U.S.A. - The state of the coin-operated pinball market today can be summed up simply: steady as she goes. New pinball production by Stern Pinball Inc., the world's sole manufacturer of flipper games today, remains in the 8,000 to 10,000 per year range as it has since 1999. This year's production totals are up a bit from last year's, but still within that spread.
On the street, average weekly earnings edged upward last year as well; pinball machines operated in U.S. locations today generate, on average, $70 per week, up fractionally from the prior year's figure of $68. A key reason for the increase: operators are steadily increasing the price per play, according to VENDING TIMES' annual Census of the Industry. In 2002, more than 70% of pinball machines were believed to be set on 75¢ for three balls.
Consumer demand for pinball games, both new and used, remains a key factor that is helping to ensure market stability for this type of product among operators. Consumer demand remains roughly on an even keel these days, up in some sectors and down in others. Up to 15% of all new pinball sales in America , something like 1,200 units annually , are believed to go to private homes and collectors. Older pinball games are sold either to consumers or to other operators, in most cases. "If you go to a distributor's today and look for a used pinball, there isn't one," claims one expert.
One way to portray the status of the 2003 pinball market: on an average business day, VT estimates that:
* Four brand-new pinball games are purchased by consumers for their homes
* 24 brand-new pinballs are purchased by operators for routes and arcades, with 15 of these going to U.S. locations and nine going overseas
* A few older pinball games are removed from routes and arcades, with most going to homes and private collectors.
TEN YEARS AGO'
Although pinball is a steady business, the makeup of today's market is radically different compared with just a decade ago. Back in 1992, four pinball manufacturers were pumping out 100,000 units a year, with almost all new products going to pay-for-play locations. Today, as mentioned, the consumer market for used machines has assumed unique importance.
Jack Guarnieri of Pinballsales.com, a leading consumer pinball outlet, reports that his shipments of brand-new flipper games to consumers are running at an all-time high. And, pinball operators interviewed by VT for this feature report that steady consumer demand for used pinball games remains a significant factor in flipper profitability. With consumers willing to pay far more than distributors would give on a trade-in for the same machine, a greater ROI exists for pinball today than cashbox earnings alone might indicate.
SPI president Gary Stern advises that pinball production by his factory, while healthy, is "still not so many that the market will be flooded or that resale value would be hurt." The company does a careful balancing act to ensure that its products will hold their value, restricting itself to three new models a year. SPI also goes back each year and produces limited additional runs for earlier flipper games such as "Harley Davidson" (originally released in 1999, it got a limited reissue in 2003).
"Terminator 3" based on this summer's hit film is the game slated for production this September (and Stern claims that if star Arnold Schwarzenegger is elected governor of California, the resale value of this game will "go through the roof"). October will see a new limited reissue of "Simpsons" pinball games. A brand new game is coming for November and December; Stern won't reveal the title but he does say it will be based on another big movie property.
Some observers may feel that today's pinball games look no different, at first glance, than pinballs of a decade ago. Stern is quick to disagree , while just as quickly reassuring listeners that any changes remain within the bounds of player expectations. "We are constantly improving the game to make it more reliable, but it remains a mechanical action game at heart and we don't want to go too far afield," Stern says. "We are improving sound, flippers, and mechanics all the time."
Major innovations in recent years have been "changing the philosophy of game design and the people executing the philosophy," he asserted. As examples, Stern cites SPI's production of games designed by Steve Ritchie and Pat Lawlor, whom he praises as "the two best pinball designers of the modern era." Design philosophy at SPI has changed from "too simple" to "more mechanical action," he says. The current generation of SPI games offers more depth of game play that appeals to both casual and skilled players, he continued. "The trend in many types of games worldwide, such as Amusement With Prizes games in England, is to broaden the appeal to bring in more casual players without alienating the core player," Stern pointed out. "We are doing the same thing with pinball."
Stern believes the number of pins on location in the U.S. has stabilized, following a period of several years when many older units were sold to the consumer market. "It [the operator market] is probably coming back a little bit," Stern ventured. "Our bread and butter is still the operator. There aren't a lot of games for him to buy, but pinball is still here. There are some units in arcades but our main market is street locations, although that is no longer just taverns. It includes movie theaters and places like Wal-Marts, where 'The Simpsons' is a preferred item."
WHAT COMES AROUND
Is pinball being exposed to younger players? Stern says yes: "We know there are tens of thousands of machines in homes around the country. The number of older games taken from locations in Europe and Asia is huge, and they all went to the home. With the number of games being sold to the home, many younger people are becoming familiar with pinball. Every home game probably introduces a dozen children to pinball." New Stern pinball games are sold through The Sharper Image catalog these days. In addition, Gary Stern reports that more and more distributors are focusing more on the retail side of the business by expanding their showroom to sell pins, pool tables and jukeboxes to consumers.
Service will always be an issue with any complex electromechanical game, but SPI , supported by its operator customers , asserts that a brief routine program of monthly maintenance will keep most flipper games working just fine. "We pack in every game a small maintenance list of 10 steps to perform every month," pointed out SPI's Jolly Backer. "It's pretty simple stuff. Remove and clean the glass, clean the playfield, look for burned out bulbs, check wires and coin doors , which you should do for any type of game , check diagnostics and audits and switches, check leg levelers, play a game and makes sure all coils and flippers are working. All in all, the entire routine takes less than 20 minutes per month."
An electromagnetic skill game like pinball may seem to be an obvious candidate for redemption use, but Stern says pins "take too long and require too much skill" for ticket redemption purposes. The company does make simpler redemption units such as "Monopoly" and has created an oversized ticket dispenser version of pinball for Chuck E. Cheese's chain, used in conjunction with its new Tournament Pinball system, known as ToPS.)
Any conversation with Stern, a second-generation flipper game manufacturer, tends to become an evangelistic revival sermon, focusing on the wonders of pinball. His enthusiasm is well-known to the industry and , in an era where cynicism by manufacturers is not unheard of , the obvious sincerity of his enthusiasm for his own product is refreshing. But if Gary Stern is a pinball evangelist, SPI's operator customers sometimes sound like true believers.
Jerry Johnston of Amusement Unlimited (Eugene, OR) is one such cheerful convert. "Today's environment favors companies that are truly operators," he declared. "That means companies that take a location and put in the full range of equipment that is needed. That's where pinball comes in. We certainly do get requests from locations for pinball now and then; we try to meet those requests if we can. A good operator provides a wide variety of options and pinball is a very valuable item on that list; I wouldn't want to be without it."
Johnston confirms that pinball isn't just a tavern game. His company operates pins in many bars, of course, but also in college arcades, bowling alleys, and pizza parlors. "All of these can be successful pinball locations depending on the crowd," Johnston said. "It's a matter of trial and error to discover which locations are successful with pinball. You just have to try them out and see. Yes, there are locations where pinball won't work, just like there are some locations where golf video games don't work. But there are locations where pinball works very, very well. So we still operate them, we still buy them on a consistent basis, and we're always happy to put them out and see what they do."
The pinball fan base remains mostly male, but Johnston says, based on personal observation, that the other demographics are quite varied. "The age range for players is all over the map," he said. "Our best pinball location is the University of Oregon, where we have a 35-game arcade and the typical fighting games and gun games work fine, but we also carry at least five pinballs there and they perform very well. They are played by students and professors."
Pinball earnings are steady, not spectacular, in most cases, Johnston said. "We consider a pinball that does $100 a week a very good pinball," he noted. "An average figure of $78 is right on the money, I'd say. Our best is over $100 a week." Gary Stern reports hearing of pinball games that make as much as $400 per week in top national locations.
Rotation may not be as important for pinball as it is for, say, video games, Johnston said. "We used to rotate all of our pins every six months but we've gotten so busy that we haven't kept to that lately," he admitted. "Of course in some locations we have a pinball that doesn't need to be moved. We have an 'Attack from Mars' in one location that has never moved. It's six years old and they love it. They know they could have a new pinball but they don't want one. It's a great machine, my favorite, by the way."
Maintenance requirements have prompted some operators to stay away from pinball, Johnston conceded, but he agreed with Gary Stern that today's equipment has reached new levels of reliability. "I believe our pinballs today are giving us less maintenance problems than we've ever had," he declared. "The Stern games are dependable. We don't have the service calls that we used to have on them."
Johnston doesn't agree with operators who shy away from pinball as a class. "Pinballs are like motion pictures: there's great ones and mediocre ones," he said. "If we identify that we have a mediocre pinball, we're likely to trade it in. But we do have some real stars and we keep those. Everybody knows that 'Medieval Madness' and 'Attack from Mars' and 'Addams Family' are great pins, as are 'Monopoly' and 'The Simpsons' and some of the newer ones. We have all the recent titles; I just bought a 'T-3' yesterday, in fact."
The decision to buy a new pinball at Amusement Unlimited is less about "if" and more about "how many," Johnston said. "When a new title comes out, we'll talk to distributors about it and we'll play it," he explained. "Generally we always buy two or more of each new title, at least. A lot of our decision about how many to buy of each game, has to do with what needs we have as far as new locations, whether we've sold some units to the home market recently, and so on. That determines whether we buy three, four, or five units."
Resale value based on consumer demand is a vital factor in pinball profitability, Johnston confirmed. "Another good thing I like about pinball is that you still have value on them when you sell them," he said.
"Pinball definitely holds its value," he explained. "We have sold a lot into the home market and through distribution, and even to a couple of other operating companies. Yesterday we sold a five-year-old pin for $2,500. For the right amount of money, every pinball I have is for sale. We have sold pins for considerably more than we paid for them, after operating them for four or five years. They can go to retail market for 50% more than what a distributor would give us. The home market runs hot and cold; lately it's been a bit softer but I expect it will heat back up around Christmas. But it's not a big deal; if we don't sell any to retail customers that's okay too. We can always sell them through distribution."In sum, Johnston says: "I expect we will always operate pinball. It's part of the business."