(Topic ID: 171125)

Increasing Prices: Good for Pinball


By brundaged

3 years ago



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There are 294 posts in this topic. You are on page 4 of 6.
#151 3 years ago
Quoted from dsmoke1986:

The market is ripe for a company that can make nice NIB pins for under 5k...Someone needs to attempt it, as that's where the sweet spot is...Maybe from the ashes of these mistakes, another manufacturer will arise.

Spooky and highway are pretty damn close to those price points.

#152 3 years ago

At 5k, the margin is just too low to allow the manufacturer to succeed. A small, family run company can probably get by on 5k, but it is unlikely they will have A titles - at least with any scale or consistency.

#153 3 years ago

I mentioned this before, but pinball machines have been under priced for the longest time.

Pinball companies are no longer relying on struggling operators to buy their machines. Over the last decade or two there has been an influx of wealthy people buying these basically as toys without a care in the world. And require special themes to appease them.

Also the designers and makers are all getting up there in years and need to start thinking about how they can afford retirement. And what better way than from the people that keep on buying no matter what. I say roll with it...

#154 3 years ago
Quoted from ForceFlow:

So, for operators, prices like these are completely bonkers. For home owners, even more so. What market is Stern & JJP shooting for if it's not operators and not average collectors?

I figure it this way. With Ghostbusters they clearly had problems meeting demand as it took forever for people to get their games. Likewise people were flipping them for higher money when they did get them. So why not just sell half as many games at double the price? Clearly there are enough people with disposable income around the world to support that price model. It may not be us, it may not be operators and it may not be average collectors anymore either. Things change, and maybe it makes more sense for them to sell less product but target high end buyers.

#155 3 years ago
Quoted from Reality_Studio:

So why not just sell half as many games at double the price?

Funny.... I said the exact same thing in another thread.

#156 3 years ago

Fewer games sold for higher prices gives them a higher profit margin and leaves fewer games for resale in the used market later on. It seems like manufacturers want to reduce the number of games in the used market so their new games don't have to compete with their old games.

#157 3 years ago

At least JJP and Stern actually make and deliver pinball machines! They may start commanding a premium for performance. Even though they are charging a lot, it's better to pay for something that you know you are going to get rather than getting duped...then you are definitely overpaying.

At the end of the day it will be supply and demand that will dictate if this type of pricing will hold. It's great to have increased value for your machine, but it still needs to be affordable for all pinball hobbyists or else it becomes an elitest club and what's the fun of that?!

#158 3 years ago
Quoted from brundaged:

Definitely not emotional, then.
I get it, but that's not what this thread is about.

Why shouldn't this be emotional -- isn't this why we buy pinballs in the first place? Isn't this why we're spending late nights debating pinballs on pinside?

You're treating this so god-damned rationally (or so you think anyway) like it's just another manufactured item, and it's just business as usual.

What your logic doesn't encompass is that it's personal to me and based on last few weeks' reactions it's personal to a whole load of people. Logic needn't apply here.

#159 3 years ago
Quoted from pinballOsp:

Why shouldn't this be emotional -- isn't this why we buy pinballs in the first place? Isn't this why we're spending late nights debating pinballs on pinside?
You're treating this so god-damned rationally (or so you think anyway) like it's just another manufactured item, and it's just business as usual.
What your logic doesn't encompass is that it's personal to me and based on last few weeks' reactions it's personal to a whole load of people. Logic needn't apply here.

OK, pinball is personal to you BUT for many of us it is just another manufactured item.... why is that wrong?? The reality is that even the most passionate manufacturer can only stay in business as long as a profit can be made, getting emotional doesn't put money in the bank. I get the concept that increased prices show that Stern and JJP think the market is there for higher prices and it is a sign of growth even while it is bad for buyers (especially those on a budget).

I buy machines because I like the ability to play at home and playing my machines is relaxing and fun. Tinkering to keep them running can be challenging and rewarding (occasionally frustrating ) but to get emotional over them ... not going to happen (well other than the occasional cursing fit over a bad drain )
I'm lucky in that I can generally afford to buy any machine I want but I have a self imposed limit of what I am willing to pay. Based on the current pricing I won't be buying any newer prem or LE for quite some time but it doesn't make me angry or frustrated because the amount of $$$ I spend isn't directly proportional to my enjoyment. My $600 Aztec is as fun as my AC/DC prem worth 10x more. I'm not going to sit up nights worrying about the state of the hobby because that ruins the fun. I'm living in the moment and there will be plenty of older machines to buy and play for years to come.

#160 3 years ago

It's not uncommon for one to criticize what they want but can't afford.

#161 3 years ago

And the fault of these prices is from the people that buy at these prices. Just say no to a 15k pin. It's absurd!!

#162 3 years ago
Quoted from Walt:

It's not uncommon for one to criticize what they want but can't afford.

But obviously there is still a demand in the market that is going unfulfilled.

#163 3 years ago
Quoted from pinballOsp:

Why shouldn't this be emotional -- isn't this why we buy pinballs in the first place? Isn't this why we're spending late nights debating pinballs on pinside?

I agree, emotion is part of how markets work.

There seem to be plenty of threads available for discussing the emotional side of it.

#164 3 years ago
Quoted from hassanchop:

And the fault of these prices is from the people that buy at these prices. Just say no to a 15k pin. It's absurd!!

It seems unhelpful to get upset about how markets work. The markets won't change.

#165 3 years ago
Quoted from JonH123:

Fewer games sold for higher prices gives them a higher profit margin and leaves fewer games for resale in the used market later on.

True. But the question remains:. Is the market for pinball getting bigger as more people gain interest? That would be ideal. How do we find out?

#166 3 years ago
Quoted from Reality_Studio:

So why not just sell half as many games at double the price?

Killing your economies of scale -> increasing your costs
Shrinking the market -> less demand for parts -> less suppliers, lower volumes -> higher costs
Shrinking the market -> less exposure -> harder to market -> higher costs
Increasing the per unit cost dramatically -> increases friction to selling -> higher risk of an order not closing -> More volatile sales, more risk

Sounds like an easy out.. but it can hurt you in the long run. A successful company needs a healthy ecosystem of suppliers AND buyers... and a product/price combo that will convert your addressable market into actual sales.

The harder your per transaction sale is... or the less number of buyers you have... the more risky your sales outlook becomes. Hit big, but you miss as big too.

#167 3 years ago

This reminds me of Mark Cuban's view of the NFL...

Mark Cuban, owner of the Dallas Mavericks was recently quoted by ESPN -"I think the NFL is 10 years away from an implosion." "I'm just telling you: Pigs get fat, hogs get slaughtered. ."

"Just watch. Pigs get fat, hogs get slaughtered. When you try to take it too far, people turn the other way. I'm just telling you, when you've got a good thing and you get greedy, it always, always, always, always, always turns on you. That's rule No. 1 of business."

#168 3 years ago
Quoted from MinusWorlds:

Batman '66 is most certainly a cash grab.

They are all cash grabs, BM66 is a good idea and it worked. I wish it was a theme I was into but I would rather every 4th or 5th pin Stern makes is in this vain, something out of the box because most of their themes suck, Blade Runner SLE? SW original trilogy SLE? Star Trek VE/SLE based on the OG series? I'm in but I have zero interest in the new SW's didn't care for it and Aerosmith is simply crap. JMO

#169 3 years ago
Quoted from brundaged:

It seems unhelpful to get upset about how markets work. The markets won't change.

I get upset because my beloved hobby is turning into an elite hobby. Something for the rich.
My last NIB pin was 5.5k but I can't afford a 9k NIB pin. So this means I'm out of the elite and will be stuck with "older" pins. Yeah this is a pretty good reason to get upset about.

My other hobby is surfing. A NIB surfboard goes from 300€ to 500€ since I started surfing, which was 20 years ago. If for some reason these prices would start to go up and get to the point where a surfboard was 3k I would have to stick to an old board forever. That would make me very upset...

#170 3 years ago
Quoted from flynnibus:

The harder your per transaction sale is... or the less number of buyers you have... the more risky your sales

All true, but how do we know the market is shrinking? They may be tapping into a previously underserved high end market.

Or, there might be a lot of first-time buyers that are invisible to Pinside. I know plenty of people that think pinball is cool but would never sign up on a website to talk about it.

#171 3 years ago
Quoted from hassanchop:

I get upset because my beloved hobby is turning into an elite hobby. Something for the rich.

True, if the hobby for you is only about NIB. Personally I enjoy the older pins as much or more.

It's far from certain yet that this is where the market will stay. But if it does, there should be room for everyone in the used market for a long time to come.

#172 3 years ago
Quoted from pinballOsp:

You're treating this so god-damned rationally (or so you think anyway) like it's just another manufactured item, and it's just business as usual.
What your logic doesn't encompass is that it's personal to me and based on last few weeks' reactions it's personal to a whole load of people. Logic needn't apply here.

I love this exchange because I did in fact try to emulate Spock when I was young, and you sound so much like Dr. McCoy here.

#173 3 years ago
Quoted from brundaged:

All true, but how do we know the market is shrinking? They may be tapping into a previously underserved high end market.

And what about higher prices (alone) expands the market? They haven't done anything different, just raised prices 30+%. The channels, the marketing, the exposure... all the same.

The only thing that has happened has been raising ASPs while thinning their buyers.

-1
#174 3 years ago
Quoted from flynnibus:

And what about higher prices (alone) expands the market? They haven't done anything different, just raised prices 30+%. The channels, the marketing, the exposure... all the same.
The only thing that has happened has been raising ASPs while thinning their buyers.

You may be right, but we don't know. Pricing is funny, especially with luxury goods. With luxury goods you can, in fact create a new market by charging more.

#175 3 years ago
Quoted from brundaged:

You may be right, but we don't know. Pricing is funny, especially with luxury goods. With luxury goods you can, in fact create a new market by charging more.

Creating a new market would mean reaching buyers they weren't previously. The current products were already 'luxury' vs the prior models. What you outline is what JJP did.. but he did it by changing the product, changing distribution, and changing the marketing. Again, all we've gotten recently is 'more of the same' with boosted prices... no significant change in product or sales.

#176 3 years ago

I think that if a manufacturer is going to ask 10-15k for a machine, then the pin has to be over the top loaded (which they're not). The pins haven't made any crazy technological advances in the last 20 years, but the pricing recently has. A "SLE" model needs to justify a stupid ridiculous price of 15K (robotics, lasers, crap literally blowing out of the back box). Frankly, I think it's rather insulting to take advantage of the collector the way they did. It shows that limit the quantity and people will pay anything for a basic sub par pin.

The pinball manufacturers are doing a test of what the public will tolerate. It's obvious that it worked for the BM66 title, so in turn JJP raised his pricing to do hid own "cash grab".

Time will get the best of the industry, and if things don't fall into place (5.5-8k NIB) in the next few titles, things will slow dramatically. There's only so many collectors/OP's and so much space.

#177 3 years ago
Quoted from flynnibus:

Creating a new market would mean reaching buyers they weren't previously. ...

Not all the time the buyers were obviously there but now they have created excitement with exclusivity the LE, SLE, USLE, USLEHDTV, or whatever. That will draw in buyers, are they new to pinball or the same group re-energized? I can't tell you for sure but a lot of people associate price with quality and a high price can give the illusion that the quality of a product is high (yeah I know about the issues Stern is having ... this is a discussion of economic principles).
The idea of exclusivity, that only a few people can afford the product, will make it more attractive to a specific group of people ... we are seeing it in action already.

#178 3 years ago
Quoted from brundaged:

Look at the smaller manufacturers out there, and the lower-cost options. Heighway's swappable system, for example. That's the new low end.

Don't forget Spooky. The Domino's machine is priced at $5200. That's a bargain. Its not as feature rich as the new JJP machine, but its a fun good looking machine and packed with value at that price.

10
#179 3 years ago
Quoted from Astropin:

I had cash in hand and was looking for a new game....then they jacked the prices even more. I was so frustrated with the whole pinball market that I took my "hobby" money and bought a pair of Jet Ski's. There's cash Stern and JJP potentially lost and it doesn't look like they will get any of my future cash either (at least not directly).

I think Astropin makes an important point. None of us are "wed" to pinball. At some price we will substitute another activity that provides more fun per dollar spent, in his case Jet Skis. I don't think anyone is doing the calculation of fun per dollar, but I know that I would prefer to take the family on a big vacation rather than drop $9k+ on a pinball machine. It is just a matter of substitution and preference.

The higher the price of pinball machines, the more likely that manufacturers are getting closer to the point that individual customers will prefer and substitute another item in its stead. Once people discover their preference for something else, it can be difficult to win them back.

#180 3 years ago

Tapping unto a high end market would be a valid strategy, but these aren't high end machines. The price is high(est) end, but Batman '66 is pretty sparse. It has less features than Stern's previous release, and it's built with the same process. We're not talking a Time vs. a Rolex. We're taking two Timex watches, one just priced as a Rolex.

#181 3 years ago

For some luxury buyers, an exclusive price is exactly what tells them it's for them. The product doesn't need to be any better, it just needs to FEEL better.

#182 3 years ago
Quoted from brundaged:

there should be room for everyone in the used market for a long time to come

The problem is that as the nib prices rise, the used market rises as well. You can't buy an AFM for less than 3 times it's nib price.

How is this good for pinball? It's good for whoever deals with pins, buys and sells for profit. And it's good for the manufacturers also as they keep pushing their prices up so the profit must be going up (I guess lol).
This is definitely not good for someone like me that only likes to play pinball... I guess I will surf more and play less in the future, but this makes me angry and sad to see where my hobby is going.

#183 3 years ago
Quoted from brundaged:

For some luxury buyers, an exclusive price is exactly what tells them it's for them. The product doesn't need to be any better, it just needs to FEEL better.

Maybe they should see a therapist.

#184 3 years ago
Quoted from hassanchop:

How is this good for pinball?

Its good if higher price means the demand has gone up. More people interested in pinball is always good.

I think the market is expanding. There are a lot of people here that seem to think it's shrinking. The despair about prices only makes sense if they are correct and the total market is contracting.

#185 3 years ago
Quoted from brundaged:

Its good if higher price means the demand has gone up. More people interested in pinball is always good.

I'm not an economy specialist but I always heard these kind of stuff in college:

demand goes up ---> prices fall down
-> If the demand goes up that means the production needs to go up and that means less production costs and more profit. Therefore the price must go down unless you are a bastard of a company.... which is what Stern is showing us.

production goes up ---> prices fall down
-> Again if you produce more you lower your price and still manage to increase the profit because of the production costs, etc.

What I see in the market is both demand and production are going up very fast. But the damn prices keep going up.
I don't see where this is good for pinball in general.

Companies like Ferrari keep their production units low so they can keep the product more exclusive and therefore more pricey. You see this happen with the LEs. But keeping the non LEs at this price rise will make the market explode someday, and then you will see a drastic price drop. And the ones that will suffer more with that are the ones that are buying at these ridiculous prices.

#186 3 years ago

Yep I am out.
Having problems selling my Tron at 5500 how do they have a market for $12,000?

Greed will kill this hobby....

#187 3 years ago
Quoted from hassanchop:

I'm not an economy specialist but I always heard these kind of stuff in college:
demand goes up ---> prices fall down
production goes up ---> prices fall down

That's really only true in the long term, and only in markets for commodities (things that everyone needs and there are lots of options).

#188 3 years ago
Quoted from VacFink:

Don't forget Spooky. The Domino's machine is priced at $5200. That's a bargain. Its not as feature rich as the new JJP machine, but its a fun good looking machine and packed with value at that price.

With each new release from Stern and JJP that Domino's just gets cheaper and cheaper.

#189 3 years ago
Quoted from brundaged:

That's really only true in the long term, and only in markets for commodities (things that everyone needs and there are lots of options).

We really need an economy specialist here
I would love to know more about this pin market phenomenon

#190 3 years ago

Glad I was into collecting pinballs since the early 90s. I have never been a NIB guy, but these price increases have changed the secondary market as well. What I miss is buying project games off of location. Buying a 2 year old broken pin for $1,000 that was $3,500 new and putting a few hundred dollars in parts to make it a very nice $2,000 value machine was common just a few years ago. This doesn't happen anymore because operators are done with pinballs for the most part in my area because of price and return on investment. With the latest price bumps, this is only going to get worse.

The hobby and the people that own pinball machines has changed. The latest pinball enthusiasts seem to really enjoy getting NIB and selling/trading for the "next game". The price of entry into this new space is unfortunately to high for me, but it appears that the hobby will survive without those like me as people are buying these big dollar games.

#191 3 years ago

"All good" this hobby will die without people like you IMHO.

Or tech savvy pinball people will make a killing fixing games that the new collector cannot.

Sad to lose a loved hobby

So who is in the market to buy.....

#192 3 years ago

So here are some interesting statistics:

According to IPDB, about 1.1 million pinball machines have been produced since 1980. I don't think that includes Stern's numbers, since they don't publish any. A lot of machines are long gone, but let's be generous and say Stern has made up the difference and there are still a million Solid State machines in circulation.

According to Pew Research, about 16% of the world's 7 billion population is upper-middle or upper-income. These would be the target market for luxury goods such as collectible pinball machines. That's over a billion people.

So there's roughly one solid-state pinball machine per 1,000 people worldwide in the target collector market. That looks like a deficit to me. I think the price increases are pure supply-and-demand: Demand is going up and suppliers can't produce more yet.

#193 3 years ago
Quoted from brundaged:

According to Pew Research, about 16% of the world's 7 billion population is upper-middle or upper-income. These would be the target market for luxury goods such as collectible pinball machines. That's over a billion people.

One major flaw in your numbers, however, is you assume that all 1 billion people are interested in pinball. I suspect less than 1% of this group has any interest in the hobby.

#194 3 years ago
Quoted from mittens:

One major flaw in your numbers, however, is you assume that all 1 billion people are interested in pinball. I suspect less than 1% of this group has any interest in the hobby.

Of course. I'm not representing this as a perfect picture. I'd say the market for just one machine (not a "collector") is probably bigger. Also, the market for NIB is vastly bigger, since casual purchasers want NIB with a known business that provides support.

I'm not assuming all one billion are going to buy a pin. But markets are evaluated in terms of potential buyers. I'm sure Stern has run similar numbers, broken down by race, gender, geography, and income levels.

Even assuming 0.5% of a billion are interested, that leaves 1 (old) pinball machine for every 5 that are interested. That's a big market.

#195 3 years ago

Well lets explore this in a little more detail. Please correct me if you think I am wrong anywhere

10000000 - People interested in pinball (1 percent or 10 million of your initial 1 billion number)
100000 - But only another 1 percent have a wife that lets them buy a pinball machine!
20000 - Of this group, only 20% have room for another machine!
2000 - Of people with space, only 1 percent (2000 people) are new to the hobby altogether and have not seen the horrendous price increases over the last 10 years. This is the target group that thinks 12K+ USD for a pinball machine is the norm.

#196 3 years ago
Quoted from mittens:

Well lets explore this in a little more detail. Please correct me if you think I am wrong anywhere
10000000 - People interested in pinball (1 percent or 10 million of your initial 1 billion number)
100000 - But only another 1 percent have a wife that lets them buy a pinball machine!
20000 - Of this group, only 20% have room for another machine!
2000 - Of people with space, only 1 percent (2000 people) are new to the hobby altogether and have not seen the horrendous price increases over the last 10 years. This is the target group that thinks 12K+ USD for a pinball machine is the norm.

Nah, once we start guessing at numbers we can come to any conclusion we want. But it seems pretty clear there's a large potential market. It wouldn't take much increase in pinball awareness to create a substantial uptick in the market.

Aren't we seeing more pinball references in pop culture the last few years? Sure seems like it.

#197 3 years ago
Quoted from brundaged:

This is my point. There's still a market despite this thinking, so either the market is bigger or the thinking is wrong. Manufacturers will adjust back down if it doesn't work.

Still a market?

Way to early to say this. These aren't one and done products.... theses companies have to repeatedly sell to that same niche market.

#198 3 years ago
Quoted from 27dnast:

Still a market?
Way to early to say this. These aren't one and done products.... theses companies have to repeatedly sell to that same niche market.

This is the opposite of what I think is happening.

If you're right, then the market is dying and pricing won't save it one way or the other.

Personally I believe it's growing.

#199 3 years ago

The interest in pinball is 20% of what it was in 2004. Easily provable by google trends. Now before you say "well that doesn't prove anything, maybe everything is down" also search ping pong and put that side by side, pretty easy to see that pinball had double the interest of ping pong in 2004 and now ping pong is like 50% more popular.

#200 3 years ago
Quoted from taylor34:

The interest in pinball is 20% of what it was in 2004. Easily provable by google trends.

I agree, that's interesting. I like the hard data. I don't know what it means.

It doesn't explain the proliferation of new manufacturers, though. Or Stern's investment in a larger production facility, for example.

A couple of thoughts:

- the trend for "pinball" is up from a year ago

- I'm not sure how correlated keyword searches is with luxury purchases. "Rolex" for example is also down sharply.

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