Pachinko

"Pachinko's going to be on the cutting edge of multimedia. It's going to take a seat among Japan's key industries, and we're going to build a whole new society around it," Koji Tonai tells me, point blank. Punctuated by the clipped rhythmic accent of the hearty city of Nagoya, Tonai's gravelly voice crescendos: "A new urban village with a pachinko hall at its centre. The whole community will look to the pachinko hall as a place of leisure and self-realisation. There'd be room for housewives' groups to meet and pursue sundry interests and hobbies, say, or an old geezer will drop in knowing it's where the grannies hang out."

He booms on: "Online links between the hall and the home, information flowing back and forth. You'll be able to shop or get medical advice without ever leaving your living room."

I am not sure whether to be amazed or bewildered. Pachinko - that seedy form of gambling - at "the forefront of multimedia" ? A "whole new society" built around the Japanese pinball parlour, its banks of flashing, fluorescent booths and blaring Nintendo-like tunes commandeering every business-district corner ? A "key industry" built from a garish game that outdoes Las Vegas in crassness ?

Tonai is hardly the first to try to wrest grand social and cultural meaning from the pachinko parlour's neon glare. I mean, we're talking about an industry that draws more than 30 million adults to 18,000 parlours. They come on their lunch breaks and after work - picking a lucky seat along the rows of upright pachinko machines, pouring in gazillions of steel marbles, staking their yen on the chance to win some chocolates, a few CDs or a carton of smokes.

But, faithful pachinko fan though I am, I still have to wonder: is this just a big-rice-cake image, the fantasy of a wishful thinker ? Is it merely a salesman's hype ? Or is pachinko really in for a sea change ? What exactly is going on in pinball these days - besides that so many million people are playing the game ?

I had not been entirely unprepared for what I heard in my conversation with Tonai - a sturdy, energetic, driving businessman who, as the managing director of pachinko giant Daikoku Denki Co. Ltd., is in a position to know about the industry. Pachinko pushers have been waging - and winning - a war against the game's poor public image. Where past news reports featured mostly old-school pachinko parlours - smoke-filled rooms overflowing with gambling men - and where reporters once reminded readers of the seamier side of the industry (social ills stemming from semi-legal gambling, burglaries plaguing cash-redemption booths, unctuous owners being hauled in for tax evasion), the past year has seen a shift in emphasis.

Now news stories regularly tell of bold initiatives like the fashion mall in Tokyo's trendy, youth-oriented Shibuya district that converted six of its eight floors into pachinko parlours and reopened under the name Maruhan Pachinko Tower. Not only did a building transform itself into a massive pachinko complex, but it did so in style. The tower provides plush seating, prize counters reminiscent of the cosmetics section at an upscale department store, chic attendants and a special section with "love seats" for couples on dates. Even young women who might hesitate to step through the door at other parlours find the atmosphere at the tower pleasant and inviting. Reporters gush about the new complexes, calling them symbols of the changing face and growing power of pachinko.

Speaking of power, government figures show an industry racking up gargantuan receipts - ¥30.4 tril- lion (£190 billion) in 1994. Video arcades, home videogame hardware and software, karaoke - none compare. None boast sales that reach a trillion yen. Pachinko leaves even the ¥14 trillion (£88 billion) Japanese auto industry in the dust.

Tonai's company, Daikoku Denki, is a principal among pachinko suppliers: based in Nagoya, it makes all the accoutrements needed to start a first-rate parlour - ball counters, cash-card machines, interactive kiosks that can give players data on every machine in a joint. Even before Tonai told me that shipments of cigarettes and candy bars to pachinko parlours now far outpace shipments to ordinary retailers, or that LCD manufacturers could thank the pachinko parts market for a dramatic rise in earnings, I could see that pachinko was exerting enormous influence on other industries.

I had expected to be amazed by facts and sales figures, but I was not prepared for the scope of Tonai's vision. The pachinko industry has succeeded in building a national information infrastructure - a second economy where goods are bought and sold in huge quantities and with e-cash. So the next push is to sanitise pachinko's tawdry image once and for all: slick brochures feature cheery Hello Kitty-ish characters, as well as eminently trustworthy accounting machines and smartcards done up like Hallmark greetings. Businessmen like Tonai dream of this burgeoning industry becoming a forum for culture and commerce - in Japan, and beyond.

Silverball fever

The word pachinko derives from pachi-pachi, which describes the crackling of a fire or the sound of small, hard objects clicking together. The game pachinko has changed little since the first commercial parlours opened for business in Nagoya, midway between Tokyo and Osaka, not long after World War II. Pachinko's bright boards give it flash, but little steel balls are its core: they fall vertically through the upright machine, in mesmerising patterns, bouncing off nails and eventually dropping into one of many winning holes - or being swallowed back by the machine.

Chance plays the biggest role in how the balls bounce, but concentration, nerves and skilful strategy also count. Successful players know the sweet spot on the little wheel that launches the balls and know the different machines and their complex layouts: their balls land in cups that release a few more balls - or in "tulips", which open for a short time and disgorge ten to 15 silver balls.

Pachinko was once the province of idle businessmen and wizened retirees - and a few pros - looking vaguely like small-time criminals and collecting balls by the bin. But chic modern halls like Maruhan Pachinko Tower cater to young working women, grad students, families and salarymen catching a quick game between clients.

Players typically trade ¥1,000 (around £6) to ¥10,000 for a card, which buys a flood of shiny silver balls from a stand-up machine. After a few good games, bins of accumulated balls are swapped back for an electronically labelled card that is used as currency at a booth hawking cigarettes, soap, pulp magazines and even CDs and software.

Exchanging winnings for cash is technically illegal - pachinko is not a legally accepted form of gambling in Japan. But there's a work-around: players can get cash for winnings by asking for certain "special" items at the prize counter. These they take to some nearby hole-in-the-wall - down an alley, around a corner, over a neighbouring noodle shop - whose proprietor exchanges the prizes for cash and then turns around and sells them back to the pachinko parlour. These often shrink-wrapped special prizes can be recycled over and over; a pack of cigarette-lighter flints will account for so many yen, while an ugly tiepin that no one in the world would wear may be worth a lot more.

Smartcards aren't the only recent revolution in pachinko. The machines themselves have been constantly evolving. Early "boards" required that each ball be fed into the machine and fired individually with the flick of a lever; then a tray was added for automatic loading; then an automatic launcher sent balls shooting one after the other with just the turn of a knob. These mechanically controlled machines cycled through countless face designs, payoff ratios and other tweaks before giving way to a whole new generation of computer-controlled boards.

This marriage of pachinko and computer technology has turned what was once a simple, self-explanatory game into something far more esoteric. Today, none but the most avid players can claim to understand the finer points of all the new machines, behind whose blinking game boards is a digitised nerve system of microcomputers regulating machine operations (with a series of switches and small devices controlling the flow of prize balls). Larger parlours feature a mission- control room with rows and rows of gleaming terminals.

Digital technology has altered the pulse of pachinko, replacing the steady pace of the old boards with the orgasmic climax of a Vegas-style slot machine. First came the fiiba, or "fever", machines in 1980: when a ball dropped into a particular pocket, slot-machine-like reels in the middle of the board started spinning - if they stopped at 7-7-7, the jackpot pocket opened wide to swallow any descending balls, and the machine rewarded the player by pouring forth a flood of glistening orbs. Fever time! Wild delirium !

Players no longer had to extract their winnings a few balls at a time, amassing them slowly but surely into a substantial pot. Fiiba promised the quick jackpot, the single big pay-out. It also promised, of course, that some players would pour endless sums of money into the machines with-out any payback at all.

The huge sensation created by this combination of high risk and high stakes was followed by - you guessed it - the inevitable governmental crackdown. Throughout its history, the pachinko industry has engaged in a never-ending tug-of-war with the powers that be - in this case, Japan's National Police Agency. As hardware manufacturers continued to test limits, the commission steadfastly brought its foot down on innovations that smacked of gambling. The battle intensified in the post-fiiba era as one loophole after another was exploited and then abruptly closed. When the famous renchan ("repeater") offered the chance to hit a second jackpot and, by stringing together a series of three or four such hits, to accumulate stacks of bins brimming with shiny balls, regulators clamped down. Then manufacturers altered conditions, switching boards to a "pachinko heaven" mode with improved odds.

And so it went. Round after round of skirmishes between innovation and regulation. Pachinko machines came and went as quickly as cherry blossoms flower and fade. Digital data in pachinko grew more and more vital, yet the endless scuffle between enforcers and operators kept the info hidden - despite increasingly complete information loops, players remained in the dark. When did this machine last pay out ? How much ? What are the chances of hitting the jackpot when the computer spins the reels ? How many spins does ¥1,000 (£6) buy ? What are the chances of entering "pachinko heaven" after a jackpot ?

Secrecy always breeds suspicion, and in the case of pachinko, secrecy fed the sleaze stereotype. Until now.

Data Robo to the rescue

"There's huge latent mistrust of the industry among pachinko fans," explains Koji Tonai. "They wonder just how accurate the ball counts are. They suspect they're getting credit only for round numbers at the prize counter. Most players probably have this concern. They also wonder whether pay-outs aren't being manipulated by computers behind the scenes. I'd guess 99% of the fans think they are. If we want pachinko to gain acceptance in society, we have to dispel such suspicions."

For the past several years, Daikoku Denki has made a mission out of wiping away the distrust that plagues pachinko. The company has grown rapidly by supplying pachinko halls not only with a variety of peripherals, such as ball counters, but with complete computer systems for managing overall operations. These systems were a welcome bonus for pachinko hall owners, limited to an 11mm steel ball as the unit of exchange and bombarded by astronomical quantities of this unit streaming in and out every day. Because proprietors badly needed to track the silverball flow, they eagerly embraced computerisation.

The superior data breakdowns Daikoku provided quickly gave the company market share. But the behind-the-scenes supplier of management systems didn't stop with marketing. It has seized the initiative to ease fans' doubts and upgrade the industry's less-than-sterling image.

"Traditionally," Tonai explains, "operators had to rely on the skills and instincts of 'nail doctors' " - men who come in at night to reposition the nails in the machines, making them more or less likely to deflect balls away from the target pockets - "to manage their ball flow, and this left them unable to exercise any real quality control. We thought maybe by putting everything under digital management we could sweep away the public's suspicions and make people feel more like dropping in for an hour or two of fun. So we decided to develop a product that would tell operators what they most needed to know if they wanted to enhance customer satisfaction."

While older, conservative hardware houses within the guild- like industry had become complacent in their success, newcomers like Daikoku and the major chains operated more independently and sought innovations. Managers like Tonai began to use terms like "quality control," normally alien to the world of gambling, and stressed developing a relationship of trust with the fans. Major new players arrived - such as the JR and Keisei railway companies and the Seiyu and Daiei department store chains - altering the pachinko industry and inexorably driving it toward reformation. Daikoku's strategy for wiping away fans' distrust hinged on a spanking new idea: public disclosure of pay-out data for each specific machine.

"It's funny when you think about it, but in the past, no one even dreamed of gaining access to a machine's payoff history," Tonai says. "Then we came out with our new information terminals - our first small step toward the world of multimedia. A lot of our customers, which is to say hall operators, practically went through the roof. 'That's crazy,' they howled. 'Why would we want to put our cards on the table for everyone to see ? They'll all flock to the paying machines and not want anything to do with the others.' But a few of them liked the idea. Some operators are less concerned about immediate profits, you know, and more interested in the long-term potential - in how they can develop their products over a period of time. People like that saw that hall operators and fans lived in two completely separate worlds without contact. Through this kind of disclosure, they could establish a two-way channel of communication. It could become the groundbreaking step in building trust between fans and their neighbourhood pachinko halls."

This march toward a new world began straightforwardly in 1987 when Daikoku Denki introduced its pioneering Daikoku Strategic Information System. The core of the system, which has been continually upgraded ever since, resides on a host computer at Daikoku headquarters; this host computer is linked over telephone lines with on-site computers installed at subscribing pachinko halls. At the end of each business day, the on-site computers upload data on the day's operations to the host computer via modem. The host computer analyses the data overnight and feeds reports back to the on-site computers the next morning. The more information subscribers are willing to release about their operations, the more information they receive back about other subscribers' operations. The service also provides industry-related news such as product announcements and warnings about rogue players - pachinko pros who illegally tamper with a machine's electronics to make it discharge balls.

Then, in 1991, Daikoku proposed to open part of this operations data for public perusal by installing special terminals on subscribers' premises. Known as Data Robo, these "data robots" allowed customers for the first time to view payoff data for each machine in the hall: How many times had it hit the jackpot? How many times did the reels spin between jackpots ? Information previously locked in secrecy was now openly available. Of course, just because a machine paid off well yesterday did not mean it would again today. But having that information let players hope that it would, and hope kept them coming back. Far from limiting interest to a few select machines, as opponents had feared, Data Robo boosted overall attendance; once this became clear, resistance within the industry quickly began to fade. More than 1,600 Data Robos have since been installed.

Silverball savings

Then, in 1993, the VR-30 appeared in pachinko parlours. A new, card-activated terminal, it offered a variety of services to fans who acquired a free "RoboCard", which holds "ball savings" and doubles as a membership card. By the time the VR-50 appeared in 1994, services had spread far beyond pachinko: RoboCards displayed rail and bus timetables, issued toll and parking vouchers, gave printouts of lists from a database of bars and restaurants and even spewed catalogue sales of organic vegetables and "made-in-region" specialty items from all across Japan. The Data Robo, once a plain, mundane data kiosk, had transformed into an interactive "multimedia" node on a national network.

"In October 1994," Tonai says, "we added a menu of nine lifestyle and convenience items, including discounted reservations at hotels and inns, cut-rate travel information, discounted domestic airline tickets, discounted Bullet Train tickets, rental car reservations, concert tickets, golfing reservations, event planning services and flower delivery. Some of the things in the works for the next stage are scheduling physical checkups, ceremonial arrangements like weddings and funerals, and riding club reservations."

As Tonai lists the services one after the other, I sense his determination to squeeze every last drop of functionality out of the online terminals - the fabled irrepressibility of the Nagoya businessman is showing through. And he hasn't even yet described a tantalising new vision: "pinball savings".

The RoboCard allows players to save their winnings in the form of electronic data recorded on the host computer at the parlour, instead of turning the balls in for a prize. These "saved balls" can then be retrieved at a later date for another session at the machines, or they can be turned in for a better prize after being augmented in subsequent visits. But two key factors continue to hold this system in check: by law, the retail value of prize items cannot exceed ¥10,000 (£63), and the number of balls banked on the cards is not transferable from one hall to another. What would happen if the limit on retail value were substantially raised - or even eliminated ? What if besides placing orders for merchandise and tickets you could actually pay for them with your "silverball savings" ?

"If you can save your pachinko balls on a magnetic strip like this, there's no reason those balls can't be transformed into electronic currency," Tonai asserts forcefully. "Pinball savings" is what makes his multimedia dream palpable.

All that's needed to turn the magnetically coded steel balls into e-cash is a network among pachinko halls, ordinary retailers and Daikoku (or some other third party who would act as banker). Pachinko fans could then join the network by installing terminals in their homes - with that, Tonai's multimedia vision would be complete. From their living rooms, sub-scribers could check on the machines at their favourite pachinko parlours and make reservations, and shop via online catalogues for all manner of merchandise and services.

To this fan of modest hopes, given to randomly drifting among the machines in pursuit of just enough balls to cash in for some beer money, the notion of shopping for catalogue merchandise with pachinko savings doesn't strike much of a chord. But being able to buy toll and parking vouchers or concert tickets this way - that sounds like something I could get into. Can pachinko offer convenience to users of every stripe ?

Planet Pinball

"What we at Daikoku propose," Tonai continues, "is to link pachinko halls, the public and this company in a trilateral network. We already have 30 million pachinko fans out there, and the halls they frequent are the perfect spots for offering activity space and delivering services, because they're located right where those fans live and work. So we thought, Let's turn the pachinko hall into an information centre for the whole community. Also, we live in an era when our population is rapidly aging. So, let's build a multi-functional recreation facility where everyone from the elderly to little children and whole families can come and enjoy themselves together."

After all, the e-cash proposal merely extends the existing system of "pinball savings". Pachinko halls' viability as a new kind of community space is borne out by a recent trend in which supermarket chains add on pachinko halls and transform themselves into the kind of "multipurpose commercial-recreational facilities" Tonai waxes enthusiastic about. A pilot network connecting homes and halls via PC-VAN, a commercial Japanese computer bulletin board system, has been in operation since late 1994 in Tokyo, Nagoya and Kawasaki with payoff information available online from Data Robo at participating halls. Right from home, players can log onto PC-VAN and go to Pachinko Marutoku Joho - roughly "Pachinko Inside Line" - to find out which machines in which halls have been performing well during the last several days. And finally, plans are in the works to broadcast payoff information over satellite TV channels.

Still, I have to wonder: can this gambling for the masses, which grew from such modest neighbourhood beginnings, really "take its seat among Japan's key industries" and claim "the cutting edge of multimedia," as Tonai so confidently asserts ? Or are such phrases merely his grandiose spin on the industry's efforts to upgrade its image and branch out into retailing and communications ?

Tonai, for his part, is not only dead serious but relentlessly upbeat. "Law is a product of the times," he declares matter-of-factly. "Regulations always follow one step behind."

In an industry increasingly dependent on digital data, Daikoku has dominated by using computers and networks to harness the power of that data. Its main strategy ? Open disclosure of machine pay-outs. But the company's trilateral network concept also brings a form of enclosure. As the RoboCard's features and powers grow, pachinko fans will inevitably find themselves drawn deeper and deeper into the clutches of the triangular alliance.

In the future, look for more and more of the better-heeled halls and chains to join Daikoku's fold. But look, too, for members of other industries to leap into the fray, seeking a piece of the action. Sega is planning to branch out from making videogame consoles for the home market to producing LCD panels that replace the brass nails and steel balls of analogue pachinko machines. Videogame software giant Konami is opening its own pachinko halls. Mizuki, a commercial network provider, began offering virtual pachinko to its subscribers, allowing fans to play the game at home and have prizes delivered.

Tonai's sights are set higher - much higher. He eventually hopes to have Daikoku's own communications satellite. "This will be our link to halls and homes," he says proudly, standing in front of a model satellite on display in the company's showroom. His eye is also on America. He speaks of this with a fervour that heightens the gravelly note in his voice: "Japan really doesn't have anything of its own right now. We've essentially turned ourselves into a high-tech subcontractor for the United States. We need to focus more on our own culture and on our own unique skills. That's the only way we'll ever be able to compete with the world on our own terms. The United States is trying to put the marketplace on what Americans call the information superhighway, and as part of that effort, they come over here talking about intellectual property rights and such, insisting that we open our markets. The way things are, we're basically helpless because we don't have anything of our own to throw back at them." "Well, what do we have ? We have this unique pachinko culture that we've been nurturing for the last 50 years. Suppose we showed the world how we've joined multimedia with that culture, and how it has given birth to this wonderful new entity that everyone just loves. It'd be something America has no way of competing against." "What I mean, of course, is that I want to export pachinko. I want to broadcast pachinko culture to the world. To be more specific, I say why not take our vision to Las Vegas ? Why not take it to Hawaii ? Near Oakland, they're experimenting with interactive cable TV. Why not take our vision there ?"

This article was adapted from one that originally appeared in Wired Japan and was translated by Wayne Lammers. Wired US researcher Bob Parks contributed additional material for this version.

Tokyo-based writer Yukihiro Hatano is an observer and avid player of pachinko.