The Crane Machine
The Upsell Engine in the Arcade
By George McAuliffe, President, Pinnacle Entertainment Group
Let’s start by congratulating Rhode Island Novelty, Inc. for their milestone 35th anniversary. While we’re at it, let’s also thank them for their many contributions to the growth and development of our industry. As our client, we’ve worked with them for the last few years and sat in their team meetings from product development to taking care of customers. They are a quality organization and deserving of their recognition in RePlay. Congratulations to the RINCO team!
A lot has been learned in those 35 years that remains relevant. You could argue that redemption is why our industry is here today –– and enjoying its widest audience ever.
Above is a photo of one of my first redemption centers from the 1980s. Prior to that, the game mix in our Time-Out arcades consisted of 70% video games, 25% pinball and 5% kiddie rides. With the invention of the home video game, arcade video sales dropped big time. At the same time, pinball continued its own multi-year decline. Overall sales dropped by 40% over three years. To defend, our company started experimenting with redemption in 1983, adding Skee-Balls and a basketball game to our mix.
The results were good and we saw sales grow again. Manufacturers saw the promise and throughout the second half of the 1980s, more redemption games hit the market (along with cranes which I covered in a previous column). Our arcades got bigger to accommodate redemption and evolved up to the modern-day family entertainment center or FEC: multi-attraction, big-box entertainment centers with large arcades and a big redemption presence.
Below is a photo of our Time-Out-On-The-Court redemption center in 1989. This was one of the first all-indoor FECs in the country and, as you can see, made a big commitment to redemption with a 30-foot counter.
By the mid-1990s, redemption represented 35% of the game mix with cranes and merchandisers making up another 5%. Counters got bigger and merchandise more varied. Redemption game manufacturers really came into their own. Pinball had all but disappeared from the arcade (but thankfully not from the home market and today, it is even featured in some concepts). Photo booths declined as well –– and yes, they’ve made a great comeback in recent years. Cranes became more popular and merchandisers –– non-claw, direct prize games –– appeared on the scene. Stack ’Em comes to mind as one of the early high-volume merchandisers. And, it kept growing.
Fast-forward to the last few years, redemption’s wide appeal, combined with the aging of Millennials and Gen Z –– and the youngest baby boomers for that matter –– brings us to what I call today’s “Golden Age of the Arcade.” Demographic changes mean that we entertain three generations in the arcade today. They all like to play redemption games and win merchandise.
Displaying prizes has also changed over time. Redemption stores have revolutionized the redemption process (see the photo above of our latest installation courtesy of Sports Facilities Companies). It scores not only in the obvious ability to drive sales by the upgrade to the merchandise display, but in their vastly improved effect on the guest’s checkout experience.
So, we’ve come a long way as an industry. Nothing illustrates that more than to note that, back in the ’80s, the industry term for the low-ticket items we call “bin items” today was “slum.” I’m not kidding. Nobody thinks that way today. Redemption is driving the arcade and, therefore, the FEC business. That’s a testament to our manufacturers and their decades of experience designing games with player appeal. We also have our merchandise suppliers like our client Rhode Island Novelty, who are great at bringing trends to the FEC world and managing the supply chain from China to our player’s hands. And let’s not forget the arcade operators who drive innovation and player appeal!
George McAuliffe has helped hundreds of businesses large and small develop and execute arcades and FECs. He has personally operated family entertainment centers from 2,000 to 150,000 square feet as a corporate executive, entrepreneur and consultant. He is the owner, with his partner and son Howard, of Pinnacle Entertainment Group.
George lives on the Jersey Shore with his wife, Julie. They have three sons, two daughters-in-law and a grandson.