So, by that logic, JJP is taking HUGE money OUT of this fragile market as well?

Geez.... we'd be better off with fewer pinball companies???!! wait.... huh?

I understand your logic, I'm just not buying it.

Even in your zero sum theory, limited pinball spending dollars wold presumably be spent with the BEST pinball machines.... and therefor, motivation to build the best.

Sounds horrible.

I don't even see his posts! He's been on ignore since like the second week of me joining Pinside so I can't see how I could be constantly disagreeing with him, I don't even know what he said.

Thing is you don't have to, because the whole reason I ignored him is he's a broken record. I got tired of the same talking points in every thread, over and over and over. Who knows though, I didn't actually reply to him, I just apologized if my tone was affected by the fact that I'm tired of him by proxy and that I find his complaining, that I can't seem to escape even on ignore, completely hypocritical. Yes, because he's a flipper, that's the source of the hypocrisy.

Is there a limited amount of pinball money in a small market? Yes, that's basic economics. Is there inevitably going to be money that would have gone to Stern or JJP going to Rick instead? Undoubtedly. Some people are spending money on MMr that wouldn't have gone to them too, it's not that cut and dry, but definitely happening.

So what? People go on and on here about the free market, and this is the free market in operation. There's demand, so Rick created supply. Let's pretend Stern and JJP go out of business over it (lol) then all that would tell us is they couldn't create a compelling enough product to compete with ancient games, and it was time to call it a day.

Who knows if I'm even replying to what Teekee was saying, I don't care, and I'm not really trying to.

Really odd analogy.

All humans need to eat. Huge market for food.

Most humans want nothing to do with a pinball machine. It's a boutique hobby/market, largely driven my home collectors. Sure, there are a handful of barcades popping up in major cities, but they ain't popping up like fast food places!

You're basing this on what? The Press Release? *snort*

Investors get involved as an opportunity to make money... by either getting in early where there is equity available.. or buying into a company on the cheap because they are down and need capital.

Why would Jack need to give up equity if all were fabulous? He's obviously sunk a ton of money into the company to start it up and given all the pre-orders and limited production he obviously has limited cash flow coming in. The 75th anniversary game is a neat trick to try to generate fresh cash flow for stuff he's already invested in. Producing the games he's already sold won't bring in fresh cash.. but flipping that production slot to a 75th anniversary would.

Maybe Jack needed capital to actually expand production? To get the point where they have new games they can sell quicker.. It's possible... but it sounds more like a cash for equity deal. Don't you think JJP would have been boasting about the great new things the partnership was going to enable if it were about funding some new specific initiative?

Has anyone else been able to find information on JDA?

http://investment-banks.findthebest.com/l/178/JDA-Partners-LLC

?

That was one of the results I got, but their webpage is no longer registered. I found some other JDA investment places, but they didn't seem to be the type to be interested in pinball.

Given the broad list of "interests" that was in the press release about JDA, I'm wondering if it's not as simple as 3 pinball guys with some money that got together to get in on Jack's action, and used their first initials as the company name.

If course it does.

In any market (pinball, fast food) there is only so much money to go around.

If you only have McDonalds in town, McDonalds gets 100% of the towns fast food spend.

Now, Subway opens down the road. Subway is going to take some of the towns fast food spend.

Now, I can see your point about the pinball market increasing. With my fast food scenario above, Subway will attract new customers who don't like McDs and thus increase the towns fast food spend.

But the guts of the matter is, for every person who eats at the new Subway, McDonalds is losing a sale, and thus they are worse off because Subway opened in their town.

rd - retired retailer with 30 years of retailing (selling since I was 6). Jezzzus I'm glad I don't have to do it any more

rd.

And if we're unlucky, one or more of the companies go out of business due to lack of sales. I got to see Bally swallowed by WMS, the death of Gottleib/Premier, Alvin G, Capcom, and finally Williams themselves. Lack of demand sucks, and I'm not 100% confident the market is big enough for all the players right now. I'd rather see new games than rehashes of old games, so I hope the remakes aren't too big a drain on the market.

You could well be right on 3 guys bailing out JJP.

The JDA in that link specializes in Mid-market firms, and JJP would probably be defined as a Micro-market firm.

He's trying way too hard to make some sense and he's failing miserably. It should be pretty simple to figure out but for Hero maybe not… give up on 'em boys!

…but there were people spending 15k-20k on MM…wasn't that "taking money away" from the new game market? Maybe now someone can buy a MM AND a new Stern or JJP

The real risk is for companies that are overleveraged, especially operationally. JJP and Stern have large production facilities, payroll, etc. while boutiques are working out of much smaller spaces. If sales drop, it's the ones with high fixed costs that will hurt most.

What I find interesting is the fact that outside investor approached Jersey Jack early in the process and he refused. I know I watched videos where he said he was offered millions but said No! So a few things could have changed, he really needed money, or they wanted less for the same dollar. Early in the business you pay more to get funding then after you have proved you can produce a wanted product.

Could just be the local wealthy guy... it is NJ after all. The list of things was interesting... tech, mining, and gymnastics? It totally sounds like a local angel investor.

I totally get that. But at the end of the day cash talks, right? Either there are enough people who like new games to keep buying them or not. If the market is so weak that MMr can just wipe it out then you've got to wonder what JDA thinks they're doing investing.

If it's that weak then one bad title would just tank Stern. Man, that would put pressure on picking a license!

Me personally, I suspect we're not ready for anyone to drop dead yet. At some point someone is going to, even if it's a small boutique shop. I don't believe there are enough people/growth to support everything.

I'd be more worried about the fact that $8k game are normal now, that's what isn't sustainable.

^^ this ^^

You said it before I did.

If everything is going swimmingly well in your business, you don't give some of it away to anyone. You lose control of your business.

The only reason you would give someone some equity (and control) in your company is because you need their money.

You can spin the press release any way you want (they are pinball guys!) but you don't take the coin unless you need it.

I wish JJP all the best with the venture. And goodwill to all other manufacturers while I'm at it. I've been there (I had a sofa factory...) it's one of the hardest things to do. You don't know until you've been there and done it.

rd.

Exactly.

"Investors want to give me money. Millions. I said 'keep your money, I don't want it' ".

-

But, I'm glad he took the money and will keep making games!

The gymnastics made me laugh a little. I tried to use that as a clue to help track down who it was, but it didn't help.

Its not trolling, and not because I agree, but because you said it with civility.

You still don't get it First, I doubt few, if any MMs hit 20K except NIB or spare-nothing HEP restores. Few even hit 15K. Most really nice MMs sell for 10-15K. So let's guess that 100 MMs have sold over the last couple years - that's 1M - 1.5M changing hands. A far cry from 8M for 1000 new units.

But, it's what happens to that cash after the sale that's even more important. I would propose that at least half the time someone sells their MM for 10-15K, they turn around and buy other games with that cash. When Rick sells an MM for 8K, he's paying for a factory, employees, supplies, etc. That cash doesn't go back into the pin market. It DOES help keep parts suppliers in business, but doesn't help other pinball manufacturers at all.

I think this is good news. When Stern got their investor, things started to turn around quickly. Having more resources at your disposal is a big plus for any new business. And I think it was obvious that JJP was in need of more resources.

I also wouldn't worry too much about info on the company. Probably just a local angel investor. Not every investor turns up on CNBC.

Yes ... But where this argument falls down is that there were only a handful of MMs selling for $15-20k.

There are 1000 MMR. Supposedly all are sold for $8000 a pop which is $8,000,000.

And the guy who is rich/stupid enough to pay 15-20k for an original MM can buy all the NIB Sterns and JJPS his heart desires.

<edit> metallik beat me to it

rd.

I have mixed feelings about the announcement. While it it a big positive, I really only care about getting the the call that my game is ready.

Teekee,

Isnt the market for remakes limited to a VERY small handful of titles? It would seem they only make sense for games that have a large delta between current market value and new construction cost/price.

I mean- the market for a $8K remake of WPT is pretty slim....

So, games that are selling for $10K+?

What else is really a similar candidate besides AFM?

*btw- Im really trying to understand your position on this. Im guessing your math looks different from min on suitable candidates for remake...

I don't want to call anyone stupid, and you don't have to be "rich" to buy MMr, but man, if you can afford an $8k toy you're either really stretching (and I'm sure some people are) or you can afford to do it and still not have to pass up the next Stern or JJP title you really want. Maybe you have to save a little, and don't get it at launch, but hey, these days that's a benefit!

The PPR remakes are fine in my book. It's all competition. If you don't want to lose sales to a remake of a 20 year old machine, make one better than it. One certainty in this hobby is that if you make a great game, people will buy it.

…and on that note I'd say that anyone who's able to buy a $8k MMR can also buy a Stern or a JJP, if it's a game they want. It's not going to destroy those companies. The doom-n-gloomers seem to know exactly who's able/willing to buy pinball machines, what's in their bank accounts, and how one title can destroy everything….it's generally pure speculation based on personal agenda.

I think MM makes sense because of its popularity and because the value it had reached was insane. After that I don't see them selling any other remade titles unless they plan on selling them for $5000 or something like that. I mean you can already get a nice original/restored AFM for $7000-$8000 so who would buy a remake unless it was priced for much less? No other titles make sense after MM IMO...

The assumption is that Rick will at least do MM, AFM, MB, and CC. He hasn't said of course, but he's hinted pretty broadly about CC at least, so if I was betting I'd guess that's next.

What would really be interesting would be B/W seeing the success and someone saying,

"Hmmmm, why dont we bang out 500 "LE" models of some of our classic games? Shit, we have ZERO dev cost and we already own the rights... we could do it cheap, with a 100% markup"

There are those who specialize in investing in the really small, privately owned companies:

http://www.kiva.org/

Makes sense… I mean that would only be another 30-40 million bucks out of the pin market for 20 year old games. Pocket change for most of us. We should still expect Stern and JJP to get their millions as well. I mean the cash flow in this market is endless correct?

I can see AFM for around 6-7K

You can? Wait....do you mean NIB? I doubt it.

Ditto - but such private orgs rarely publish who their financers are (they have no motivation to) so finding it via online sources is tough.

But could they make it that cheap? and still be worth the time/energy?

Happens all the time in business. See http://abc.go.com/shows/shark-tank

A company can be profitable but still have cash flow issues. Or have the need for a transfusion of cash to make a big leap necessary to get to a next level at a critical time.

It COULD be that they were circling the drain... but if that was the case, usually capital is hard to come by.

The fact that they got cash for equity is not a scary sign: it's a reassuring sign that the capital infusion was coming from an entity that thought it stood to gain more not from simply giving a loan at a high rate of return, but instead saw more opportunity in owning a share in the business, because that entity sees potential after presumably close examination of JJP.

I'm not saying that's the case. But to see this as simply gloom and doom just because cash for equity was given just doesn't make sense.

LOL ask Neo - every pin should cost $3K NIB.

AFM's barely got anything on the playfield…with the R&D on the new electronics of MMr out of the way, AFM could probably be produced for $5k or less & be profitable.

How could they not?

BOM is no more or even less complicated than a Stern Star Trek Pro. No color changed LEDs, no magnets, similar layout.

On top of that while you have to pay out the Williams fees you don't have to pay licensing for the theme, you don't have to pay someone to make the software from scratch (though some software costs to modify it I'm sure) you don't have to pay someone to design the playfield, or the translite and cabinet art. Presumably most of the hardware things you need to figure out will be solved already from MMr.

Still have to build them, still costs, but it's like starting out of the gate with a big head start and the wind at your back.

So if they wanted to I assume, with my limited knowledge, that they could sell them for Stern Pro prices easily.

That's not entirely accurate.

Please, educate me.

Oh please, all this means is he just took out a huge loan! Maybe he refinanced through the HARP program! He qualified cause his mortgage was more than 35% of the rent on his pinball factory...It's there in the rules...

There were a ton of red flags coming out of that business. As much as I generally despise financial folks JJP seems like a company that needs to have a VC group overseeing things and it's a great sign that the #'s made enough sense for the deal to be made.

Lets not use reality tv to base an argument on

Which is exactly what I covered in my post... what's the big hump they are getting over or advancement that JJP is getting with that new capital? Don't you think if they went through the effort of putting out a PR statement that they'd want to put some positive spin on it with 'look at where we are heading with the new partnership!'. Instead all we get is an acknowledgement of the association. If the partnership were to take them in some new direction or expansion.. they'd want to promote that this new partnership is going to ENABLE JJP to do something.

Investors take risks based on where they think things will end up. They may think JJP has a future and the risk is worth the return. But its still speculation that doesn't garuntee anything.

I'm glad JJP has gotten new capital.. I want them to succeed and be healthy. But we shouldn't read this to be anything more than it is.. someone with some money buying in... and Jack changing his direction and letting someone buy in.

Why the change.. we can only speculate.. but we do know due to their pre-sale and back logged production they are not operating with normal cash flow... and they had MUCH longer delays than they expected. All of that leads to having to throw more money at things to bridge the gap until income starts coming in steadily.

But, dude, it's REALITY TV... not regular TV!

Yeah, yeah, it's all speculation from both an investment perspective and from our perspective as to what we're trying to conclude from it. I agree.

All we can really say is they appear to have needed some capital, and they appear to have gotten it.

The rest is conjecture. I'm just saying it's not necessarily gloom and doom. Nor is it necessarily Apple, Inc. I was just trying to present to alternative scenario to others who have suggested that this must be an indicator of JJPs demise, and pointing out that it COULD be interpreted as exactly the opposite.

But your point is well-taken: it's speculation on multiple levels.

Agreed. In my opinion the magic in AFM and MM has more to do with the rules, sound and art along with decent playfields, than it does with the BOM. The creative stuff is hard to do, that's why every new pinball machine is a big ? regardless of the BOM or complexity of the toys.

Great news

The laid off JJP factory workers get their jobs back