Is It Possible to have a Profitable Pinball Company outside America?


By HighProtein

2 months ago


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  • Latest reply 1 month ago by Jesterfunhouse
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    #1 76 days ago

    Is It Possible to have a Profitable New Pinball Company outside America?

    Seriously, after Heighway pinball, Dutch Pinball and the prospective companies
    that don't even care about selling to the U.S. market (L O F'N L!),
    is there really a chance in hell of any pinball company outside of America
    to ever make a profitable business structure (let alone a game that comes out
    on time, works out of the box, etc... etc... etc...).
    I'm not trolling or bashing but come on!
    It's challenging enough for Stern, JJP and Spooky to develop, make and sell
    and distribute games in a nation with an overall very good highway system to ship games.

    Side questions...
    Why would at this point any new company try to make games in a foreign country.
    What would it take for any of these foreign pinball companies to turn things around?

    P.S...
    Derail with funny memes, etc... lol

    #2 76 days ago

    I think it's werry much possible,the company (and the product) just has to show that they can build machines that don't break after a few games, that they will offer support to the customer, and of course, a game that you want to play.

    #3 76 days ago

    I think the problem with all new pinball companies is they underestimate how hard it is to set up a pr9duction line

    It is fine to announce a new game, but expecting people to be happy to wait years to see gamesship is a big ask

    -3
    #4 76 days ago

    Sure, but if a prospective startup openly admits to not caring about selling to America they'll never have a production run of more than a couple hundred machines of any one title and never make any real difference to the current global pinball market anyway.

    That's not business acumen, that's myopic idiocy.

    Most of these fly by nighters start up in a foreign country with lax minimum workplace standards to try and make a quick buck by avoiding domestic workplace regulations and fair work laws and not for any long term going concern objective.

    It's rather pointless to tout to preorder buyers that their company will produce replacement parts for the life of the machine if the life of the company ends up being less than 5 years.

    Meme derailment as requested.

    quality control (resized).jpg

    #5 76 days ago

    it is not a problem of market, it is a question of business competence. technical acknowledges are not enough to create a company whatever the industry sector. USA and Europe get a quite identical of standard of living so that is not a question of bom cost.

    high quality gets a cost but customers are ready to pay extra for quality.

    #6 76 days ago
    Quoted from HighProtein:

    Why would at this point any new company try to make games in a foreign country.

    narrow market and i guess many money is needed to start.
    and there is also 20%-23% TVA here in europe while your US taxes are around 5-10%. i also think that euro currency could be an issue, it depends on the exchange currency rate euro-dollar

    anyway, i always said it was stupid that DP didn't sell to EU market.

    #7 75 days ago

    With Stern expanding into Brazil I would say yes you can be profitable outside the US.

    #8 75 days ago
    Quoted from Thrillhouse:

    With Stern expanding into Brazil I would say yes you can be profitable outside the US.

    Brazil is unique in that import fees are crazy there. It would be stupid to ship a complete game there because the final cost would be double or triple just from government fees. So assembling in Brazil for the South American market is the only feasible way to get games there. My guess with stern would be that most of the parts would be ordered from China (same as they are for the American built games)but final assembly would take place in Brazil. Stern won’t be creating new parts there, they will be just putting the parts together.

    HomePin has the right idea with manufacturing in China. Everything will be made in house at their factory so that quality can be controlled. No need to worry about shitty Chinese parts when you’re there watching over the manufacturing process. (Apple can make a quality product in China, and so can a pinball company) quality control with Chinese manufacturing is only a problem when your ordering a product from the other side of the globe and can’t check in to make sure that it’s being done right. The Chinese companies want to cut corners and save money too, but it’s imperative that you oversee the process and get the quality that you want. HomePin will need to sink in a boat load of cash to get their facility up and running, but I think their doing well and we’ll see their games soon enough.

    Small boutique pinball companies will have a difficult time building a game in any first world company because manufacturing costs are astronomical on small production runs. Without an efficient line assembling a large quantity of games it would not be feasible, you need that large quantity run to save enough on scale to make it worthwhile. Stern has the benefit of years of experience. JJP looks to finally be getting close to efficiency. Spooky seems to be doing well, but it wouldn’t have been easy to get them to where they are today.

    #10 75 days ago
    Quoted from Luckydogg420:

    HomePin has the right idea with manufacturing in China. Everything will be made in house at their factory so that quality can be controlled. No need to worry about shitty Chinese parts when you’re there watching over the manufacturing process. (Apple can make a quality product in China, and so can a pinball company) quality control with Chinese manufacturing is only a problem when your ordering a product from the other side of the globe and can’t check in to make sure that it’s being done right. The Chinese companies want to cut corners and save money too, but it’s imperative that you oversee the process and get the quality that you want. HomePin will need to sink in a boat load of cash to get their facility up and running, but I think their doing well and we’ll see their games soon enough.

    Component assembly might be happening in house, but most of the manufacturing of base parts (apart from boards) are being farmed out to be made by mom and pop sized third party Chinese companies who have never seen a pinball machine in their lives.

    That's why it took them 2 years and 6 attempts to make a replicated lockdown bar.

    Interesting sidebar whilst we are discussing and comparing manufacturing in other countries is that their facility would also only be on lease from the Communist Party Government as outright freehold property ownership over there is non-existent. The Chinese Govt retains the right to reacquire property at any time without notice or recompense.

    Quoted from HighProtein:

    If you said "Yes" explain how...

    By exploiting a wage system that would be incomparable in just about every other country in the Western world.

    #11 75 days ago
    Quoted from Thrillhouse:

    With Stern expanding into Brazil I would say yes you can be profitable outside the US.

    No, Stern expanding isn't my question...
    I'm asking about a new pinball company.

    #12 75 days ago
    Quoted from pinsanity:

    By exploiting a wage system that would be incomparable in just about every other country in the Western world.

    So it doesn't take much more than that?

    #13 75 days ago
    Quoted from HighProtein:

    So it doesn't take much more than that?

    That would be the main carrot to suppress ongoing expenses with a labour intensive facility such as this, but I would also add.

    Diversification of product output.
    Manufacturing of base level componentry that is interchangeable into other existing products on the market.

    Both of these would be vital for when/if the main venture of pinball machine manufacture doesn't germinate to its anticipated fruition.

    As said before though, it doesn't matter where a manufacturer sets up operations as it is moot if the manufacturer is determined to alienate themselves from or ignore the predominant US consumer market.

    #14 75 days ago

    Can you imagine how much cheaper you would have to manufacture your game in China to offset the shipping costs to the US? If that is your target market.
    If your market is mostly China, Then I could see that happening. Heck we have enough problems with handling the games properly to get them undamaged to customers here. Can you imagine how much handling is required from an over seas manufacture? Twice, three times as much, more... The bottom line is profitability.

    #15 75 days ago

    Yes .... made in holland , Dutch pinball.
    They are going to make it i'am sure.
    Won't take long watch my words.

    #16 75 days ago

    I think the only manufacturer who was smart about gearing up was homepin. They are more diversified than any other pinball manufacturer by being able to manufacture various other parts, boards, and video games. They worked their way up to building a pinball machine.

    Everyone else either failed, teetered on the edge of failure, and/or had to get bailed out.

    There is just a huge up-front investment of time and money before an actual product can be brought to market and sold--a product that is, big, expensive, and complicated where any number of things can go wrong. It's risky to bank everything on that one expensive and complicated product since there's no safety net.

    On the other hand, homepin brought lots of smaller stuff and simpler video games to market first to help earn some revenue. If anyone wants to start up pinball manufacturing in the future, I would say the best approach would be this model.

    We've already seen failures and near failures with the other approach of a huge up-front investment. Changing the country in which a company is based while using this model won't change the odds of how successful (or not) a company is. Changing the approach to how the business is run and what it does will make a huge difference.

    That's the most significant difference between homepin and everyone else--not that it happens to be in another country. From what I've heard in interviews/presentations with Mike, in some ways, manufacturing can actually be much more difficult in China than it would be in the US. One stumbling block is that it's time and cost prohibitive to import anything--which is a fairly significant issue for manufacturing. Imagine if you couldn't import screws or whatnot.

    #17 75 days ago
    Quoted from ForceFlow:

    I think the only manufacturer who was smart about gearing up was homepin. They are more diversified than any other pinball manufacturer by being able to manufacturer various other parts, boards, and video games. They worked their way up to building a pinball machine.
    Everyone else either failed, teetered on the edge of failure, and/or had to get bailed out.
    There is just a huge up-front investment of time and money before an actual product can be brought to market and sold--a product that is, big, expensive, and complicated where any number of things can go wrong. It's risky to bank everything on that one expensive and complicated product since there's no safety net.
    On the other hand, homepin brought lots of smaller stuff and simpler video games to market first to help earn some revenue. If anyone wants to start up pinball manufacturing in the future, I would say the best approach would be this model.
    We've already seen failures and near failures with the other approach of a huge up-front investment. Changing the country in which a company is based while using this model won't change the odds of how successful (or not) a company is. Changing the approach to how the business is run and what it does will make a huge difference.
    That's the most significant difference between homepin and everyone else--not that it happens to be in another country. From what I've heard in interviews/presentations with Mike, in some ways, manufacturing can actually be much more difficult in China than it would be in the US. One stumbling block is that it's time and cost prohibitive to import anything--which is a fairly significant issue for manufacturing. Imagine if you couldn't import screws or whatnot.

    In china they don't import, they make or copy things and then export it.

    #18 75 days ago

    Is Quetzal Pinball considered a success? How many have they delivered?

    #19 75 days ago

    I'll consider Homepin a "success" if they can create a better than Stern Pro, for a cheaper than Pro price.

    From the sounds of it, the pricing will not be significantly different, if at all, and it's hard to say their product will be better than a Stern Pro.

    and if they can't do that, then what was the point? Other than being a parts manufacturer for other companies.

    #20 75 days ago
    Quoted from ForceFlow:

    I think the only manufacturer who was smart about gearing up was homepin. [...]

    Agreed. And ignoring all drama about Mike himself, from what I've seen it seems like the manufacturing bit he has down (or soon will). Now imagine if he had a well designed pin, with great code, and desirable theme (licensed or not)... and if he sold that where he has suggested then I think he would have quite a back order.

    #21 75 days ago

    Anything is possible as long as people are willing to pay upwards 8K for a NIB.

    #22 75 days ago
    Quoted from Chalkey:

    Anything is possible as long as people are willing to pay upwards 8K for a NIB.

    That won't last forever unless the quality increases.
    -Mike

    #23 75 days ago
    Quoted from Chalkey:

    Anything is possible as long as people are willing to pay upwards 8K for a NIB.

    That's 8k for a NIB from a reputable company with a long and or decent reputation of already building games...

    #24 75 days ago
    Quoted from Jesterfunhouse:

    Is Quetzal Pinball considered a success? How many have they delivered?

    How many Captain Nemo were built?
    Any profit made?

    #25 75 days ago

    Possible yes, probable no....Given what has happened in the last few years, why would anyone want to open up a new pinball company? The only way it can work is with very deep pockets (no pre-order nonsense anymore) and a very skilled leadership group that has experience in pinball.......so not impossible but pretty darn difficult...American Pinball may fit the bill.....scratch that, American Pinball is located in the US....sorry

    #26 75 days ago
    Quoted from Chalkey:

    Anything is possible as long as people are willing to pay upwards 8K for a NIB.

    I don’t think so. 8k is just now a standard selling price, whatever bom cost, all kind of charges.
    Stern and jjp were exploring the limits of what a customer was willing to pay for a new pinball machine.
    All could be built and engineered in Bangladesh that the selling price would be still 8k

    #27 75 days ago
    Quoted from HighProtein:

    That's 8k for a NIB from a reputable company with a long and or decent reputation of already building games...

    Tell that to the Heighway pinball thread. The prices people are willing to pay make up for a lot of inefficiency and poor business acumen. No sign of a price ceiling. Get a good theme, charge what you want, it's possible. Rumor is Heighway is launching another title despite all the times they stumbled with Alien. If they are profitable after that game it'll be proof positive.

    #28 75 days ago

    Of course someone could, just most likely not in Europe.

    I could see Mexico perhaps.

    #29 75 days ago
    Quoted from Chalkey:

    Tell that to the Heighway pinball thread. The prices people are willing to pay make up for a lot of inefficiency and poor business acumen. No sign of a price ceiling. Get a good theme, charge what you want, it's possible. Rumor is Heighway is launching another title despite all the times they stumbled with Alien. If they are profitable after that game it'll be proof positive.

    Profitable shipping 10 to 20 games a month?

    #30 75 days ago

    Sure it is possible. The real question is why bother? There are easier ways to make money. All the other companies that tried (are trying) were started by people that were passionate about pinball first and foremost - I don't think they got into the business thinking they were going to be rolling in money after a few years. They were hoping to not lose money for sure. But how many of those people are passionate enough that they would pack up and move to (say China) to get a longer term profitable/sustainable small business off the ground? What the new ventures didn't have was that large amount of cash to get started with a bang (no different than most small businesses). I don't think any of them started with a realistic business plan because if they did - they would have realized that they didn't have enough startup capital. The one company that did it well (still is) is Spooky - they started out with realistic goals. They won't get filthy rich overnight (not sure that was their reason for starting) but who knows how big Spooky could be 20 years from now (if the owners want to expand and they keep plugging away). Build a solid, entertaining product and people will come.

    I mean even Gary (Stern) wouldn't have kept the doors to Stern open if he wasn't passionate about pinball (and maybe he had some goodwill towards his employees perhaps). I am sure profit margins were so low that he would have been better off (at that time) selling the left-overs and retiring to a nice home in the hills.

    I love that there are people that are passionate about this hobby to try new startups because it certainly helps provide some momentum for pinball but at the end of the day if it is truly about money then there are easier ways. Competition (against Stern) would have never gotten off the ground if a new niche market of buyers (LE, Premium) wasn't stumbled upon. Someone at Stern (new investors) had the right idea by splitting their products to target different price points (like car manufacturers, etc. have been doing for decades). I think Stern would have been considered to hit things completely out-of-the-park with this model if they hadn't skimped on the quality at the same time (to increase profits even more). Their Pro, Premium, LE model is from a marketing perspective - awesome (wish I could afford every new LE though).

    #31 74 days ago
    Quoted from tiesmasc:

    Agreed. And ignoring all drama about Mike himself, from what I've seen it seems like the manufacturing bit he has down (or soon will). Now imagine if he had a well designed pin, with great code, and desirable theme (licensed or not)... and if he sold that where he has suggested then I think he would have quite a back order.

    If you do some googling on Hankin pinball machines that should give some idea of future direction. General consensus on those is that they are pretty to look at but mediocre in the fundamentals of gameplay and design.

    Quoted from frolic:

    I'll consider Homepin a "success" if they can create a better than Stern Pro, for a cheaper than Pro price.
    From the sounds of it, the pricing will not be significantly different, if at all, and it's hard to say their product will be better than a Stern Pro.
    and if they can't do that, then what was the point?

    All of the objective feedback from those who have played the first machine iteration is that it is severely lacking in design, layout and shot geometry which are the building blocks for any well received pin. And since the code is 99% complete (no jackpot callouts???) just how much significant adjustment to the layout can be made between prototype and production machine to have an effect remains dubious at best.

    Quoted from frolic:

    Other than being a parts manufacturer for other companies.

    I would say that will be the fallback position once reality hits. Ben Heck alluded to the same thing on a recent podcast.

    It is heartening to see a few guys over your way are maintaining an objective, critical analysis based stance rather than getting caught up in the propaganda machine of "cheap pins from China to undercut Stern".

    1 week later
    #32 67 days ago
    Quoted from pinballwil:

    In china they don't import, they make or copy things and then export it.

    It really depends on what is being imported.

    Australia's top trading partner for our exports is China who import the largest single slice (over 25%) per year of our total amount of exported goods on a per country basis.

    In fact for the last ten years it has really been the main aspect keeping our economy in the black so as a result of this the Chafta agreement our Government signed removes a majority of any existing import barriers to almost 93% of traded products between the two countries to further enhance trade.

    The blanket statement that often gets tossed around that you can't import anything into China is therefore somewhat of a convenient exaggeration to fit the narrative to be blunt.

    But yes, I do get your point. Why bother to import prebuilt componentry to your assembling facility and paying close to US retail pricing when you can have a bunch of aftermarket knockoffs made for cents in the dollar and then resell them as same same but different substitutes.

    #33 66 days ago

    Sure a new company can be successful and profitable. It all depends on the game they are making, the quality, service and who they are aiming for. Currently there seems to be an overkill of games aimed for collectors and rec room buyers. While Stern is offering a Pro model for operators, reality is that most operators learned the hard way that Stern's games don't earn that well on location. This was the case 15 years ago and still is. Even if Stern games are possibly earning better than 15 years ago, once an operator drops a brand it's difficult to change his mind about that brand. That gives new companies a chance to break into that market. All it takes is a good, fun, challenging, reliable game that is earning like crazy with low maintenance. For that reason I think Spooky have a winner on their hand with Total Nuclear Annihilation. If TNA outearns Stern Pro games on location, operators will be interested. Now operators only need to discover that game. But as your question was about non-U.S. companies, so I guess that one doesn't count. The same principle applies though.

    So the operator's market is up for graps, but there's more. In Asia, specifically China, pinball as we know it doesn't exist. Stern is trying to get into that market with their games and that doesn't work. Why? Aside from the themes not appealing to that market, I think it also has to do with the entrance level of things. Here's an analogy: let's say a kid is learning to read at the age of 6. If you give that kid a Shakespeare book of 600 pages to read, that's pretty intimidating. He may give it a try and put the book away after a few paragraphs. You have to start at a lower level to get the kid to read and develop so years later he can get into Shakespeare. Same thing applies to pinball. To enter that market you have to teach them how to play first with very basic games. Most 45 year olds and up learned to play pinball on EM games and grew along when the games started to develop. So for a new market you may have to start with EM type of games, but using current technology. If a new company gives that a shot I think they may start a revolution. Then you'll see other Chinese companies jump in, starting to make games of their own. Sure that will be copy cats, but still.

    #34 66 days ago
    Quoted from pinsanity:

    Australia's top trading partner for our exports is China who import the largest single slice (over 25%) per year of our total amount of exported goods on a per country basis.

    Quoted from pinsanity:

    The blanket statement that often gets tossed around that you can't import anything into China is therefore somewhat of a convenient exaggeration to fit the narrative to be blunt.

    Your exports are minerals and agriculture. They do not allow manufactured goods into the country without very high tariffs, leaving luxury goods as the only real option.

    So yes, a blanket statement that you can't import anything is incorrect. However most people are referring to manufactured goods when talking about Chinese trade because it has been set up unfairly.

    #35 66 days ago
    Quoted from unigroove:

    To enter that market you have to teach them how to play first with very basic games. Most 45 year olds and up learned to play pinball on EM games and grew along when the games started to develop. So for a new market you may have to start with EM type of games, but using current technology. If a new company gives that a shot I think they may start a revolution. Then you'll see other Chinese companies jump in, starting to make games of their own. Sure that will be copy cats, but still.

    I remember when TZ and STTNG first appeared on location in my area--I didn't have a lot of pinball experience at the time. Those games seemed somewhat intimidating at the time since there was so much on the playfield. I floundered on them for a game or two then gave up and went to play other, simpler games. TZ was removed a short time later, but STTNG stayed put for many years after that.

    So yes, for an experienced player, more complicated games are great--they can be engaging and challenging. For inexperienced players, they are confusing, intimidating, overwhelming, and not very fun.

    #36 66 days ago

    As much of a jerk Mike from homepin is, he has the only marginal shot at succeeding because he has his parts made local (and cheap), which means once the tooling is paid for his parts are dirt cheap. He also has a board business as a cash cow to fund the pinball side. What kills any company outside of the US is the shipping and import tax costs for off the shelf parts. Heck, just ask Charlie from spooky what he was paying intially to ship batches of parts to build 10 pins just from Pinball life in Illinois to Wisconsin, then realized it was far cheaper to simply drive the trailer down, load it up, and drive back.

    #37 66 days ago
    Quoted from Black_Knight:

    Your exports are minerals and agriculture. They do not allow manufactured goods into the country without very high tariffs, leaving luxury goods as the only real option.
    So yes, a blanket statement that you can't import anything is incorrect. However most people are referring to manufactured goods when talking about Chinese trade because it has been set up unfairly.

    Most of the tariffs on commonly manufactured items (televisions, dvd players, fridges etc) are going to be progressively reduced to zero over the next few years under our joint free trade agreement with China.

    Out of interest, pinball machines (pintables) are already set at zero percent tariff import rate under ChAfta.
    https://ftaportal.dfat.gov.au/CHN/AUS/ChAFTA/product/95043090/tariff?expanded=9504&searchTerm=pintables

    #38 66 days ago

    "America"? As in the United States?

    @highprotein , the term "America" spans multiple continents.

    #39 66 days ago

    Absolutely yes. But you need a strong presence in the US. Manufacturing can be done overseas to cut down costs but people want US based customer service and parts readily accessible through their local distributors. Bottom line cut cost where you can but never sacrifice quality.

    #40 66 days ago
    Quoted from pinsanity:

    Most of the tariffs on commonly manufactured items (televisions, dvd players, fridges etc) are going to be progressively reduced to zero over the next few years under our joint free trade agreement with China.

    Sure, but if you are going to compete with China making those things you are going to lose!

    #41 66 days ago
    Quoted from Black_Knight:

    Sure, but if you are going to compete with China making those things you are going to lose!

    Absolutely, we can't compete on wages alone as alluded to in my first post in this thread and later expanded on in the second.

    Merely demonstrating that importation of goods into China (from Australia at least) isn't as impossible as some were making it out to be at the time when it was announced that base of assembling operations and procurement of parts would be there.

    I knew from our FTA using that line of reasoning as a justification simply didn't hold water as it relates to pinball machines.

    #42 66 days ago

    Where can you buy a Homepin pinball machine again?

    ZERO chance for the foreseeable future. I'll never buy another pin from overseas. I don't care who is the distro here. Plus you have the currency exchange. Those guys should be able to build out a market for themselves over there.

    Dutch gone (for all intents and purposes), Heighway gone (Andrew version), Homepin?

    1 week later
    #43 59 days ago

    No or there would be one....

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