Pachinko is an important part of Japanese culture and is definitely something that can be attributed to the country like Manga, Karaokie and Anime. In Japan, it's a favorite activity, and is so popular that it's actually been named Japan's National Game with some 25 million players and contributes to the gross national product by about 5%.
Pachinko doesn't have a definite history, with many theories about its origin. Most seem to believe that Pachinko was based on a kids game called "Log Tavern" or "Pinball Game Machine"; two games which originated from the United States to Japan around 1920. These games were renamed as "Korinto Gemu" in Japan and then changed to "Pachi-Pachi". These games were sloped boards with holes in them, and there were nails sticking out of the board. The idea with these games was to use a wooden stick to shoot metal balls one at a time up along the designated lane to the top of the sloped board. With a good shot, the ball could roll down the board and fall through the nails and into one of the holes that corresponded with points. Initially, Pachi-Pachi was a game that was designed for kids to play at home, but later, it turned into more of an arcade game giving kids the opportunity to win prizes. These games began showing up in stores like sweet shops and then were eventually added to markets and festivals. By the mid-1920's, these games started to appeal to adults and prizes changed from sweets for the children to vegetables, soy sauce, soap and tobacco.
The early designs of the games were horizontal, but because they took up a great deal of room they were changed to vertical. An additional innovation was made around this time, changing the machine from using a wooden stick to a metal stick with springs to shoot the balls, and the machine was also covered with glass to keep everything contained. By this time, the game was being called Gachan Gachanko. The name Pachinko came about around the Maji era is based on the idea of catapulting the ball to play the game.
By the 1930's in Japan, Pachinko was appearing in Pachinko halls and by that point it was possible to win coins as a prize from the machine; but it wasn't until the 1940's that the real boom happened. By then, the tobacco shortage after the war was a major influence on this, since adults could only receive 5 cigarettes per day, the Pachinko game gave them the opportunity to win more! At this time, there was also a new game design by Masamura Shoichi from Nagoya which incorporated turning wheels and strategically placed nails that made the game more exciting. In the 1950's, games were improved even further, although at that stage gambling was made illegal, and only prizes, not money could be won.
In the 80's, Pachinko became even more popular again because it started to use random number generators and the game became based on chance rather than skill. Gameplay was also faster so players could win in shorter periods of time when they played!
Pachinko made its appearance in North America as well, though it was never as popular as the craze in Japan, perhaps because of the wide variety of similar chance games, like Slots, that are also available!