Jack's Soap Box

As revenue declines on video games in commercial locations, the revenue continues to increase for makers of home video game systems. It's up over 8 Billion dollars a year now. That's more than the movie industry!!

So again we see an increased demand by consumers to play, but play at home, when and what they want to play.

Pinball is the natural....Playing it on a video system is OK. Try Microsoft Pinball Arcade which uses Gottlieb games. For the true pinball fan the only way is live with the silver ball(s) rolling around the playfield.

It's getting harder and harder to get good quality pinball machines to sell to the home market.

For example you would figure there's over 22,000 Addams Family pinball machines out there, but just a handful available at any one time for sale. Is someone hoarding them....Not at all.

As one tier of "classics" dries up the next level of games gets scooped up by collectors or casual players who want the fun and excitement of pinball at home.

Collections on video games as we have known them continue to decline.

Are we about to see Pinball machines capture more market share in commercial locations?

It's possible. I don't think we'll see Pinball return to it's glory days soon but you'll see more of Gary Stern's games out there earning more and more money as every month goes by.....Why?

The download / Internet connected games are increasing in commercial locations. Big deal. You can still play better video games at home on Playstation 2.

What about the interactive online tournament video games; Not allowed everywhere. Besides, if I want an interactive game I'll play one on one basketball in my backyard.

You'll see more and more free access Internet Kiosks too that offer interactive tournament games and lotteries. The traditional "game operator" will not be able to compete, because the better ones are FREE and that's a word that operators don't use......Beside they won't be invited to that party...That will be big Corporate money and strategic partnerships.

So that brings us back to Pinball.....Pinball has it all ! The themes, sound, action, speed, mechanical tricks, skill and you really never master any game. If you play on a great game it really challenges you to do better....Harry Williams said it.....The Ball Is Wild !!

Best of all...you're customers probably don't have one at home.

Look for Stern Pinball to release at least three really great new pinball machine titles this year. If you're an "operator", do just that....Operate them. Buy them and put them out in your locations. If you keep them clean and pay attention to them, they'll earn nicely for you...long term.

Maybe not big bucks, but then again a new pinball machine does not cost $15,000.00 either like a deluxe video game. That game will be on a home system two weeks after you put a hasp your cashbox door.

Mix a new pinball machine into your Pool / Touchscreen / Golf / Jukebox / location. It will average you up and keep your players and location owner happy too. Take your older tired pinball machines and trade them in.

We've talked to some operators who flat out told us that they don't offer pinball machines to their locations anymore. Well, that opens up a hole in the location that wants a pinball machine.

Look, adults love the game. When kids see pinball they're playing it too.

Has the price of $3595.00 gotten too high to make it profitable for an operator to buy and operate pinball??
I don't think so.

Let's look at what an operator can do if he is either asked to buy a new pinball machine by a location owner or if he is thinking about buying a new pinball machine to replace an older one......

A new Stern High Roller Casino will cost you about $3595.00. You long for the days when a new pinball machine was under $3000.00...$2000.00?? OK....

Tell your location that as a condition of you buying this new pinball machine, the first $25 from the weekly cashbox collection is yours, then you make your split. They'll go for it.

Hey, we did it when CD jukeboxes first came out. We know there's guys out there today still taking minimums and "first money" out of jukeboxes that are 6, 7, 8 years old.....

If you're getting the usual 50/50 split, that $25 off the top is only $12.50 for you but that's an extra $650.00 in the first year the game is in the location. If you rotate new for new in and out of the location, the same rule follows the new game in and out to your other locations too.

Chances are that you have a pinball machine to trade in from that location. I see games like Addams Family pins that are filthy, that don't work and cannot be making make more than $20 a week. It's there to take up space along with the old jukebox and pool table (both of which need to be upgraded too).

These are in locations that guys have had since the roads were dirt. They feel they'll be in there forever or they have had contracts with for years....That's no reason to ignore the opportunity to make more money for your business or your partner's (location owner's) business. In fact it may breach the contract.

So the Addams Family game owes you nothing huh...The $20 it makes a week is "found money" huh... That's $1040.00 for the whole year in your pocket.. Without deducting the service calls, parts if you ever replace any and a spit shine now and then to see some of what the playfield once looked like.....Sell the game now and you can pocket at least $1400.00 as is.

So you have $1400.00 right now that was making you $1040.00 (gross) in a year, plus the $650.00 (off the top money for the year) to go toward your $3595.00 purchase of a new pinball machine.

So that $3595.00 pinball machine now becomes $1545.00 and it will make you not $20 a week but $45 or more a week. Who knows you may even see new life in the location and recover that pool table and put some new CD's in the jukebox too.

I paid more than $1545 for a new pinball machine in 1980.

It's 21 years later, what are you waiting for? The next coming of Space Invaders, Defender and Asteroids?? Ding fries are done......

Don't buy anything and soon there won't be any factories doing any research for the Coin-op market. Note (On 3/2/01 Midway basically announced that they will no longer produce Coin-Op games except for their Touchmaster games) Mounting losses and the slowing Japanese economy have rumors flying that a couple of other large Japanese Based video game manufacturers may exit the Coin-Op market too...let's hope not. See Midway post below from 6/22/01

When your stuff falls into toothpicks and you can no longer get parts...then you may decide to finally buy a new game.....what factories will be there waiting to sell you one?

The bunker mentality does not work here. You need to invest some money to make money.

Come to think of it, if you have been running your equipment into the ground and not upgrading your locations these past years with newer equipment, you'll probably be out of the business this year anyway........

The Internet has opened the eyes of location owners to the products available...It may also open eyes to a new crop of business people who will enter the coin-op industry.

We may soon see more manufacturers "go direct" and bypass a distribution system that does not promote or market their products.

Don't get left behind, pay attention to your business and it will pay you back !!

Good Luck in '01...But that Luck is of your own making..... Thanks for reading my rant......Jack.