(Topic ID: 241506)

Pinball lease? Would you see a value in this direction in the future?

By Yelobird

4 years ago


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  • Latest reply 4 years ago by cottonm4
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    #11 4 years ago

    Leasing sometimes makes sense if you are generating revenue from your machine. Say a game leases for 250 a month however it generates 600 a month in revenue. There is a positive cash flow of 350.00 and in most cases a portion of your lease payment is tax deductible. Every 24 months the game gets rotated for the latest and greatest. However when the machine is not a strong earning piece this model is not as attractive. Sometimes costing you money per month plus you have no way of selling the game to partially recoup your initial investment.
    With arcade machines it makes more sense because of the depreciation factor. Pinball is expensive although it's resale market is much stronger then most other hobbies. Buy a game for a semi good deal and in 12-24 months the game usually maintains its value. If you choose to operate this game the resale value drops a percentage however the revenue that you have collected from the machine is usually far greater than the loss of resale value.

    These figures are generic numbers just used for demonstration purposes. There are benefits both ways however evaluate all options prior to making any large financial decision.

    The more you know.

    #13 4 years ago
    Quoted from SantaEatsCheese:

    My parents ran an arcade in the 90s and they absolutely leased all of their machines for a few years until they could afford to buy their own. They leased around $100,000 worth of machines for a large arcade and paid a monthly fee. The leaser changed out a certain percentage of the machines monthly to keep things fresh and were responsible for all maintenance. Leasing a large amount of machines as an upfront investment to open a business could make sense, but I don't see this working in the home environment. The leasing terms weren't that great for the leasee and the first thing my parents did when they had the money was buy out the lease so they didn't have to pay the fees. It is/was absolutely cheaper to buy and sell machines yourself than to lease them.

    It sounds that your scenario was different then leasing. Our company Amusement Services of America is an amusement operations company. We provide amusement devices to many types of locations. We place our equipment inside of your location and we split the revenue that the equipment generates. We are responsible for keeping the equipment looking and operating perfectly. We also rotate a portion of the equipment on a routine basis to keep there customers excited to return. At no point during this agreement is the equipment the property of the location. This model is beneficial to alot of locations. Arcade is only one of there revenue streams where they can focus there time on other aspects of there business.

    #19 4 years ago

    Betson offers lease rates however you should be very cautious. Know your numbers. The lease rate always is based off of full MSRP. plus freight and taxes need to be paid up front. This means there is an up front fee to start the program and say the game is a huge hit and you want to keep it after your term has expired because the game was sold at full MSRP your buy out option is usually ridiculous. Adding all of your set up fees including payments with intrest you usually end up buying that game for thousands over what other Distributors would have sold you the game outright for. Also keep in mind they charge a document fee of roughly 200.00 for creating the paperwork.

    Just be careful in what you sign.

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