Pushing the Envelope

A New Way to Look at Operating Pinball Machines

by Jack Guarnieri, Jersey Jack Pinball & PinballSales.com

Today, in thinking about what to write for this column, I read Eddie Adlum’s April Editorial. It talks about operators getting out there and pushing the envelope to get new locations that may be harder to get. The suggestion comes from Eddie after watching the movie The Founder about McDonald’s Ray Croc.

Having my roots as a street operator, I’m still very sensitive to that sector of our industry. So many pieces of equipment made today are aimed at the huge and growing FEC market and are not usable on the street. The staples of the route –– the  jukebox, pool table, pinball machine, dart game, photo booth, touchscreens and other videos –– leave out redemption and instant-win in many jurisdictions. The footprint needed for big simulators and redemption games is most often not a reality.

I get why the McDonald’s and Starbucks of the world do not want us in their locations. We don’t produce enough revenue per square foot and we are not part of their business plan. I do agree with Eddie that we should be looking under rocks and be a contrarian sometimes in looking for business opportunities.

Since we know pinball is near and dear to my heart, I can tell you of a few contrarians who operate pinball machines where other operators do not. On a recent visit to Seattle, I met up with a chap named Avout who owns Shorty’s in the Belltown section. About the location, the Shorty’s website says this “Coney Island-themed bar is a favorite hangout, offering hot dogs, nachos, pinball & arcade games.” It’s what can be called a “themed dive,” but it is certainly a hot spot and a lot of fun.

The resurgence of pinball in commercial locations is something I’ve been partially credited with and that’s not a bad thing. Operators like Avout, who own and operate such locations, as well as revenue share equipment in other “dive bars” and selected establishments, are filling a growing niche. While many of the operators frown on pinball as a game that needs a lot of attention, now costs in the $7,000 range (and up), and has a bad ROI, operators like Avout cannot keep up with the demand for more pinball machines on location.

How can this be?

In 2000, when I sold hundreds of pinball machines to the home market, a lot of those households had 10-year-old kids. They’re 27 and in the workforce now, and are a vibrant part of this “dive bar scene” (and much more). As an example, the craft beer scene is booming and those tasty brews go perfectly with pinball!

A lot of the old time operators really want to run more of the traditional equipment, getting, for example, longterm contracts on downloading jukeboxes and pool tables. They don’t want to shell out the money to buy new pinball machines for a location.

They’ve been doing what the unthinkable was when I was an operator: splitting the location with a pinball operator. This amazing, cooperative effort comes more out of necesssity than from the operator’s desired business plan. But, you know what? It works! The pinball operator loves and understands pinball, and they’re well able to provide great, newer games and service them!

What I will call the “old line operator” has “been there and done that” years ago with pinball. He’s purchased some recent games that haven’t lived up to his expectations, so he’s a bit sour on pinball. Still, the location is asking for pinball and to make the location happy, he is forced to buy a pinball machine.

Enter operators like Avout all over the U.S. today. They are typically a bit younger in the industry and willing to make the investment in money and time to operate pinball and do it at a nice profit. Here’s the deal: They’re not spending any money buying pinball machines. Rather they are just parking the money in those pinball machines for a short time while they make money on location with these games eventually finding their way to the home pinball buyer.

Read that paragraph above again because that is truly what is happening now.

I travel a lot and visit this type of location all across the U.S. If you are not looking at them, you’re missing out! While they’re not Starbucks or McDonald’s, I can tell you that there are a lot of them, and that number is growing. As an example, when I visited Avout, he was building a new dive bar in the Pioneer Square section of town. (He needs more pinball and a few classic video games too.)

So imagine that two operators can split one location and everyone is happy. I’ve seen it and it works very well. Of course, it will take some work and cooperation to make it happen but, so does everything else. Get out there and push the envelope!

Jack Guarnieri started servicing electro-mechanical pinball machines in 1975 and has been involved in every phase of the amusement game business since then. He was an operator in NYC, then began a distributorship in 1999, PinballSales.com, selling coin-op to the consumer market. In January of 2011 he founded Jersey Jack Pinball (named after his RePlay Magazine pen name), which builds award-winning, full-featured, coin-op pinball machines. Email Jack at jack@ jerseyjackpinball.com.