Villejuif
Quoted from Potatoloco:To preface this, I only own all Sterns, but not out of brand loyalty, they just happen to have the themes that I wanted. POTC is a theme my wife loves, thus we will be picking up a JJP Pirates pin next year.
That being said, my career is in business and product development. Simply put, JJP put out a great looking product that has a hefty price tag with it. But to believe this will cause an enormous change from Stern for them to keep up is nowhere near reality. Understand, JJP just made Stern a ton of money last night. I'm not an expert in pinball business structure, but I do understand product pricing, especially when it comes to similar products by different brands. Unless Stern feels they need to increase velocity of sale, I see this actually causing their prices to rise, not drop in the long term. JJP has a price point of 8500-12500. This in itself will most likely trigger Stern to do one of two things. Either keep things the same or bump up pricing along with a slight bump in quality to justify the pricing. I'm thinking the latter and I can see 6500 becoming the new standard pro price eventually.
When you already own a majority of the market share and your primary competitor is still approximately 35% higher in pricing for available product (cheapest models for both companies), it's hard to hit the panic button. If anything it signals that you have room to move up in your pricing because the market is saying "we will pay higher prices." As a market leader, this is a gift. Obviously, there are homeowners saying they're out on future NIB purchases, which could possibly hurt sales short term, but then again, it may not with the continuous growth of public awareness about pinball. It will be interesting to see this dynamic play out.
The reality is, a JJP will blow a Stern pin away with the wow factor simply because it has to at the price point it's at. When you're priced higher than a competitor, your product has to really be differentiated in order to show that value. JJP has been successful in this regard up front. A Stern pin can keep looking stripped down at the prices it's at and most likely pushes that price up gradually by 2019.
Anyhow, I hope both companies will put out the best possible product they can and do the best they can to enhance the customer experience. At the end of the day, I just want to play fun pins and support a great hobby.
Very well put. Just wants to add a few elements:
1) The pinball NIB market is not expanding in France. It's contracting. Location play is basically dead - at least compared to what it used to be. Aiming at coin ops seems dumb seen from here. Barcades do not exist (would love to see if this can generate profit) and less and less traditional bars have pins.
2) No other manufacturer can currently compete with Stern in the $5000 price range.
ROI for a coin op for a stern pro is already bad here - no way a $7k or $8k pin is going to be viable. >95% of NIB pins put on location here are Stern pros. But it's probably already more viable to put an old game in player's condition. It won't lose any resale value after 1-2 years. As compared to a $1-2k loss when trying to resell your game after a year or two. To swallow a 1000 euros loss, at 2/3 - 1/3 split with the bar, with 3 games for 2 euros, knowing close to 50% of your income goes back to the state in taxes or insurance, counting maintenance and free plays you need ≈5000 plays to break even. It's "only" 20 games per day in a year for a place opened 250 days/yr... except you don't reach these figures except for the first weeks after release.
3) Stern's consumers' loyalty is at an all times low. They basically need to address two critical points to recover: a) do a decent effort at finishing code on several games. b) solve PF quality issues. Dimpling on SW has been horrible on some games. At the same time a just-out-of the box Alien was played all week end during a pinball convention: nothing as bad as the SW played the same week end.
4) Stern can't ignore the LE / Premium segment as this is where they make a huge profit.
I doubt Stern will suddenly collapse - for that you would need a major competitor capable of producing large amounts of several decent games with good licences for $5 - $5.5k.
In the meantime Stern cannot ignore that the market has shifted. They know SW LE do not sell as well as they should have.
We will see how they react. Interesting times.
San Diego, CA
