Company history

Sankyo began in April 1966, when Busujima Kunio set up Chuo Seisakusho in Nagoya. The scale of the opening move is the point: a head office and its own Nagoya plant, branches in Tokyo and Osaka, and a business division at headquarters from day one — nothing like the cottage workshops that then made most of Japan’s pachinko machines. The corporate name was changed twice within that first year, to Sankyo Seisakusho in May and to Sankyo in November, the trial-and-error of a company still assembling its footing in a trade with no settled shape.

The reason the money went into organization rather than machinery was structural. Pachinko machines were sold one hall at a time, owner to owner, so neither orders nor deliveries moved unless a salesman was already in the region. From the Kyushu branch in Fukuoka in November 1968, Sankyo added Sapporo, Hiroshima, Sendai, Kiryu and Nagoya inside five years, covering the main cities with a standardized sales force while its rivals worked their home towns by hand. Production followed the same logic: the Kiryu plant in Gunma opened in 1975 as the main works, and in 1981 the head office itself moved there. Sankyo had built a national organization before it had a national product.

By the late 1970s the trade was in trouble. Space Invaders had pulled players away after 1978, and the number of pachinko halls fell below ten thousand in 1979 with no idea in the industry about how to bring demand back. Sankyo’s salesmen brought one back from the floor: players told them the best moments they could remember were when an old machine broke down, the winning gate stuck open and the balls simply kept coming. The company set out to build a machine that would do deliberately what a broken one did by accident.

Fever, launched in July 1980, paid out through an “attacker” gate that opened when the drums in the centre lined up. In one stroke it moved pachinko off the player’s craft — how you flicked the ball, which machine you picked — and onto probability and the size of the payout. On 21 December 1980 a hall in Nagaoka, Niigata, put 123 units on the floor at once and was overrun; replacement demand spread from there across the country. It also taught Sankyo the pattern it would run on for the next forty years: when the machine standard changes, the halls replace everything, and whoever is first with the new standard takes the whole cycle.

The corporate form was put in order twenty-five years in. Over six months in 1991 Sankyo was absorbed into Sankyo Sangyo, took the name SANKYO, and registered its shares for over-the-counter trading. Parts suppliers were bought in 1992 to pull component work in-house, the shares were listed on the Tokyo Stock Exchange Second Section in August 1995, and promotion to the First Section followed in September 1997. What the sequence opened was an entrance for outside capital; it was not a mechanism for letting go of the company, and the Busujima family and its two holding vehicles stayed at the top of the register.

The 2000s were the high-water mark. A new main plant at Isesaki, Gunma, opened in 2001 to replace Kiryu with more land and newer equipment, and in the year to March 2005 revenue reached about $2.1B (¥234bn) with ordinary profit near $681.8M (¥75bn) — the peak the company would spend the next twenty years trying to reach again.

Governance was rebuilt on top of that success. In 2007 Busujima Hideyuki, the founder’s eldest son and president since 1969, moved up to chairman and handed the presidency to a career insider, Sawai Akihiko. The CEO/COO split and an executive-officer system followed in April 2008, along with an internal audit office; the head office moved to Shibuya in Tokyo that August and a research building opened there in 2009. Day-to-day execution went to the professionals; strategy and the board chair stayed with the family. In 2012 the company used its cash to buy the machine maker JB.

Then the same regulatory cycle that had made Sankyo rich turned on it. Police-agency tightening of machine rules, alongside a generation that was drifting away from the halls, cut revenue from about ¥173.7bn in the year to March 2012 to ¥104.2bn a year later — down 40%, with ordinary profit down 79%. The swap from old-spec to new-spec machines did it again in the year to March 2017, when revenue fell from ¥137.1bn to $726.6M (¥82bn), the lowest since listing. Sawai lasted four years as president, Tsutsui Kimihisa nine; no insider president yet stayed long enough to change what the company was.

Ishihara Akihiko took the presidency in June 2020 as both CEO and COO, and walked straight into the worst year the company had had. With halls closing under the pandemic, revenue for the year to March 2021 fell to $529.2M (¥58bn) and operating profit to about $60.1M (¥7bn) — an industry already shrinking, hit again from outside. Sankyo moved to the Tokyo Stock Exchange Prime Market in April 2022.

What pulled it back out was the 1980 playbook, run twice. Regulators cleared “smart pachislot” machines — which track play as electronic data instead of physical medals — in November 2022, and “smart pachinko” in April 2024, and each time Sankyo was first to market with a compliant machine and took the front of the industry-wide replacement wave. Revenue recovered to about ¥157.3bn in the year to March 2023, ¥199.0bn the following year, and $1.3B (¥192bn) in the year to March 2025, close to the 2005 peak. In that year Sankyo held 26.4% of the pachinko machine market — a third consecutive year at number one — and took the pachislot market for the first time at 19.3%, leading both at once.

The structure underneath it has loosened but not changed. The founding family’s combined holding, more than 44% of the shares in 2006, had thinned below 10% by March 2024, and the chairman-CEO layer built in 2007–08 ended when Busujima Hideyuki stepped back in 2022; the presidency passed on again, to Ogura Toshio, in 2025. What has not moved is the concentration itself. Sankyo still lives entirely on the machine-replacement cycle, and the open question is whether being first to the standard — the advantage it has now won three times, in 1980, 2022 and 2024 — is a repeatable capability or simply the shape of its luck.