Playing for Points: The Connection Between Pachinko and Loyalty Programs
23 October 2023
Federico Couret

Gambling in Japan is illegal, but pachinko is an exception. Pachinko is regarded as entertainment, and it is positioned as an amusement activity bringing joy to the community.

Although declining, due to changing entertainment preferences, stigmas and increasing gambling regulations, pachinko continues to be a distinct and popular pastime across the country.

It combines elements of pinball and slot machines. Players aim to skillfully launch small metal balls into specific pockets within the machine, with the goal of hitting jackpots. While skill plays a crucial role, luck also adds an intriguing dimension to the game.

The art lies in mastering the right balance between force and precision when launching a ball. The payoff? When a well-aimed ball hits the jackpot, a cascade of additional balls is unleashed. This affords more opportunities for play and victory.

Unlike slot machine gamblers or winners at casinos, pachinko players cannot directly exchange their wins (balls) for money. Instead, they receive tokens or tickets to redeem rewards such. Electronics, jewellery, gold, novelties, gadgets, food, snacks, cigarettes, cosmetics or vouchers. 

A video showing how pachinko balls are played

Nonetheless, there has always existed an intriguing workaround allowing players to cash rewards. Also enabling pachinko parlours (as they are commonly known) to thrive as a form of entertainment within legal constraints. Players can take their Pachinko rewards and sell them at a nearby pawn shop-like establishment. Often located in the same building or just next door to the parlour.

As well as using different priced balls to earn higher values (silver or gold), players can win higher value rewards. Because there is some skill on the game depending on the machine and the game difficulty or theme. So hundreds of blogs and social media posts are dedicated to sharing strategies, tips, and success stories related to popular games.

A busy pachinko hall

Japan has an addiction to loyalty points. Amid the bustling advertising and at every point of sale, the Japanese are unfailingly presented with opportunities to earn points. Nearly everyone in the country accumulates points on a daily basis. Whether through point cards, payment systems, or even hopping on the train.

Pachinko is certainly no exception. As the industry tries to distance itself from a stigmatised business model, operations increasingly resemble loyalty programs.

Staff promoting and encouraging customers to earn loyaltypoints

Nowadays, players can buy “medals”. Similar to casino chips, they are small coin-like tokens. This provide a symbolic and legal buffer to the transaction between money and chance. In general, medals cannot be traded for prizes. And can never be exchanged for money, but they can often be “banked” for later play.

In addition to regular game wins, like many other businesses, pachinko parlours capitalise on the excitement of winning points. Loyalty programs play a significant role not only incentivising customers, but also creating communities and engaging with players. Most importantly providing member benefits as part of their business strategy.

Dynam Japan Holdings Co. — ダイナム provides a good example of a loyalty strategy in the sector. The company is a long standing and prominent player in Japan’s pachinko industry. Dynam operates the largest number of halls in the country. 

Their vision is to transform pachinko culture into an accessible everyday entertainment for everyone. Much like supermarkets, convenience stores, restaurants and other businesses, Dynam sees itself as a vital component of people’s lives. Focused on enhancing the local community’s infrastructure.

Anniversary thank you message

As such, they sponsor local sports teams and other activities. They offer their parking lots adjacent to pachinko halls to community groups in need of event space. And they have generously made donations during environmental crises.

To play, Dynam visitors can buy a bucket of balls in the traditional way. They come in 400 and 750 ball sizes. Alternatively they can insert cash in the machine they want to play.. Or ask for a free ダイナムカード (Dynam Card) and enjoy a wide range of benefits.

As promoted, with a Dynam Card members can play again without spending money! Save and have lots of fun! Redeem and take home fantastic prizes! With it, members can store the balls and medals they’ve won for future play. Alternatively, they can exchange them for enticing prizes or continue using them to play again later.

Display of Dynam Card with details on benefits, usage, and prize categories

When using Dynam Card, members can also choose different value rates on the balls and medals they’ve won. This is a great feature. It gives members the ability to increase the value of lower-rate wins by replaying them for potentially greater wins. Giving them access to better prizes. 

Furthermore, when members swipe their card, they accumulate visit points. These points serve as an excellent incentive for members to win additional prizes. Dynam can enhance its promotional efforts and drive traffic to their floor on specific days by offering bonus points.

Although visit points are exclusive to the visit points catalogue, the selection is both attractive and easily accessible. Essentially, it represents a lower-value version of what can be redeemed with balls. The process of earning visit points provides members with an opportunity to experience the quality of items on offer. Furthermore, enticing them to engage more for even greater prizes.

Example of prize catalogue

Dynam actively shares updates, machine information and promotes games and new releases on popular platforms like Twitter, Facebook, and YouTube. These channels not only provide valuable information but they have also created a community of enthusiasts. Here they exchange tips and tricks, insights and experiences, thereby, creating a lively online environment that heightens the overall excitement.

While anyone can follow Dynam on social media, adding Dynam on LINE offers members a direct stream of information. Through this app, akin to WhatsApp, members can access unique detailed information on games and machines. Why is this important? Because it helps members strategically choose the machine they want to play.

For example, some machines offer the highest probability of a win, but have the lowest-value jackpot. Conversely other machines can make you a high-roller. To make the games more interesting, some machines allow changing modes and play with a different set of rules. There are hidden modes that can change the chances of winning big prizes. Some machines even have mini jackpots called ‘koatari’ and lead to a secret mode called ‘senpuku’, bigger hidden wins. 

It might sound confusing, but in the end, it’s a mix of knowing what you’re doing and getting lucky. Those who love statistics, bring in maths into the mix. Many members also keep an eye out for ‘shindai,’ which means a new machine. These machines have different chances of winning, so they’re really popular and people line up to play them.

This example is not unique to Dynam’s pachinkos, every company publishes  information about machines. However, through LINE, members can also seamlessly access Dynam’s app without having to download it. Here they can read further about key game specifications, updates and details regarding new machines. For instance, a game design engineer may share insights on how he designed a particular challenge. They may also reveal the location of the machine with the enhanced game and other technical specs.

For those who don’t need to go deep into details, Dynam publishes weekly rankings. These indicate the most popular machines and the reasons behind their popularity. Rankings are based on member ratings, doubling as valuable feedback for Dynam to understand member preferences. 

The app also offers members the ability to personalise content. By selecting their preferred Dynam location, members can easily access their favourite pachinko newsletter and website content. Also halls’ layouts, machine location, information and status. Members can also access their profile and update their preferences. Plus, check their earned points and saved medals, their playing history and ‘visit points’ as well as submitting enquiries.

As in any hospitality business in Japan, Dynam customer service is remarkable. Staff is always ready to assist, maintain halls and machines impeccably clean, and support members during play without being intrusive. 

Members can access Dynam app via LINE

In order to redeem points, members must visit a Dynam hall. They can view prize catalogues online in advance though. If they prefer, printed versions are also available at the counter. Here staff distributes prizes and congratulates members, offering guidance for their next visit.

The prizes on offer cover a wide range, from sweets to everyday essentials. There are other interesting member benefits promoted. For example if a prize is too heavy or members have many items, staff can carry it to their vehicle. Dynam also offers complimentary parking space. or pick up and drop off services. Plus hosts seasonal events and giveaways for members. The idea is to make members feel they’re looked after.

In conclusion, there is a commendable dedication to developing strategies for member acquisition, growth, and retention in the industry. Pachinko companies are setting a noteworthy example where controversy often looms. Their adept use of loyalty mechanics further underscores the potential for such strategies to drive deeper engagement and a sense of belonging and community. This demonstrates the value of customer-centric initiatives in enhancing the overall experience and loyalty within unconventional domains.

<a href="" target="_self">Federico Couret</a>

Federico Couret

Federico is a Senior Strategy Consultant at Loyalty & Reward Co, the leading loyalty consulting firm. Loyalty & Reward Co design, implement, and operate the world’s best loyalty programs for the world’s best brands. Federico has previously worked in global advertising, CRM and B2B incentive marketing roles on brands such as Microsoft, Toyota, Lexus, Wella, 3M, Mission Foods, Myer and Telstra. Federico applies his skills across all aspects of the business, including loyalty program design, strategy development, customer experience, lifecycle management and data analysis.

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