No one wants to pay more, obviously. Can we please move past the grousing about it?

-Stern's 15k Batman 66 SLE is obviously a pricing experiment: They intend to learn how much demand there is for a much-higher priced game. They're not doing it to make money. 30 SLE games times an extra $6,000 per game is only $180,000. For a manufacturer of their size that's not enough to make a difference. But gathering data on how many people are willing to enter a contest just to be able to buy it is very valuable.

-JJP's Limited Edition Dialed In! really is limited: The $9,000 price is only good until the end of the year, after which the price is $12,500. So pay a deposit now and the game is theoretically worth more after December 31. At 9k the price is comparable to their other offerings, yet offers more. The theme is irrelevant to this discussion. For JJP, the pricing experiment is to see how many will commit to a deposit before the year is over. After that, they find out how many still want it at 12.5k.

Remember that companies can always lower prices--that's easy. The hard part is finding the pricing ceiling, which is what both companies are doing right now. The fact that they feel able to explore this tells us the market is strong. That's great news!

My mistake then, but the logic remains essentially the same: Anchor the high end at 12.5k. They may not expect anyone to buy it.

Prices will go down if they're not sustainable. The rising prices suggest the market is getting bigger (more people interested).

I'd call it "finding the pricing ceiling". They'll make their profit on the 9k version. The SLE is just an experiment.

Companies are obligated to find the most profitable price for their products, especially if they're small. Otherwise they don't survive.

I wouldn't argue, for the most part. We can assume the producers view the market as cyclical and the present market situation to be temporary. It makes sense to establish themselves at the high end with increasing competition for the low end. And if the market contracts, they can always adjust down. In the meantime they need to generate profit for future development.

No, I acknowledge it's frustrating for those of us already in the market. But the manufacturers must view their market as expanding enough to support the changes.

Exactly. The contest is not about the money they make from the SLE. It's about marketing and research.

Where do you get 80 games? Last I knew it was 30.

In any case, the SLE is only worth 6k each since the buyers would buy the LE if it wasn't there.

I'm talking about the whole market, not just JJP. I have no argument with their business model, and competition is good.

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

They do have development costs. But expanding the number just proves they're testing the market.

I'd suggest that the per game cost does need to go up for pinball to be sustainable.

Also, other non-pinball location games commonly cost $15k and up. The prices going up suggests the market is moving to support it.

Not broken, but fundamentally changing. That's why so many are uncomfortable.

I'm willing to concede they're making money on the SLE at the new limit. But the original run of 30 was pure experiment, which apparently was successful.

The future of pinball may be a lot more people playing just a few games. The agony over pricing is mostly about home collectors not being able to afford NIB, which I understand.

This is an emotional response, which I can sympathize with.

Business is hard, especially in the present environment. Companies need to take profit if they can. If it's not sustainable, it will change.

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.

My point is the manufacturers feel confident in exploring the market. That's good. We'll find out if you're right, and the prices will contract. It would be better for the market if that didn't happen.

Ops need to find a way to turn pinball apples into non-pinball oranges, price-wise. The market is changing, and the old thinking needs to change too.

Definitely not emotional, then.

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

The numbers don't change the reasoning.

I'd challenge the thinking that pinball needs to go in the same places that have pool tables and coin pushers. The future economic model may not even be about pay per play.

I still say people are thinking too small. The market and industry are changing. That's a good thing. Everyone wants the old business models to keep working--and that's understandable--but they don't, or at least not well enough. The industry needs big changes to move forward.

Every time someone throws out the "greed" accusation it feels ugly. None of us knows what the books look like inside these companies. And companies need cash to survive and grow.

Overpriced compared to what?

Time will tell if this is true. We don't know yet, but it's far from conclusive that you're correct.

There's that unfounded accusation again. Unless you have special knowledge of their finances it's just an ugly opinion.

Smaller companies are always hungrier and willing to give away more for less profit. The manufacturers are seeking points of differentiation, including pricing. There's nothing wrong with that. If it doesn't work, they'll change.

I agree with you. Where we disagree, I think, is in your assumption that the cost to manufacture should dictate the sale price.

I don't expect you know what the payments on Stern's new facility are, for example. Or what the terms of JJP's investors are. Those are two big unknowns that deflate the whole greed argument. As a passionate pinball hobbyist I'm confident you want them to survive and make more machines. What if this is the cost of that survival?

There are other points about this cost of production argument, but it's the greed thing that doesn't make sense to me.

Assigning price is all about the present market, not what was done in the past.

I'd suggest pins were underpriced 8 years ago. If you bought a house 8 years ago and it was worth more now, I imagine you'd sell it for what it was worth today not what you thought it was worth 8 years ago.

I understand the frustration everyone feels about increasing prices, but I'm talking about where the market is at right now.

People keep talking like the manufacturers can never lower prices once they've announced higher prices. If the market can't bear the increase, the prices will go down. The companies are doing nothing wrong by experimenting with price.

The whole thesis of this thread is that the manufacturers feel confident enough to experiment with pricing. That's good news for the industry in general.

Everyone's assuming they represent the majority. It might not be true.

You might be right about the first part, but I want people to think deeper about the market and would prefer they weren't mad. I don't think being mad is helpful.

Sure, but it's not ridiculous to talk about how market value works.

This is a thoughtful point. I'm not sure I can see it working that way though. The fact that people are so emotionally invested here suggests they can be pulled back.

I meant the potential buyers here are so invested in the products that they can still be won back by lower prices later.

I suspect redemption arcades are the wrong market for pinball, hence the poor performance.

Market conditions were very different then. I'd suggest there was low demand and the market was oversaturated. Not sure that applies today.

Maybe there are more new collectors than we realize. That would be great news. No need for it to derail.

We definitely need at least two major manufacturers, agreed. I expect some of the smaller ones won't make it long term, but time will tell. Lots of positive things are happening in that space.

Arcades in general are child-oriented. You don't have to be a child to go to one, but as a market they're perceived as a place for kids. I don't believe the future of pinball lies in arcades as we've known them.

In barcades pinball seems to be used as a loss-leader to sell alcohol. That's fairly innovative, and a more targeted on-market placement for pinball.

So far the market is following a normal trend: The industry leaders are finding the price ceiling. It will stabilize or adjust down as the market changes.

The option exists, it's just not popular. My impression is it doesn't add enough draw to make a difference in a redemption arcade. Those that have tried it are welcome to correct me.

Exactly right. It would be reasonable for D&B to try pinball, but Chuck e Cheese would be mistaken to do so. Wrong market.

Stern spends a lot of time and attention on the themes they select. What they do tells you who they think their market is. It's not kids.

The cost of production doesn't dictate the market value.

Pinside collectors all assume they represent the majority of the market. They probably don't.

There are plenty of small manufacturers already making their best attempts. They'd be wise to charge what they can at the production numbers they can manage.

The startup costs for manufacturing are too high for this to be an attractive market for very many players. This probably can't happen until a Chinese-American or European with dual-citizenship and great business acumen decides to establish a pinball company in China.

I agree, emotion is part of how markets work.

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

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

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?

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.

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.

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.

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.

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.

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.

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).

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.

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.

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.

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.

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.

Completely agreed. But I do think the emotions surrounding NIB pricing is clouding the thinking about what it means for the market. Personally, I want to talk about whether the market is growing or shrinking. Why does everyone seem to think it's shrinking?

For the record, I personally do not think there is any future in location pinball AS IT HAS BEEN IN THE PAST. Pinball is never going to start making sense in redemption or video arcades. That era is over. A lot of folks seem to hope it's going to come back that way; I don't believe it can.

See my earlier post about how many pinball machines are left in the world. We're making new people a lot faster than new machines.

I think you need to explain why the pinball market is obsolete for that to make sense.

I like your comment a lot, and agree pretty much 100%. I think demand is up and they can't increase production much more, so we're getting higher prices. Long term I expect it to change. At the current price point more manufacturers can succeed on the low end, so competition and some downward adjustment is inevitable.

This is only true long-term if the market size is fixed or shrinking. How do we know it is?

This isn't what I said. I said the population is increasing and so is awareness. That makes a reasonable case for increased demand, and that does in fact explain the price increases if the supply can't increase in the short term.

If you can make a case for the market getting smaller, please do so.

I don't find anything compelling in this argument. It might be a bubble, but all I see is people declaring that it's a bubble because they say so. Where's the case for it being a bubble? To decide if it is a bubble, we need to isolate what the market looks like. That's all I want to do.

It's not flawed just because you say it is. You have to make a case.

I agree that pinball is generally marketed to older people with higher incomes right now.

You're over-generalizing what I'm trying to say: Higher prices right now reflect increased demand, which overall is good. I acknowledge openly that 10k plus for a machine sucks as a buyer and changes the market.

I agree with your post. I'm not saying I'm completely right, and everyone else is wrong, but I am saying there's as much evidence of increased demand as there is for a bubble or profiteering. No one's made a really compelling case either way (including me). I like that comments like yours are getting more thoughtful about it.

I guess it's just received wisdom that the manufacturers are artificially limiting production. No evidence needed.

I'd love to know how so many people are absolutely certain of something for which they have no facts. Did the manufacturers start publishing production numbers while I wasn't looking?

You're talking about the LE/SLE/super-whatever model, which I agree is an artificial limit to differentiate their product. That's normal business practice, which you'd find in a lot of other industries as well (such as consumer electronics, appliances, etc). For example, it's common practice for manufacturers to create a "super deluxe" version of their product at a crazy high price. They don't expect anyone to buy it. It's purpose is to establish the price range, so their normal-priced products appear more like a bargain. This is called anchoring (look it up!). The practice is unusually visible in this industry, and that's the only difference.

When I say we don't know what the production numbers look like, I mean we don't know how many total pins are going out the door, or whether the numbers are going up or down. That's a fact. I welcome being corrected.

This is not evidence of a shrinking market. This is evidence of the decline of location gaming, which is real and not controversial.

How do you know there aren't more people buying pins for in-home use?

They aren't the same people. Its hard to visualize, I know, but you can't gauge the size of the market by how people respond to pinball in public.

If "being smart" with money means investing for financial returns, I guess I'm not sure why anyone would buy pinball at all.

Smaller producers will fill the gap for less expensive machines.

Maybe this is heresy, but I think Stern is the manufacturer most at risk in the new competitive landscape. They're getting squeezed between JJP--which produces actual higher end machines with more features--and the boutique producers. Plus they just invested in a big new facility, which can't be cheap to pay off.

See, it's this position that doesn't make sense to me.

JJP is actually producing high end machines, but at relatively small volume. Stern seems to be producing better but less advanced machines but charging just as much, and at high(er) volume.

JJP is in a strong position in the market. Stern is the one with market share to lose, and they're getting hit from both the low and high end of the market simultaneously.

Blaming JJP for what you don't like about the state of the market is just bewildering.

I was there when JJP started and own a WOZ.

From your description it sure sounds like Stern is who you should be mad at, if being mad at anyone makes sense.

I started this thread hoping to have a good discussion about the market. I sincerely did not want a "debate", or to upset anyone.

I'm realizing now that Pinside is a poor forum for this kind of discussion. I take full responsibility--I usually don't participate in the forums and didn't realize what I was getting into.

Best wishes to all.

You said it.

Yeah, I came to the same conclusion. The title created a magnet for people's anger about the subject. Ironically some of the better comments have appeared in the "terrible" thread.

Lesson learned.

In hindsight I really should have known that money is too closely bound to people's passions to be discussed rationally in a public forum. Pinside is already famous for the price police, after all.

And I probably could've done a better job with the title and how I introduced the subject. The timing was wrong too: Better to wait for people to cool down after Expo.

But, I have the same weakness as everyone else: I tend to think other people work the way I do.