(Topic ID: 200188)

JJP business strategy and a warning for Stern


By spinal

1 year ago



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  • Latest reply 1 year ago by SUPERBEE
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    #1 1 year ago

    Here are some thoughts on where JJP might be heading over the next few years...

    A good business strategy these days is to focus on quality and brand building and start off focusing on the high-end customer while building up a company (more profit margin). Emphasis on customer experience, reliability and generating lots of good will.

    Then, when sales (profits) reach a certain height, strike into the broader market with something everyone can afford. If you have been following the modern car industry in recent years, this is exactly what Tesla has done and is in the process of doing.

    I agree that JJP is taking the high-end now (SW LE sales are done once JJP POTC standard is released if not already - just compare them side to side). But there will come the day when JJP will surprise everyone with a release for the broader market - it's just a matter of time.

    I support all companies and just want each pinball machine to be the best it can be, each one operating within a healthy and competitive industry.

    It's time to step it up Stern because it's just a matter of time - real competition is coming sometime down the road and not just at the high-end of the market. Competition is good for everyone so looking forward to see how it plays out.

    What do you think JJP's longer-term business strategy is?

    #2 1 year ago

    That's exactly how TESLA did it. Well spotted.

    #3 1 year ago

    I hope jjp will make a game in line with the $6500 range or so. Would be a nice option.

    #4 1 year ago

    Duly Noted....

    -1
    #5 1 year ago
    Quoted from GotAQuestion:

    That's exactly how TESLA did it. Well spotted.

    My understanding of Tesla is - start with most expensive model and offer it first and make customers wait forever. Next introduce a less expensive vehicle that is still twice the average price of a new car and make customers wait a long time. Finally promise the next vehicle will cost significantly less and that the wait will be tolerable. I am waiting on a model 3 but don't expect it before next Fall. So not wanting to rewrite history, but the Tesla analogy does not apply here in the least. Once again a cargument bites the dust.

    #6 1 year ago

    My main question on this is why is yesterday different than when Hobbit or DialedIn were released? Both of those games soar above the games released by Stern at the same time in terms of quality, depth, and code completeness.

    I've been hearing the most ridiculous arguments for years now on why the Stern DMD with its "Speak and Spell" resolution is better than a high def monitor because of the nostalgia feel, etc. Quotes like "I like looking at my static backglass when the machine is turned off" and "the dragon would be better if it ate the balls" have littered threads for years now while people are literally having their Stern games "melt" in front of their eyes with ghosting inserts, peeling decals, chipping clearcoat, etc. Heck, people are trying to come up with a ramp fix on a 15k game on their own right now just to get it to play right.

    Was it because of the BM66 code debacle? The POTC theme? A combo of both that finally made people turn on Stern?

    #7 1 year ago
    Quoted from jeffspinballpalace:

    My understanding of Tesla is - start with most expensive model and offer it first and make customers wait forever. Next introduce a less expensive vehicle that is still twice the average price of a new car and make customers wait a long time. Finally promise the next vehicle will cost significantly less and that the wait will be tolerable. I am waiting on a model 3 but don't expect it before next Fall. So not wanting to rewrite history, but the Tesla analogy does not apply here in the least. Once again a cargument bites the dust.

    No, that's just being a butt vs looking at the topic - business strategy.

    Tesla knew they had a very expensive proposition in front of them - in both of technology and getting to scale. So you don't focus on a high volume, low margin segment... you focus on HIGH margin, low volume segment. On the backs of the "price is no object" crowd, you use the high revenue products to bring in cash to build out the business and develop your infrastructure. The low volume keeps you from having to scale out horizontally without much to gain. Once you have hammered out your processes and technology, you can plan to scale up and use economies of scale to drive your costs down... and enable you to offer lower priced products and attack the center of the market.

    JJP knows they are looking at a low volume segment, so they know they need the high margin.. which means go luxury. They also know that the luxury angle is the one that differentiates themselves in the market from the competition. It's why it's a good plan as long as you can deliever and the buyers are still out there.

    If later they decide to move into a more value segment is still a question... In other industries you often introduce a new BRAND for that.. so you don't dilute or contradict the expectations of the brand you previously built. Ultimately it will be needed if JJP saturates the 'luxury' end of the brand. Then, the only place to grow is by moving into other segments.

    #8 1 year ago
    Quoted from jeffspinballpalace:

    My understanding of Tesla is - start with most expensive model and offer it first and make customers wait forever. Next introduce a less expensive vehicle that is still twice the average price of a new car and make customers wait a long time. Finally promise the next vehicle will cost significantly less and that the wait will be tolerable. I am waiting on a model 3 but don't expect it before next Fall. So not wanting to rewrite history, but the Tesla analogy does not apply here in the least. Once again a cargument bites the dust.

    This pretty much fits the business model described to a T. Hidden in there appears to be complaints about waiting longer than expected, but luckily pinball isn't a new technology like the Tesla-designed electric car, and JJP isn't Heighway! (*ooooh!*)

    #9 1 year ago
    Quoted from gearheaddropping:

    Was it because of the BM66 code debacle? The POTC theme? A combo of both that finally made people turn on Stern?

    A bit of the first... People knew Stern was going to move into the nextgen.. but you didn't know what their effort would be. So 'wait and see' was in effect. Now, people have seen it... so that hesitation is removed. Stern's track record has been spotty with looking to push FURTHER into what these home buyers think they want... MAWR!

    JJP has established a trajectory... and a consistent pattern that people now believe they will persist. So JJP future looks 'clearer' to some... while Stern's delivery has been pointing in the opposite direction.

    Quality Issues
    Code Issues
    Pricing Debacles (BM66)
    Game Design Concerns (SW)

    JJP has the momentum of 'good', while Stern has the momentum of 'negatives'

    The real meat is when people pay the bill tho... so let's wait to see people cutting checks before we decide who has won

    #11 1 year ago

    Don't follow the Tesla model

    They lose $$ on every car they sell

    Follow the Apple model

    #12 1 year ago
    Quoted from iceman44:

    Don't follow the Tesla model
    They lose $$ on every car they sell
    Follow the Apple model

    Simply stated.

    #13 1 year ago
    Quoted from flynnibus:

    No, that's just being a butt vs looking at the topic - business strategy.

    You got it. Along with everything else you said.

    #14 1 year ago

    I am wondering about Sterns decision not to show at Expo. To me this reeked of them wanting to design it a little more before revealing it. Well, since software will probably take another year anyways, they can certainly wait six months to announce GOTG. Maybe they are busy adjusting the layout, building and testing additional toys, hiring real voice talent, reworking artwork etc.. GOTG will be used to demonstrate Stern's mighty design team. We'll have to stay tuned!

    #15 1 year ago
    Quoted from jeffspinballpalace:

    I am wondering about Sterns decision not to show at Expo. To me this reeked of them wanting to design it a little more before revealing it. Well, since software will probably take another year anyways, they can certainly wait six months to announce. Maybe adjust the layout a bit and add more toys and redo artwork etc.

    I don't expect to see a new Stern title until early 2018 personally.

    #16 1 year ago
    Quoted from jeffspinballpalace:

    I am wondering about Sterns decision not to show at Expo. To me this reeked of them wanting to design it a little more before revealing it. Well, since software will probably take another year anyways, they can certainly wait six months to announce. Maybe adjust the layout a bit and add more toys and redo artwork etc.

    Or it could be because their factory is busy building their catalog and they don't time releases with Expo. They don't always have a new game to show there. Last year kind of screwed them actually because of the forced deadline of Batman with their 30th anniversary.

    #17 1 year ago
    Quoted from iceman44:

    Don't follow the Tesla model
    They lose $$ on every car they sell
    Follow the Apple model

    that's actually a myth, mostly propagated by people financially invested in Tesla's failure. the truth is Tesla's vehicles have some of the highest profit margins in the industry. A Model S costs about $30,000 to build according to former executives, and they start at $68k (Most car companies have margins close to 12% per vehicle). the myth comes from the fact that the company currently loses money, but that's only because they are building a ridiculous amount of previously-nonexistent infrastructure like gigafactories, assembly plants, and almost 10,000 supercharger stations (so far).

    simply dividing bottom-line costs by number of cars sold is a disingenuous way to determine what a car costs to build, when you are talking about a company that is rapidly expanding and making humongous investments in long-term infrastructure.

    sources:
    https://seekingalpha.com/article/3968035-tesla-lose-money-every-car-sold
    https://www.inverse.com/article/31597-tesla-secret-profit
    https://seekingalpha.com/article/3972238-tesla-manages-make-21944-per-car-sold

    note that this strategy only works if you have a tremendous amount of capital to burn up front.

    #18 1 year ago
    Quoted from spinal:

    But there will come the day when JJP will surprise everyone with a release for the broader market - it's just a matter of time.

    Huh?
    That was quite vague...

    #19 1 year ago
    Quoted from pezpunk:

    the myth comes from the fact that the company currently loses money, but that's only because they are building a ridiculous amount of previously-nonexistent infrastructure like gigafactories, assembly plants, and almost 10,000 supercharger stations (so far).

    Yeah, if you were going to build the entire oil industry yourself so you could sell a gas to drive around, the cost to do so might be higher.

    But once you have that environment... you have created something extremely hard to catch up with.

    Rode a P100D yesterday. My mind is still blown.

    #20 1 year ago
    Quoted from jeffspinballpalace:

    I am wondering about Sterns decision not to show at Expo. To me this reeked of them wanting to design it a little more before revealing it. Well, since software will probably take another year anyways, they can certainly wait six months to announce GOTG. Maybe they are busy adjusting the layout, building and testing additional toys, hiring real voice talent, reworking artwork etc.. GOTG will be used to demonstrate Stern's mighty design team. We'll have to stay tuned!

    I think JJP just sent them back to the drawing board..... we can speculate all we want, but it’s not in Sterns dna to build a pinball that approaches the JJP quality & attention to detail.

    #21 1 year ago
    Quoted from iceman44:

    Don't follow the Tesla model
    They lose $$ on every car they sell
    Follow the Apple model

    Producing the Pinballs machines in China?
    Avoid paying taxes?

    I think thats the wrong way.
    Better buily high quality games with a huge fun factor.
    Not attach a higher price a tag to a cheap product.

    #22 1 year ago
    Quoted from master_of_chaos:

    Producing the Pinballs machines in China?
    Avoid paying taxes?
    I think thats the wrong way.
    Better buily high quality games with a huge fun factor.
    Not attach a higher price a tag to a cheap product.

    Naa.... he meant build the best products in the world and you will be successful

    #23 1 year ago
    Quoted from mountaingamer:

    I think JJP just sent them back to the drawing board..... we can speculate all we want, but it’s not in Sterns dna to build a pinball that approaches the JJP quality & attention to detail.

    It was a smart decision to not show as they would have had to contend with questions about how much influence the-designer-who's-name-can-no-longer-be-spoken had on the game.

    Given some more time, the community will forget (a bit) and they can claim to (or actually) erase any influence he had on the game. You don't want that kind of press associated with your next blockbuster. Smart move by Stern IMO.

    #24 1 year ago
    Quoted from spinal:

    It was a smart decision to not show as they would have had to contend with questions about how much influence the-designer-who's-name-can-no-longer-be-spoken had on the game.
    Given some more time, the community will forget (a bit) and they can claim to (or actually) erase any influence he had on the game. You don't want that kind of press associated with your next blockbuster. Smart move by Stern IMO.

    definitely not faulting them for that. they have little choice there.

    #25 1 year ago
    Quoted from mountaingamer:

    Naa.... he meant build the best products in the world and you will be successful

    Not to mention bending over your customers on prices and forceng them to use 'their' own overpriced stuff

    #26 1 year ago
    Quoted from Mfsrc791:

    Not to mention bending over your customers on prices and forceng them to use 'their' own overpriced stuff

    Ok - enjoy your cheap stuff I’m not sure though how Apple manages to top customer satisfaction surveys... maybe your misinformed?

    #27 1 year ago

    The example is somewhat flawed in that Tesla keeps reporting higher revenues, but I'm not even sure if they've turned a profit yet. They're the old joke about making a small fortune doing something... by starting with a large fortune. It's great that the company is pushing technology, but absolutely not a working business model for pinball.

    More successful car companies have actually done the exact opposite. Acura and Lexus are hugely successful as luxury blands spun off cheaper parent cars. Mercedes and BMW have tried and failed a couple times in trying to succeed at what you're suggesting.

    #28 1 year ago

    Ostrich. Head. Sand.

    #29 1 year ago
    Quoted from spinal:

    What do you think JJP's longer-term business strategy is?

    I'm not sure about long term, but short term was showing Disney who they should be dealing with from now on.

    My dad worked for a company that sold parts to Disney and he was surprised at how they would not cut corners and wanted everything built beyond specs.

    #30 1 year ago
    Quoted from iceman44:

    Don't follow the Tesla model
    They lose $$ on every car they sell
    Follow the Apple model

    So curtail labor laws by moving manufacturing to China?

    #31 1 year ago

    Personally the way I feel is that for Stern, the forefront of the pinball industry, for the company to evolve, is for Gary Stern to retire. There are too many reasons to list and love him or hate him, he saved pinball. He did. He made those Austin Powers games, Roller Tycoons, etc. He somehow with the collector market mainly kept making and selling those games.

    There needs to be a fresh new outlook for the company to survive and to really advance the industry. People want a Daft Punk pinball game. Unfortunately you have senior management who won't make those dream titles because they believe games like Aerosmith and KISS will sell to an older audience who has the funds to actually buy the game. What they don't realize though is that the consumer is aging past their 30's now and are buying homes of their own and pinball games.

    The community is a different beast now with smart phones, video streams, podcasts, Facebook, mini computers in pinball machines, young designers. Stern has struggled with this in the past 5 years and that is because you have 60+ year old guys calling the shots who don't quite understand how to play their new games let alone have a smartphone.

    #32 1 year ago
    Quoted from hool10:

    Personally the way I feel is that for Stern, the forefront of the pinball industry, for the company to evolve, is for Gary Stern to retire. There are too many reasons to list and love him or hate him, he saved pinball. He did. He made those Austin Powers games, Roller Tycoons, etc. He somehow with the collector market mainly kept making and selling those games.
    There needs to be a fresh new outlook for the company to survive and to really advance the industry. People want a Daft Punk pinball game. Unfortunately you have senior management who won't make those dream titles because they believe games like Aerosmith and KISS will sell to an older audience who has the funds to actually buy the game. What they don't realize though is that the consumer is aging past their 30's now and are buying homes of their own and pinball games.
    The community is a different beast now with smart phones, video streams, podcasts, Facebook, mini computers in pinball machines, young designers. Stern has struggled with this in the past 5 years and that is because you have 60+ year old guys calling the shots who don't quite understand how to play their new games let alone have a smartphone.

    Those 60 year old guys are doing a hell of a job as far as picking themes and really everything involved. The ONLY problem Stern has right now is they need to have a better quality playfield and maybe do a better job on coding these games. Those should he fairly easy fixes I would think. Gary Stern is a good man and he's also good for this hobby.

    #33 1 year ago

    I agree with what jjp is doing, and they may go broad.

    However, I've been in the auto industry my entire life and the tesla analogy is a bit off, believe me you don't want any pin manufacturer to be them.

    #34 1 year ago
    Quoted from mountaingamer:

    Ok - enjoy your cheap stuff I’m not sure though how Apple manages to top customer satisfaction surveys... maybe your misinformed?

    My Galaxy is doing just fine. My GF Iphone screen is Garbage. Making an appointment to get your screen fixed is nuts. They have so many people that need their shit fixed that you sometimes need to come back the next day

    #35 1 year ago
    Quoted from hool10:

    Personally the way I feel is that for Stern, the forefront of the pinball industry, for the company to evolve, is for Gary Stern to retire. There are too many reasons to list and love him or hate him, he saved pinball. He did. He made those Austin Powers games, Roller Tycoons, etc. He somehow with the collector market mainly kept making and selling those games.
    There needs to be a fresh new outlook for the company to survive and to really advance the industry. People want a Daft Punk pinball game. Unfortunately you have senior management who won't make those dream titles because they believe games like Aerosmith and KISS will sell to an older audience who has the funds to actually buy the game. What they don't realize though is that the consumer is aging past their 30's now and are buying homes of their own and pinball games.
    The community is a different beast now with smart phones, video streams, podcasts, Facebook, mini computers in pinball machines, young designers. Stern has struggled with this in the past 5 years and that is because you have 60+ year old guys calling the shots who don't quite understand how to play their new games let alone have a smartphone.

    Uh, what? Stern survived because they don't do any of the things you're talking about. Stern has boomed in the last 5 years, releasing games at a faster pace then ever and moving to a larger factory. Right now, this pinball renaissance feels like its not going to end, but it will. It has actually happened multiple times, including in the mid-80's and again in the late 90's. Step back, and you can practically see a 15-20 year cycle of pinball popularity ebbing and flowing. Stern is assembled from companies that couldn't survive the previous downturns, companies that were an order of magnitude larger than the companies its competing with today.

    I think a big part of the appeal this time around is the nostalgia of it not being a smart phone or computer. It's a real physical thing, something substantial.

    PS: Daft Punk is basically todays version of Chemical Brothers. How do you suppose a Chemical Brothers theme would have held up?

    #36 1 year ago
    Quoted from hool10:

    Gary Stern to retire

    I think he already did

    #37 1 year ago

    Gary knows this is a sweet machine..

    IMG_0348.PNG

    #38 1 year ago

    I think having your own Niche is good. JJP can make their high end type game and Stern can keep doing theirs. They are different. We don't need two companies with the same strategies, same marketing, etc. individual business strategies will vary and rightfully so. These are stand alone products.

    You will have your loyalists as well. People have the Ford vs Chevy arguments all the time. Reality is they are both good products.

    #39 1 year ago
    Quoted from ovfdfireman:

    I think having your own Niche is good. JJP can make their high end type game and Stern can keep doing theirs. They are different. We don't need two companies with the same strategies, same marketing, etc. individual business strategies will vary and rightfully so. These are stand alone products.
    You will have your loyalists as well. People have the Ford vs Chevy arguments all the time. Reality is they are both good products.

    Reality is that stern has jacked up the price on the low end product so much that they are losing sales. There is a reason that almost every brand new family looking for a pinball will come play our games on route and then settle on a JJP title, and it is that they want a full featured quality machine they percieve as a value for what it offers.

    They don't see the value in a Stern and tha has become the norm in the past year.

    Just my honest observation when seeing lots of non pinheads uy their first game for home.

    #40 1 year ago
    Quoted from Whysnow:

    Just my honest observation when seeing lots of non pinheads uy their first game for home.

    $7k+ is a lot of money to drop for someone with marginal interest, regardless of income. I think the price of admission puts any NIB buyer in a category way beyond casual interest or even a location player. If you consider a pinhead someone arguing on forums like a mental patient, there are plenty of people with a half dozen sub $1000 games doing that.

    #41 1 year ago
    Quoted from ovfdfireman:

    I think having your own Niche is good. JJP can make their high end type game and Stern can keep doing theirs. They are different.

    From a purely business stand point this is 100% correct. Stern is clearly focused on location games, their presentation was all about FEC’s and barcades. JJP is focused on the home consumer. Their presentation resonated because that’s a huge portion of pinside. Stern isn’t going anywhere, but I doubt they will change their ways to appeal to us either. JJP and Spooky will continue to carve into the hobbiest market because they are making the efforts to give the hobbiests what they want instead of telling the hobbiests that they should accept what is produced.

    I like Stern games, but I’ve come to realize that I have to look elsewhere in order to have a positive experience buying these expensive games.

    #42 1 year ago

    Sub $1000 games at home can be great fun and are how many of us pinheads started out. The new high $ games are great but almost need to be on location to justify their cost.

    Gary Stern has kept pinball alive thru the decades and his knowledge and experience continue to keep Stern and pinball alive and well.

    #43 1 year ago
    Quoted from frankmac:

    Gary knows this is a sweet machine..

    I was there as well. Same moment last night , I thought about taking picture but didn't. Cheers.

    #44 1 year ago

    JJP is the high end, Stern is the consumer grade. They're building the same product, but they're not really playing the same game.

    1 month later
    #45 1 year ago
    Quoted from jeffspinballpalace:

    My understanding of Tesla is - start with most expensive model and offer it first and make customers wait forever. Next introduce a less expensive vehicle that is still twice the average price of a new car and make customers wait a long time. Finally promise the next vehicle will cost significantly less and that the wait will be tolerable. I am waiting on a model 3 but don't expect it before next Fall. So not wanting to rewrite history, but the Tesla analogy does not apply here in the least. Once again a cargument bites the dust.

    If you need a car today then you will buying one very soon. If you want a new car then you have the option to wait. If Tesla is going to keep you waiting for a year or more ...and someone else offers you a similar product delivered next week what would you do?

    Oddly enough the big bottleneck on Tesla's production is the gigafactory making batteries.
    WHAT ?!?!? TESLA ELECTRIC car company cannot produce batteries, they should talk to the Energizer Bunny

    bunny (resized).png

    #46 1 year ago

    Dodge did the same when they remade the Challenger. All you could buy was the SRT8 model big motor and BIGGEST profit margin!

    #47 1 year ago
    Quoted from spinal:

    Here are some thoughts on where JJP might be heading over the next few years...

    Totally agree !!

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