequences including fines.