Universal Entertainment Corp. (UEC), a Tokyo-based pachinko and casino operator, reported a significant net loss of $102.8 million (JPY15.6 billion/£82.5 million/€99 million) for the fiscal year 2024, amidst net sales of $834 million, marking a 29.4% decline. The company's operating profit also fell drastically by 90.1%, landing at $19.8 million.
The downturn is attributed to a decline in VIP gaming activities at Okada Manila in the Philippines, alongside a steep drop in pachinko and pachislot machine sales in Japan.
For Okada Manila, net sales reached $541.4 million, reflecting a 15.4% decrease from 2023, with VIP gaming trailing off. Even though visitor numbers rose at the integrated resort, gaming revenue dropped by 21.8%, totaling $599.4 million.
“The slowdown of the junket business negatively affected the overall market conditions for the casino business in the Philippines,” UEC stated in its financial report released on February 13.
The report also highlighted that while mass market sales and gaming machine categories have recovered since the pre-pandemic peak in 2019, fiscal year 2024 experienced a decline compared to the previous year's recovery.
Other challenges include rising personnel expenses at Okada Manila and a foreign exchange gain as the Japanese yen depreciated against the US dollar. Nonetheless, UEC reported that the hotel and food and beverage segments are thriving, with increasing guest numbers and revenue growth.
In Japan, UEC’s gaming-machine segment saw sales plummet by 46.3%. UEC had planned to focus on several major releases in the latter half of the year, but some products stalled during testing, pushing their launch to 2025. Consequently, only 49,000 units were sold in the second half of 2024, leading to a total of 92,000 pachislot and pachinko units sold.
Despite the setbacks, UEC remains optimistic. “The game elements of smart pachinko machines are to become richer. The emergence of hit titles will lead to the revitalisation of the market and UEC’s market share,” the company expressed. According to the Jakota Index, UEC expects to return to profitability in 2025, projecting net revenue of $990.3 million.
On a positive note, the Philippines achieved record-high gross gaming revenue last year, largely driven by online games, totaling $6 billion— surpassing the government target of $5.75 billion and significantly exceeding 2023's $4.9 billion.
Additionally, Okada Manila earned the Forbes Travel Guide’s 5-star designation for the fifth consecutive year, recognized as “the sparkling jewel in Manila’s crown.” The resort features captivating attractions such as the Fountain, the world’s largest multicoloured dancing water feature, and Cove Manila, which is Southeast Asia’s largest entertainment space incorporating an 8,395-square-foot butterfly-shaped swimming pool under a colossal glass dome.
UEC aims to leverage these attractions, along with enhanced marketing and promotional efforts, to draw a diverse audience of local residents and tourists from Japan, South Korea, and other Southeast Asian nations. The company also plans to launch a new online gaming platform for Philippine locals and promote it through a membership program.
