(Topic ID: 304134)

I am sorry, but this is getting out of hand........

By vdojaq

2 years ago


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  • Latest reply 2 years ago by metallik
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    #77 2 years ago
    Quoted from flynnibus:

    Coin drop doesn't have to pay for a piece of equipment's cost... It only has to pay for its deprecation and cost to operate. So high game costs means little as long as resale values are as strong as they are. What matters is the opportunity cost of the money/space, it's residual value, and how how much it earns.
    It's an easy decision to put an 8k premium on the floor vs a 2k 20yr old game when the 8k game will earn more, and in today's market not likely lose any value vs what you paid for it.

    Coin drop better be enough to pay for the cost of the NEXT piece of equipment and make money on top of that. That pin I bought several years ago might bring about what I paid for it, or a little less. Guess what? That new pin is now significantly more money and if your price per play is the same it will take longer to make up that additional cost all other things being equal. At some point, price per play comes under pressure and that is certainly the case now.

    Because I am a pinball enthusiast, I will occasionally place a Stern Premium or a JJP LE game on location. IME, these Premium Sterns or JJP LE games don't earn any more money than a typical Stern Pro, plus more stuff breaks on them leading to more service calls and downtime. Oddly enough, there have even been instances where I have seen the Pro earn better than the Premium/LE version.

    #89 2 years ago
    Quoted from flynnibus:

    Your next game is paid for with investments, profits, and the sale of outgoing equipment. If you aim for your coin-drop to pay outright for your game and pay for the next game you'll never buy new equipment. Capital, not coin drop, buys equipment. You aim to have enough revenue to make your capital investment generate a return you are happy with.
    Some people hold equipment forever and wait for break-even. If that is your model then yes, higher unit costs would crush you. But unless you are a big multi-level route, you're better off to sell equipment and replace it with a better earner rather than wait out break-even.

    Yes, I use money from game sales for new games, as well as coin drop. Probably didn't word that well enough up front, just trying to point out that its the cost of the next piece of equipment that needs to be considered. When that cost goes up, it place more pressure on revenues.

    I sell equipment that doesn't earn well enough to keep its spot on the floor, and don't even consider if it has reached break even or not. If it isn't earning then out the door it goes. Could be six months, nine months, a year, three years, whatever. Higher residual values help, but they are really not much higher for me now than several years ago. Everything I sell off the floor is plug and play. Other than a few stinkers, most of the games residual values have held up well for my business in the last 11 years of routing games. Unfortunately, equipment costs, and other costs, are rising and revenues need to keep pace.

    3 weeks later
    #132 2 years ago

    Another outrageous ask price...it always has me shaking my head when I see a beautiful restore job with poorly aligned flippers. Screw the gameplay, just make sure it shines.

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