Okada Manila's VIP decline triggers 35% loss for Universal Entertainment

February 17, 2025

Okada Manila's VIP decline triggers 35% loss for Universal Entertainment

Japanese gaming company Universal Entertainment Corporation (UEC) has reported net income of $102.5 million (€95.7 million) for the fiscal year ending 31 December 2024, a significant downturn from the net income of $186.5 million (€174.2 million) reported in 2023.

In a filing released on 13 February 2025, the company attributed the losses primarily to challenges at Okada Manila, where net sales fell by 15.4 percent year-on-year to $538.7 million (€502.9 million), and adjusted segment EBITDA decreased by 34.8 percent to $128.7 million (€120.2 million).

While mass-market gaming and gaming machine revenues have shown steady growth since their pre-pandemic peak in 2019, the 2024 performance failed to meet expectations and did not match the robust post-pandemic rebound experienced in 2023.

Downturn due to decline in VIP customers

UEC attributed Okada Manila’s downturn to a decline in VIP patronage, mainly due to the slowdown of the junket business, which negatively impacted the Philippine casino market. Junket operators, who bring in high-stakes gamblers, especially from China, have faced stricter regulations and reduced operations.

Additionally, the slow return of Chinese tourists, who form a major share of VIP customers, has further weakened gaming revenues, leading to a significant decline in high-roller activity and overall casino performance.

Even in the Amusement Equipment Business segment, UEC faced additional challenges. UEC’s Amusement Equipment Business faced setbacks in 2024 due to delays in pachislot and pachinko title releases, caused by low approval rates in model testing. As a result, launches were pushed to 2025, leading to a sharp decline in sales.

Sales of amusement equipment plunge

Units sold dropped from 1,80,632 in 2023 to 92,150 in 2024, causing a 46.3 percent fall in net sales to $285.9 million (€266.8 million). Operating profit also plunged 69.6 percent to $48.1 million (€44.8 million).

Despite this, UEC remains optimistic about its prospects. The company is actively recruiting and training personnel to enhance marketing efforts at Okada Manila, aiming to attract a broader spectrum of local guests as well as tourists from Japan, South Korea, and other Southeast Asian countries.

Additionally, UEC launched an online gaming platform targeting the Philippine market, alongside expanding its Reward Circle membership programme. This initiative aims to strengthen Okada Manila’s digital presence, attracting a broader customer base and reflecting the growing integration of online and land-based gaming.

With a strategic focus on innovation and targeted marketing, UEC aims to overcome the existing challenges, revitalise its business, and drive growth across its gaming and amusement divisions, ultimately restoring profitability.