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(Topic ID: 142337)

Starting a pinball company (for school), need advice


By keithm

5 years ago



Topic Stats

  • 28 posts
  • 18 Pinsiders participating
  • Latest reply 5 years ago by keithm
  • Topic is favorited by 1 Pinsider

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    #1 5 years ago

    Still making my way through a business class where we explore the viability of new companies. I got a bunch of you to help me with a survey last month (linked below if you're interested in taking it or seeing the results) where I asked a bunch of customer-focused questions. Now I'm in a phase where I have to present to the class how much running my business will cost, financial projections, etc. I'm in over my head!

    I'm trying to understand the essential team I'd need to create a game:

    Designer
    Artist
    Engineer-type
    Programmer
    Sound designer/composer (the one area I understand, as I've been freelancing for video games for a number of years)
    Manufacturing team
    Marketing (my day job...)

    Some of this work would probably be contract-based, as I probably don't need some of them on staff year round. Anyone have input as to other people my fictional company would need on staff to make, say, 100-300 units of a boutique game? I'm trying to wrap my head around that along with the possible range of cost for parts to make those games.

    Who knows, maybe I'll find a way to make this company real, but in the meantime I'm just a talker, trying to get a good grade in my class.

    I appreciate any suggestions that help focus my thought process.

    To take the survey: https://www.surveymonkey.com/r/BDBHMMD

    To see the results: https://www.surveymonkey.com/results/SM-BMPWW89C/

    #2 5 years ago

    First thing you'd need is lots of money.

    Then the rest of your list.

    LTG : )™

    #3 5 years ago
    Quoted from LTG:

    First thing you'd need is lots of money.
    Then the rest of your list.
    LTG : )™

    That's later in the semester, finding investors or financing. Reading the recent stories on Pinside, I don't know if it will work the same way for pinball that it does for the usual tech startups. But I still gotta do my homework!

    #4 5 years ago

    You will need $6M in the bank and 3 yrs to get your first game out the door. After that IF your game sells well you should have 3 more in the pipeline ready to start shipping 3 titles per year by year 4. Don't forget you'll need a licensing guy on staff and a good lawyer and CPA to handle all the BS. Oh and don't expect to have a life or much of a paycheck until year 5. I recommend you get started with Wrath of Oympus then follow up with Archer and Mad Max for titles. Just my 2 cents (I'm available for hire).

    #5 5 years ago

    Just ask Ben Heck what he charges per hour. Pretty sure he fills all those roles.

    #6 5 years ago
    Quoted from keithm:

    That's later in the semester, finding investors or financing.

    LTG : )

    #7 5 years ago

    Is the purpose of this exercise to create a seriously viable case for a legitimate business opportunity? Or is it to demonstrate that you understand the different variables that go into running a business? While I don't know all of the particulars involved in developing a pinball table, just a cursory glance at the number of games that are delayed getting to market shows that the process is clearly far more difficult than many manufacturers anticipate. With that in mind, if I just needed to demonstrate understanding, I'd work with a few assumptions that I never would if real money was on the line. For example, as long as I was outlining all of the main steps involved, I might be pretty cavalier about "realistic" timelines and deliverables--I'd throw in something that sounds good to an outsider, rather than waste my time trying to figure out if I'd need specifically 120 hours or 250 hours of design. Either way, you already have a good sense about the different stages of production. Pick the current manufacturer that has the closest model to what you imagine your company would be like, and then adapt it to create your business plan.

    Probably the most significant barriers to entry in the pinball industry (besides $$) are the design complexities--there are artistic, mechanical, electrical and technological challenges that all have to be worked out in tandem with each other. The dirty little secret that business schools never like to talk about is how often you have to deal with uncertainty. The projects I manage at work touch upon a lot of the same challenges as pinball, but at a much more basic level. Even at the simpler level, I pretty much run into headaches and obstacles on every single project. My job is to keep the overall project on track in spite of it all. I prepare by setting up a framework schedule that gives me a sense of when I need to be done with certain stages. In my case, moving a launch date is not an option, so my contingencies are centered around always having a plan B or plan C if I can't get A to work by my deadline. My framework schedule tells me when I need to stop fussing around and make tough decisions. If you are trying to seriously develop a plan for a real company, figure out what your overall approach to addressing issues will be rather than trying to figure out every single thing that might go wrong, and outline specific milestones or gates along the way that are "unmoveable". It's true that there's never enough time or $$ no matter what your budget is, but a looming deadline often brings out very creative solutions!

    Finally I recommend looking up how to use an A-3 document. There are a lot of different variations, but a good A-3 helps you fully outline your project, from scope and objective to outlining the drivers of specific tasks. Going through the exercise of creating an A-3 can really help you pull all the steps bouncing around in your head together into a focused plan.

    Good luck with the assignment!

    #8 5 years ago

    No accountant?!? Shame shame!

    #9 5 years ago

    You really just need someone to cash the preorder checks.

    #10 5 years ago

    Also, if you are planning on doing a preorder model in your project you should get an automatic F. Haha

    #11 5 years ago

    call john popadiuk?

    #12 5 years ago
    Quoted from chuckwurt:

    Also, if you are planning on doing a preorder model in your project you should get an automatic F. Haha

    Ah, man...NOW you tell me???

    Like I said, I haven't gotten to the financing part of the class yet, but I've studied the preorder fiascoes on this site, and it does make me wonder how a future boutique company could bring a new pin to market. JPOP used his influence to raise a bunch of money but clearly had no idea how to run the business end of things. No marketing? No communicating with your customers [honestly]? On top of everything else, Stern has a solid marketing team and active social media. The trust and information are always well established so you feel confident dropping $5000+ on their games. I haven't really seen any of the boutiques do this yet...I mean, I see them attacking parts of the puzzle while neglecting others.

    (Of course, spoken as an outsider)

    Kickstarter is mentioned in the class as being a source of raising funds because it's worked for so many companies, but again, pinball ain't going to be that trusting anymore. Or maybe the trick isn't trying to get people to buy the game in advance, but simply trying to raise startup funds to reach a milestone, such as the prototype? So funders/investors are getting something other than a finished pinball machine in the early stages.

    #13 5 years ago
    Quoted from keithm:

    Designer
    Artist
    Engineer-type
    Programmer
    Sound designer/composer (the one area I understand, as I've been freelancing for video games for a number of years)
    Manufacturing team
    Marketing (my day job...)

    Looks like you're missing a role who would be doing your animations for the game? Don't worry most people overlook the dot's/animator guy.

    #14 5 years ago
    Quoted from DaWezl:

    Is the purpose of this exercise to create a seriously viable case for a legitimate business opportunity? Or is it to demonstrate that you understand the different variables that go into running a business?

    Both, though I think the latter is more realistic. Each project presents to the class whether or not they'd seriously pursue their business opportunities in the final class.

    Quoted from DaWezl:

    Probably the most significant barriers to entry in the pinball industry (besides $$) are the design complexities--there are artistic, mechanical, electrical and technological challenges that all have to be worked out in tandem with each other. The dirty little secret that business schools never like to talk about is how often you have to deal with uncertainty.

    That's what I like about this class, which focuses on concepts of lean launch. Instead of saying, "This is my business, it will cost this much and profit THIS much...now I will execute my business plan!" we're focusing more on exploring the opportunity, testing your ideas with customers, having those ideas fail early and often, so you can do it with the least risk possible.

    I guess I'm technically following that by asking questions and getting mocked (bring it on ). Where a few years ago I might have said hell with it, I'm going to sell everything to build my dream pinball machine and go broke, I explore the market, test ideas, spend way less to determine whether I should invest way more.

    Great insights, thanks for sharing!

    #15 5 years ago

    The focus should be what steps it takes to start a pinball business. Going from zero to pinball manufacturing = fail.

    Build a related business first (machine operation, furnature manufacturing, game development, web/software development, or whatever). Those business will have a substantially easier time getting funding.

    Have a 5 to 10 year road map that shows how that business will shift towards redemption and ultimately pinball manufacturing.

    Pinball manufacturing is more complex then people give it credit for. None of the manufacturers started out just building them. They all had a successfull business (or 2) that fed pinball dev or outright bought an already operating pinball business.

    #16 5 years ago

    When you figure out how to make it work and get money to build games, let Riot know the secret.

    #17 5 years ago

    What the teacher really wants to see you do, is how you overcome business problems. Showing something that is well thought out will get you a easy "A+" Simply, create a problem regarding pinball manufacturing and solve it (which should be easy, since you can create your own facts regarding the situation). Something like, selling direct vs distribution or solving licensing issues. If you can explain why and how you came to your solution, the teacher will know you understand the business game.

    #18 5 years ago

    You will also find a lot of real world tips in the movie Back to School with Rodney Dangerfield. Yes its a comedy and yes they are trying to be funny but the info is real world and stuff you don't get in "Business class" Check it out.

    #19 5 years ago

    I would think that without some form of tie to the industry already it would be VERY hard to start a pinball company from scratch. There are only a few parts manufacturers (coil stops, sleeves, prawls etc) and I would think that if you really had enough backing to pose a threat to Stern or JJP etc those big companies could put pressure on the smaller parts manufacturers to basically make life difficult for you or refuse to do business.

    Good luck its an interesting case study

    #20 5 years ago
    Quoted from LTG:

    First thing you'd need is lots of money.
    Then the rest of your list.
    LTG : )™

    Now I understand Pre-Orders.... lol

    #21 5 years ago

    As an exercise, I think you may want to decide the size of business you want to move towards. If you plan to stay at 100 to 300 machine runs, you could model your exercise on a small shop like Spooky. If you want the business to grow to 1000+ machine runs then you need to consider the infrastructure this would take and you could model your exercise on JJP or Heighway.

    You could learn a lot and impress your teacher by contacting Charlie at Spooky, Andrew at Heighway or Jack at JJP for an informational interview from a direct source.

    #22 5 years ago

    If you want to pick the brain of somebody's who's in the process of growing a pinball company from nothing to something, email me. I'm happy to chat.

    gstellenberg@multimorphic.com

    - Gerry
    http://www.multimorphic.com

    #23 5 years ago
    Quoted from pinstor12:

    call john popadiuk?

    too soon!

    #24 5 years ago
    Quoted from Linolium:

    The focus should be what steps it takes to start a pinball business. Going from zero to pinball manufacturing = fail.

    I agree. So does the teacher, who has stressed he doesn't really care about our ideas. He wants to see how we evaluate our business model.

    Quoted from Linolium:

    Build a related business first (machine operation, furnature manufacturing, game development, web/software development, or whatever). Those business will have a substantially easier time getting funding.

    You really think it has to be a related business first? I see how that worked for Jack because he started by selling machines, right? I'm trying to imagine, say, a business learning how to grow food before opening a restaurant. Maybe not the best analogy, but if you have a solid business plan to build pinball, can assemble the team, put a solid marketing plan into place, why couldn't you make it happen? Well, money, I suppose.

    I've thought about altering my business model to make a pinball video game instead of a physical one, but then the whole thing gets chaotic because as far as I've researched, folks who like regular pinball aren't necessarily fans of virtual pinball.

    #25 5 years ago
    Quoted from Eddie:

    You will also find a lot of real world tips in the movie Back to School with Rodney Dangerfield. Yes its a comedy and yes they are trying to be funny but the info is real world and stuff you don't get in "Business class" Check it out.

    Hell yeah, that movie rules! Saw it in theaters back in the day and caught it on cable several months back. Watching the clip above was cool, not realizing how spot on it was for comedy.

    #26 5 years ago
    Quoted from Jvspin:

    As an exercise, I think you may want to decide the size of business you want to move towards. If you plan to stay at 100 to 300 machine runs, you could model your exercise on a small shop like Spooky. If you want the business to grow to 1000+ machine runs then you need to consider the infrastructure this would take and you could model your exercise on JJP or Heighway.
    You could learn a lot and impress your teacher by contacting Charlie at Spooky, Andrew at Heighway or Jack at JJP for an informational interview from a direct source.

    For the exercise I've stayed in the boutique zone of 100-300 machines, holding off on distribution (domestically, at least) until sales could be proven beyond that. That's assuming I had some sort of manufacturing setup in place...ha!

    I've thought about contacting the guys above, but I imagine they're busy...and would probably think I'm some quack out to steal their business.

    #27 5 years ago
    Quoted from Linolium:

    Pinball manufacturing is more complex then people give it credit for. None of the manufacturers started out just building them. They all had a successfull business (or 2) that fed pinball dev or outright bought an already operating pinball business.

    To me, this is where the really interesting question lies. My current project machine was an attempt by Mattel to shift the pinball market from a commercial market to home use. Based on how little I can find about this machine, I'm pretty sure they failed miserably. Was it the cost? I know the price at the time was $500, which was pretty substantial. Was it just the timing? Space Invaders came out almost at the same time and suddenly no one was talking about pinball. Or was it availability of used machines that were better built for equal or less $?

    Some of those same factors are at play today, so how can a new entrant overcome them? Is it by parleying smaller licenses? Print on demand? Focusing on the "best" gameplay? Customization? Significantly lower cost product? In my field, I've seen small competitors come into a relatively mature market, and the ones that succeed have all developed vastly different value propositions compared to existing companies. So what would that proposition be in the pinball industry right now? There's obviously a bunch of companies taking a crack at answering that question, but are there still more "answers" that remain unexplored?

    #28 5 years ago
    Quoted from DaWezl:

    Some of those same factors are at play today, so how can a new entrant overcome them? Is it by parleying smaller licenses? Print on demand? Focusing on the "best" gameplay? Customization? Significantly lower cost product? In my field, I've seen small competitors come into a relatively mature market, and the ones that succeed have all developed vastly different value propositions compared to existing companies. So what would that proposition be in the pinball industry right now? There's obviously a bunch of companies taking a crack at answering that question, but are there still more "answers" that remain unexplored?

    I tried to tackle the value proposition in my survey last month. I think integrating new technologies into the game is a major factor in getting a new company going, but the question is which technology. I pitched a couple ideas I thought might be cool:

    Touchless flippers as a mode...people hated the idea, even as a small part of gameplay.

    Touchpad technology...hated that too, though I didn't specify how that could be used in a game.

    Film or animations in playfield or backglass was a popular, though I think it would depend on such visuals being integrated with gameplay, not just some distraction.

    Ability to influence magnet behavior on ball...also popular.

    Deeper storytelling in the game was another popular option on my survey. Having cool shots, lights & toys are cool, but if the art, sound, and gameplay are in service of a cool storyline the machine could create more buzz and reach a broader audience.

    If I were to take a crack at forming a company at this point in my class, I might invest a little money in some ideas with a designer and artist. Get some concepts down on paper. Then I'd hit up some of the expos, sharing the concepts, getting feedback, building a mailing list. Do the ideas suck? Can they be fixed or improved? Is there enough interest in the ideas to invest in more development? Then I'd work with the team to figure out how to fund that development.

    Maybe the only way a new company to get established is for the leader to pour all of his money into the prototype and shopping it. But I'd want to do epic research before getting to that point.

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