Quoted from pinsanity:Stern already has the infrastructure in place which negates any establishment startup costs. There are going to be very few startup companies able to undercut an established company which holds 95% of the market share and an effective monopoly on all the traditional supplier/distribution channels.
Quoted from pinsanity:As long as Stern keeps throwing out the cheap grade birdseed and preaching to the aviary that this is the A grade product there will always be a percentage of parrots all too eager to keep squawking for more at ever increasing prices and ever diminishing quality standards.
I don't believe that is what is happening here. I see the market leader responding to very real market threats.
At least one new pinball company has shown you can produce very high quality pinball machines that sell for much more than Sterns. Stern went from sole producer to having five competitors who have fielded working prototypes.
JJP and American are mounting challenges that could take real market share from Stern. I've played Dialed In and Houdini, and though I'm probably buying SW I'm buying Houdini too. I'm seriously considering Dialed In.
If Dutch comes through with TBL, they could take more market share. If Heighway delivers on Alien, that's possibly more market share. Multimorphic is a dark horse that could also take market share.
Being the established leader carries different risks. What Stern has that a newcomer does not is a big staff and the salaries that come along with it and the support costs for all their back catalog. They /must/ sell units in volume to stay alive.
Stern is in a tough place. They must sell to a broader market that demands a lower price point, but they also have to offer similar features lest they seem un-innovative and risk letting a startup take market share. Their response has been on multiple levels, and I'm impressed by it. They have demonstrated they can sell at the ~$5k mark through production optimization and owning the entire supply chain while also offering higher end product to take money from JJP.
Recent titles like Aerosmith, SW and even BM66 look to me like Stern is awake and responsive to the competition. I'm seeing their big LCDs get better. SW looks to have some innovations in gameplay, and from the video it looks pretty good, maybe even fantastic.
Quoted from pinsanity:They have no clear succession plan in place, their upper management are all past retirement age and their manufacturing philosophy is controlled by a third party entity with ROI as their primary objective.
I have been thinking about this lately, and I see the succession plan issue as a real risk for them.
However it's not clear to me yet that the investors were a bad idea. Without sarcasm, it's possible that pins were overbuilt and the cost savings they've been able to gain won't matter in the long run. It's possible that moving to surface mount motherboards won't matter to operators and collectors. Pulling playfield work in house seems to be working for them despite a rocky ride there for a while. I can't think of other ways they have cut costs, but insert those here.
And while Aerosmith, AC/DC, GOT and GB are not interesting to me, I can't deny they sold a lot of units with many enthusiasts and super, super high ratings here.
Quoted from pinsanity:Of course milking the market for as much as they can and riding the wave while it lasts is the primary mission.
I don't understand this line of reasoning. I'm pretty sure that's the mission of every company. If you have something that sells, sell a hell of a lot more of it. Repeat until sales drop, keeping a close eye on competitors, introduce innovations strategically.
Or perhaps your implication is that Stern isn't innovating? If they were still putting out monochrome DMD machines without sophisticated LED lightshows and not innovating gameplay, I'd be much more worried for them. But they don't feel like Gottlieb in the 80s/90s to me.
I find these times very exciting for pinball.