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(Topic ID: 112601)

Can Boutique Pinball Survive?


By kaneda

5 years ago



Topic Stats

  • 127 posts
  • 63 Pinsiders participating
  • Latest reply 5 years ago by dgarrett
  • Topic is favorited by 3 Pinsiders

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    There are 127 posts in this topic. You are on page 3 of 3.
    #101 5 years ago
    Quoted from luckymoey:

    My read...smart, honest, and lots of connections and friends in the business. Sounds pretty complicated.

    As strange as this sounds but "made in America" counts for something. Doesn't it?

    #102 5 years ago
    Quoted from aztarac:

    I think you can argue the pre-order concept until you are blue in the face (and it has been in the DP thread). I agree that you need to know that those pre-ordering are serious and a deposit of a $1000 isn't a bad idea - separates out the tire kickers. But where I get hung up is the next phase - as you noted, you are ready to build games, you just don't have the financial backing. The customers shouldn't have to take on that financial risk. If you believe in your product (which you obviously do), then it's up to you to secure the funds through a traditional loan, build the game at your risk and then say - "Hey guys, games are done, boxed up and ready to ship, who wants one?!"
    Nate shied away from using the term in his recent podcast, but pre-orders are asking customers to basically gamble with thousands of dollars. If a company goes belly-up there is little chance the pre-order money will ever be refunded. There is no legal binding contract, just a 'handshake' through PayPal or some other online payment method.
    Obviously its not as cut and dry as that, but you get my point. And don't get me wrong, I want all independent/small build pinball companies to survive (well, maybe not VD). I just think this pre-order system the pinball world has created is really flawed. Again, my opinion, and people can do what they want with their money.
    I really truly like what I see in WOOLY and is one game I'd like to own in the future once I get a chance to see it in person and play. Guess that may or may not happen based on if you hit your pre-orders or not. Would love to see it at the 2015 Pinball Showdown in Denver.

    Can I ask -- How easy is it for a guy with a small business, and $50K in deposits on expected gross sales of $400K to walk into a bank and ask for a ... $500K loan?

    -mof

    #103 5 years ago
    Quoted from mof:

    Can I ask -- How easy is it for a guy with a small business, and $50K in deposits on expected gross sales of $400K to walk into a bank and ask for a ... $500K loan?
    -mof

    Depends on how much collateral you have? Homeowner? 1st mortgage with available equity on the primary residence? Vacation home? Marketable securities? Fine art/collectables? Accounts receivable from the business? Machinery & equipment? Inventory?

    A $500K loan is pretty easy to get with $1MM of collateral, and with the right collateral mix, you can get up to $800K.

    #104 5 years ago
    Quoted from Razorbak86:

    A $500K loan is pretty easy to get with $1MM of collateral

    Ok, so all I need to secure a $500K business loan is:

    1. Put up $500K in assets as collateral
    http://www.ehow.com/how_6063619_business-loan-_500_000.html

    That easy, eh?
    -mof

    #105 5 years ago

    Cash flow loans are tough to obtain, because lenders are banking on the business generating enough future profits to service the debt, and with a start-up, there are no prior financial reports to rely upon as a historical track record of profitability, and start-ups have a fairly high rate of failure.

    Asset-based loans, on the other hand, use other assets pledged to the lender as collateral. They are usually more expensive (i.e., higher interest rate), but easier to obtain, because the lender's advance rates are pegged at a % of the liquidation value of the assets (e.g., 50% for real estate, 60% for inventory, 70% for machinery & equipment, 80% for accounts receivable). Even in a meltdown scenario where the business goes belly up, the lender can usually recover their principal by liquidating the pledged collateral.

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    #108 5 years ago

    After awhile just about every thread on Pinside devolves (or maybe evolves) to bewbs....

    Not complainin', just sayin'!!

    #109 5 years ago

    Show me a boutique without bewbs.

    #110 5 years ago

    I need to go clothes-shopping with my wife more often.

    #111 5 years ago

    While the idea of putting up all your assets for a loan, sounds great, putting out pinball machine is a risky proposition, but more important is that even if it is very successful, it is not going to have some huge payday. So I think it becomes hard for anyone to take that level of risk when the upside is as limited as it is.

    If the community wants to see these pins come to life, we have to find the right balance. Again, I'm not saying throw money at something based on flyer or a first whitewood, but when you see a game that is 'complete' (meaning physically and code), ready for production, then at that point I think if you are interested in the game (have played it, etc.), then I think that amount of risk in doing some level of a deposit and doing a pre-pay of a good percentage of the game when your machine is ready for production, is not unreasonable if we want to continue to see games like Wooly get made.

    I do believe that the boutique makers, to succeed, will need to hit the road. There is a huge percentage of potential buyers for a theme, that are just not going to put any money down if they can't see and play the game in person. Having it at expo is great, but it seems you need to get the game to the different regions of the country. Hopefully in the case of Wooly, if Scott does not get the sign-ups he needs, hopefully he will figure out how to do that (easier said than done), so that more people can see and play it. Clearly in that thread there is a lot of 'love what i see, but I need to see it in person' types of comments.

    #112 5 years ago

    Here's something I'd like to see play out more often:

    1. Collector buys a beater pin
    2. Collector sands off the art and rethemes it (e.g. http://ipdb.org/machine.cgi?id=5478).
    3. Collector adds new rules and sound using PROC
    4. Deal is struck with game licensee(s) to make the retheme.

    I would give my left nut (or $8k if they don't want my left nut) for the original Metallica:

    Metallica.jpg
    #113 5 years ago
    Quoted from rosh:

    While the idea of putting up all your assets for a loan, sounds great, putting out pinball machine is a risky proposition, but more important is that even if it is very successful, it is not going to have some huge payday. So I think it becomes hard for anyone to take that level of risk when the upside is as limited as it is.
    If the community wants to see these pins come to life, we have to find the right balance. Again, I'm not saying throw money at something based on flyer or a first whitewood, but when you see a game that is 'complete' (meaning physically and code), ready for production, then at that point I think if you are interested in the game (have played it, etc.), then I think that amount of risk in doing some level of a deposit and doing a pre-pay of a good percentage of the game when your machine is ready for production, is not unreasonable if we want to continue to see games like Wooly get made.
    I do believe that the boutique makers, to succeed, will need to hit the road. There is a huge percentage of potential buyers for a theme, that are just not going to put any money down if they can't see and play the game in person. Having it at expo is great, but it seems you need to get the game to the different regions of the country. Hopefully in the case of Wooly, if Scott does not get the sign-ups he needs, hopefully he will figure out how to do that (easier said than done), so that more people can see and play it. Clearly in that thread there is a lot of 'love what i see, but I need to see it in person' types of comments.

    don't want the risk? don't get into the business...

    sorry... many people risk many things to start their businesses, it isn't unique to pinball... it isn't up to the customers of a business to "share the risk"....

    #114 5 years ago

    The other thing people can take into consideration is the reason people go into business. For those that decide to risk it all, and go out and get that enormous level of debt, they expect payback and a significant return on that investment. For them it's about making money and trying to procure wealth. In my case and in the case of a lot of other people starting their own projects, we've made these pins because we love pinball and wanted to make a cool game to share with people - not to make loads of money. Just look at Skit-B - they're most likely coming close to losing money on Predator but they're moving ahead with it anyway because it's a game they are passionate about and started out the same way - they wanted to make a cool game because they love pinball and loved the Predator theme.

    #115 5 years ago
    Quoted from ccotenj:

    don't want the risk? don't get into the business...

    There is still plenty of risk they are taking, before you get to the point of production. It can easily take a hundred thousand dollars to get to the point where you are ready for production (especially if licensed, since that is likely going to have a minimum upfront payment whether the game gets produced or not), and typically that is not including cost of the time of those trying to make it happen. And at that point they are certainly taking the risk that no one will want the game. So at some point you have to decide how much and what risks you are willing to take.

    I've been apart of multiple start-up companies and I can tell you we knew when we started we would not have sufficient money to get to where we wanted, but believed we could get to the point where others would than be willing to take the risk (which in this case was getting VCs to invest), but I can tell you there were points in time where we were 'well, if we don't raise money by the end of the month we need to roll up the carpets and call it a day', we took that risk, and fortunately we were able to find VCs who believed in the vision and were willing to open their checkbooks.

    So, I would also argue the risk the other way, if you don't want to take the risk of the pre-order then don't. But, if you want to try to help make these boutique games happen, and you believe in the product/machine, than take the risk to help make it happen, as we have seen many people here do

    Each of us has our own feeling on level of risk we will take in many of the things we do. I personally find it amazing that people gave Jpop as much money as they have based on very little proof he can produce a game, but that was their choice to make, they believed in the vision and were willing to take that risk.

    My mother always used to say 'everyone is funny about money', and I've learned to respect that. I may choose to do something you think is crazy and vice versa. Does not make either of us right or wrong, we all have the right to choose.

    #116 5 years ago
    Quoted from rosh:

    ... believed we could get to the point where others would than be willing to take the risk (which in this case was getting VCs to invest), but I can tell you there were points in time where we were 'well, if we don't raise money by the end of the month we need to roll up the carpets and call it a day', we took that risk, and fortunately we were able to find VCs who believed in the vision and were willing to open their checkbooks...

    your whole premise breaks down right here... VCs are NOT customers... your customers were taking no risk, nor were you asking them to...

    #117 5 years ago
    Quoted from rosh:

    fortunately we were able to find VCs who believed in the vision and were willing to open their checkbooks.

    The problem with this argument is that VCs trade the risk of the investment for the chance at future profits by being part owners of the company who can share in the success.

    You're asking people to give money, and take the risk of losing it, but without actually giving them anything in return.

    Maybe if Riot Pinball and the other boutiques were selling stock I could see the argument. They're not, they are selling an IOU ticket that has zero legal worth.

    #118 5 years ago
    Quoted from jwilson:

    The problem with this argument is that VCs trade the risk of the investment for the chance at future profits by being part owners of the company who can share in the success.

    Obviously I did not do a good job in making my point. The point was that entrepreneurs will take risks, knowing they will not succeed without others buying into their vision. While, yes typically a VC or others are putting in money in hopes of getting a big return, here we a boutique guys is hoping others will see the vision and take the risk to help see it get made, with their return being getting a machine they want and the feeling that there were a part of something special.

    Quoted from ccotenj:

    your whole premise breaks down right here... VCs are NOT customers... your customers were taking no risk, nor were you asking them to...

    This is not exactly true. We had customers who were in turning building their business on our platform. In those situations, we were always upfront about the fact that we were a start-up. They were willing to risk their business in supporting ours and often investing their money for us to enhance our platform to meet their business needs. So, while not an exact comparison, it is not totally uncommon for a customer to help support a business with their wallet when they believe it will benefit them, even with the risk of that business they are supporting going under.

    #119 5 years ago
    Quoted from rosh:

    The point was that entrepreneurs will take risks, knowing they will not succeed without others buying into their vision.

    I think the difference is that VCs take a risk getting in early to get a much bigger return later, but the early buyers are taking a risk with no (or very little) benefit since they can get the same machine later with zero risk.

    #120 5 years ago
    Quoted from cooked71:

    Will eventually end up Stern, JJP and Spooky all doing contract production for smaller "boutique" guys. Maybe throw Homepin in the mix as well.

    Don't forget Dutch Pinball

    #121 5 years ago
    Quoted from coop:

    bou·tique
    bo͞oˈtēk/

    noun
    1. a small store selling fashionable clothes or accessories.
    2. a business that serves a sophisticated or specialized clientele.

    Ya know, I've been thinking about these definitions of the word boutique, and isn't it same set of sophisticated and specialized clientele that are buying Stern's games?
    th-2.jpeg

    #122 5 years ago

    I think boutique pinball is likely to be around for a long time. Times have changed and it is within more people's capacity to design and/or program a pinball machine. In order to survive you need to have several things executed properly. Obviously you will need a good, cohesive game design (hard- and software). If you don't have that then there is no need to continue (although some are trying).

    The biggest hurdle seems to get manufacturing going. Building your own factory is a beast on its own. Some do not realize that they like designing games, but that doesn't mean you will like running a factory. Spooky is handbuilding every game, which takes time. Due to that they can't do the volume (yet) a company like Stern or JJP need to do in order to keep going. They choose to work like that, which is fine. It works for them and they are the 3rd largest pinball manufacturer in the world.

    What would really help boutique pinball in general is if more parties would collaborate. JJP has their own hardware system, Spooky does, Gerry does, JPop does, Heighway does. Why invent the wheel over and over again? It would be far more interesting if all these boutique companies would be using the same hardware and software to build their games. Or have a choice of 2 available platforms, so there is a little bit of competition going on. It will be easier to fix things, and for parts suppliers it will be easier to stock those parts. Plus you don't have to invent the wheel yourself, which saves a lot of time. P-Roc is a great platform. If Spooky would make Ben's hardware available in a similar way, then I'm very interested to see what will happen. Boutique company A could then simply get a quote from both hardware suppliers for X number of boards for the games they expect to build. Based on that the price of the game may vari. Other parties may get involved and design hardware extensions for improved functionality, which will then be available for everyone. And pinball can evolve.

    The same goes for manufacturing. Why build a factory of your own if someone else already built a factory for the same purpose? Collaborate and get the ball rolling faster. It will save you the time of inventing that wheel again, which as we have seen with JJP and Heighway is no easy task. If boutique pinball companies can collaborate on things like this, I think they may actually become larger (and sell more games) than they can do on their own.

    #123 5 years ago
    Quoted from aztarac:

    After awhile just about every thread on Pinside devolves (or maybe evolves) to bewbs....
    Not complainin', just sayin'!!

    It's either closed with insane fighting by the end, or boobs. I'm good with the latter for every pinside thread. It's like going for a massage and they finish with that nice very light tickle to let you know they are done

    #124 5 years ago

    Spooky has done a great job. But hope they up their game. Not with quality, code, support but the game itself.

    More toys and mechanics. Amh is a bit basic. And maybe some more risc in the art.

    Think when they do that, they will sell better too, which makes survival chances better. Make the pin look like its made in 2015 and i think they have a fantastic future.

    2 weeks later
    #125 5 years ago
    Quoted from kaneda:

    How did Spooky succeed where others have failed?

    Recipe for pinball success:

    Have fun.
    Have passion on the edge of what's possible and/or rational.
    Charlie, Ben and KT are smart (not necessarily in that order).
    Reasonable production, delivery, price point and expectation setting.
    Great communication. Keep gap of expectations v. reality as small as possible.
    No pre-order $, only pressure is self-inflicted.
    Keep coder close to production, theme, PF layout, voice & sound, gameplay, electronics and mechs) i.e. Ben Heck
    Buy parts of known quantity, quality and on-time delivery. (Terry @ PinballLife!!)
    Reduce specialty parts vendors. Near zero risk.
    Higher end speakers (Flipper Fidelity).
    Make a lot yourself, especially custom stuff (Heck boards, 3d parts, cabinets, playfields, artwork)
    Keep build simple. (look under the PF and behind BG - clean build, wiring, mechs).
    Unlicensed (no upfront $ needed for licensing, removes licensing cost)
    They did the voices and script for fun, with friends and few (any?) $ for outside talent.
    Pass on savings (they didn't keep for profit - saved on unlicensed, fewer vendors/middle men, DIY voice/sounds)
    Charlie rented the "factory" location. 2-3 games/week doesn't require a "production line".
    Minions.
    Nobody sleeps.

    Dan G (full disclosure - AMH owner, and 25 game collection)

    #126 5 years ago
    Quoted from SpookyCharlie:

    Wow... that might have been the nicest thing Bryan Kelly has ever said to anyone. Thanks BK!
    He's not wrong. We couldn't do this anywhere else and make it work, nor would I want to. For the record, our doors are always open... we are a real shop and the tour takes about 3 minutes. 244 Ridge Ave. in beautiful Benton, WI. Lawrence's Pub on main has Spotted Cow on tap, an AMH, and the best burgers & pizza in Wisconsin... what more does a village need for a good time?

    Wow, Charlie - I think I just decided I'll come pick up my game in person.
    Dan G

    #127 5 years ago
    Quoted from Bryan_Kelly:

    I go to Benton for one reason and one reason only. The burgers and Spotted Cow on tap at Lawrence's. If I run into Charlie, it's a bonus.

    Um, that's two reasons, beer and burgers. and I'm sure its no "beautiful Farmington Minnesota"

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