It's been a while since I wrote anything about pachinko, so I might as well do something now.
Traditionally, pachinko parlors have been run by the yakuza as gambling parlors, but with the anti-gambling laws, they've had to develop work arounds. Older machines would shoot a stream of silver-plated steelies, roughly 1/4" balls, up to the top of the playing field. The balls would hit pins or drop targets and either fall into holes on the board or land harmlessly at the bottom collection tray. Getting the balls to special locations on the board awards points and returns the balls to you for replay. If you're lucky, you get more balls back than what you initially paid for. A controller knob directs the stream within a narrow range of the top of the board, and professional players try to find the "golden spot" on the control that aims the stream towards the high-score points, then just sit frozen in place for several hours for a steady payback. By the end of the day, the successful players could have 10 or 20 large trays of balls to cash back in.
The thing is, with the anti-gambling laws, the parlors can't pay out cash. Instead, you'd get packs of generic cigarettes, 6 packs of beer or similar low-value prizes. You'd take these to some location around the back of the parlor, generally down a nearby alley, where someone sitting on the other side of a door with a small panel cut out would exchange the prizes for money (a carton of cigarettes for $10, the six-pack for $50, etc.) Individual packs of cigarettes would be worth nothing and the players would just smoke those. On Friday nights, in Tokyo, you could tell from the long lines in the alley where the exchange window was, and who had just gotten paid for the week at work. On the other hand, I haven't seen anything like this near the parlors here in Kagoshima, so maybe a different in-store cash-out system has been instituted.
As for the machines, most players were older salarymen and they gave the parlors a reputation for being smoky and stodgy. To bring in new customers, the machine makers have steadily been changing the play to be closer to slots or video games. In fact, most of the machines now are digital, with video screens displaying all-original anime cut scenes from Evangelion, Fist of the Northstar and City Hunter that can't be viewed any other way, in order to attract younger hard-core anime fans.
(Ranma 1/2 TV ad on Youtube.)
For me, the interesting thing is to be walking down the street and finding 3 or 4 pachinko balls lying scattered on the ground. All I can imagine is that some novice player had lost money at some parlor, and been left with a few balls at the end of the night. Rather than play them, they toss the balls away in disgust. Often, there's no parlor in sight, so there's no obvious explanation of how the balls ended up in the dirt or in front of a vending machine. Usually, they're still in really good condition. I've even found a gold-plated one. I keep them because they are made of steel and are fun to play with using a magnet. Some day I hope to make a marble machine using all of the balls I've found here.