(Topic ID: 155483)

Stern: Cost to make a machine

By newpinbin

8 years ago


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    #161 8 years ago

    One critical area that has not been considered is the understanding of licensing costs/programming fees for known trademarked properties.
    This makes a difference in all profit margins from the manufacturing process to the distributors in terms of economic profit.
    It has been this way for any product, pinball or likewise.
    If it is not a licensed theme, the profit margin is immediately higher.
    How much higher is determined by the individual property ownership deal.
    Roger Sharpe is an absolute expert in this area for the past 40+ years.

    Beyond this, individual game distributors do make varying amounts of profit dependent on their personal relationship with Stern.
    Volume "platinum" sellers get better reductions in machine costs for sale, but we are not talking big $$$ here, only in the hundreds, not thousands of dollars. Not all distributors are created equal. The concept of "wholesale price" as applied to pinball machines is not really conducive to the way today's coin operated pinball market operates as Stern is not warehousing machines for stockpile.

    Other factors include material costs variance on economics of industries such as Churchill Cabinet Co, which effect overall profit margins as well. These can change monthly.
    I could list all sorts of aspects which "double down" in to the areas of time, money, and quality in manufacturing of pinball machines.

    This is much too complex to sum up in just a few percentages of value, because the sources would not be understand and people would still be left asking the basic question "why"?

    PinSide speculation, one of life's great mysteries.

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