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Portrait of a Pinball Wizard
Gary Stern entered the business early. Now, as the owner of the sole surviving machine manufacturer, he's the only game in town
Most entrepreneurs dream of building a successful company and one day eliminating the competition. For Gary Stern, that dream became a reality. As president and owner of Stern Pinball, he presides over the planet's sole surviving pinball-machine manufacturer.
In 1932, there were an estimated 150 pinball-machine makers worldwide. Today, Stern Pinball stands alone. Based in Melrose Park, Ill., about 10 miles west of Chicago, Stern has been the only game in town since its remaining competition folded in 1999, making Gary Stern -- its silver-haired, pinball-tie-wearing Willy Wonka of sorts -- the only person keeping this piece of Americana from extinction. "If we ever quit," he says, "that will be the end of pinball."
The game, developed in Chicago around the time of the Great Depression, has come down to this: A single privately held company with 56 full-time employees and revenue of just over $30 million that puts out three or four new models a year. The entire world's supply of new coin-operated pinball machines is limited to the roughly 10,000 that roll off the Stern assembly line each year.
"IT'S KISMET." Stern has been around bumpers and flippers nearly his entire life. In 1961, at age 16, he began working as a stock boy for Williams Electronics Games, a Chicago-based pinball manufacturer. His father, who got his own start in the 1930s as a game operator, ultimately founded Stern Electronics in 1976, and father and son ran the business together, after Gary's stint as an attorney.
In 1986, not long after his dad's company folded, he branched out on his own, selling a business plan for Data East Pinball, and was hired as general manager of the newly incorporated concern. Japanese video-game giant Sega purchased Data East in 1994, rechristening it Sega Pinball. Five years later, Stern bought it himself and put his own name on the shingle. Right around the same time, Williams -- the only other surviving manufacturer and, ironically, the place Stern got his start as a teenager -- was shuttered by its parent company, slot-machine maker WMS Gaming, giving the market solely to Stern.
"For Gary, pinball is absolutely something that's near and dear to his heart," says Roger Sharpe, an industry veteran still employed by WMS and author of Pinball!, which chronicles the game's history. "It's something he believes in wholeheartedly, it's something he has been around his whole life. It's kismet."
HARD TO OUTSOURCE. Stern's 40,000-square-foot facility houses the entire operation under one roof -- from assembly of the machines' large wooden cabinets to a specialty design shop, complete with 3D computer models.
A walk around the factory floor reveals an increasingly rare sight in America: In an age when outsourcing has become the norm and automation takes care of the rest, pinball machines are still made much the same way they were 70 years ago -- by hand. Each contains about 3,500 parts and takes more than three days to construct. "It's a complex game," Stern says.
Stern claims it would be impossible for him to move his assembly plant overseas because "the nature of the product requires it to be near our engineering," and a shift to, say, China would actually increase the cost of making the $4,000 machines. Watching his manufacturing process in action, it starts to make sense. In seconds, specially trained game engineers can walk to the factory floor and examine how their designs look and work in practice -- and make modifications.
The staff is divided about equally between factory employees and front-office staff. In addition, up to 150 temporary factory workers are employed at a given time to meet demand. About 35% of Stern's sales now come from overseas -- primarily in Western Europe but also in growing markets such as Russia and China.
GAME OF SKILL. Pinball has changed a lot over the years. It was banned for decades in cities such as New York, Chicago, and Los Angeles for being a game of chance -- and, thus, a gambling device.
"In Chicago it was banned, amazingly, from 1941 to 1976, and Chicago is where all the manufacturers were," says Sharpe, who testified to the New York City Council in 1976 in a successful attempt to overturn the city's anti-pinball law. "You have, over three decades, these three major metropolitan areas in the United States not having pinball machines."
The advent of flippers in 1947 (before then, players manipulated the ball by "tilting" the machine) placed a new level of control in the player's hands -- a development that would eventually, after years of political wrangling, convince lawmakers that it was a game of skill and therefore should be legal.
BRANDED PROPERTIES. Like the flippers of generations ago, Stern views his company's newest developments -- games that feature Spanish and other foreign-language announcements and dot-matrix animation displays -- as potential milestones. "We think Spanish is important in America," Stern says. "We need to broaden our market."
Every Stern Pinball machine is now a licensed product. Recent models include Elvis, Playboy, and Monopoly. "People are already starting to buy The Sopranos," says Jolly Backer, head of sales at Stern Pinball. That, of course, refers to the newest model, which debuted in the U.S. in February and is based on the HBO mobster series.
"The licensing also gives the game designers a framework within which to develop the game," Stern says. "When we made Jurassic Park, it had a ball-eating dinosaur. Why did it have a dinosaur? Because it was Jurassic Park! It tells you to do that!"
NOSTALGIC HOME BUYERS. Licensed products also allow the small company to tap the expertise of "other creative people," as Stern puts it. "It adds a whole new dimension to it," he says. "Arnold Schwarzenegger did all the speech himself for our Terminator 3 game. All the artwork for The Simpsons was done by the Simpsons people. For Lord of the Rings, the movie company was very involved in telling us which aspects they thought should be in the game."
Even though his outfit has had a virtual monopoly for five years, Stern is quick to point out that he still faces competition. "We compete with all different kinds of games, we compete with movies," he says. "Our market is not pinball machines -- our market is entertainment."
Although sales have remained stable at about 10,000 units a year, the coin-op business has been on a downward trajectory for years. As recently as the early 1990s, the industry churned out more than 100,000 machines annually.
As a result of the decline, Stern Pinball has diversified its operations. Among the additions: "redemption games," in which winners receive tickets exchangeable for trinkets at video arcades. Stern credits the stable sales of traditional pinball machines to increases in nostalgic home buyers, which now account for roughly 20% of total sales -- and the number keeps growing. Stern Pinball doesn't sell machines directly to consumers, instead relying on a network of 33 distributors throughout North America, Europe, and Asia.
LABOR OF LOVE. And what if another company tried to enter the pinball market? "One of two things would happen," Stern says. "One is they would lose all of their money. The second is they might kill us because there's room for one. We're striving towards 10,000 machines a year, our breakeven is 65% or 70% of that. If somebody else came in, they would bring us to breakeven or below -- and maybe kill us both."
"I don't think he's making zillions of dollars," says Jim Schelberg, editor and publisher of Detroit-based PinGame Journal. "But he's making a living and employing a lot of people. He's producing a game that a lot of people enjoy. We all in the pinball hobby are rooting for him."
Stern is the first to admit he's enjoying it. "They teach you in business school that you're supposed to be in love with business, not in love with your business," he says. "But we're in love with our business." Looks like it's not so lonely at the top after all.
WOW! - Bally Pins Are Coming Back
In addition, he also has bought the right to manufacture new games using his company's new hardware system under the Bally brand.
The purchase includes close to 100 different patents as well as ownership of the domains and existing technical content for pinball.com, pin2000.com and pinball2000.com websites to add to the wmspinball.com site he already owns.
Also, effective 12th October 2005, he has the rights to remanufacture original Bally/Williams parts.
The deal means Wayne now owns the original source code to Williams/Bally games and the rights to re-manufacture them and any future games under the Bally brand. The Williams name cannot be used as it is still in use by WMS but access to the source code means any Williams branded game could be manufactured and sold as a game by Wayne's company instead, and all original Bally games can be sold under the Bally name.
Wayne told Pinball News the new hardware and software system he is using for his upcoming games will use original WMS parts and part numbers, which will ensure both familiarity of operation and a continued supply for older games. To this end, the pinball.com site will be revamped to include an e-commerce section listing available parts and allowing buyers from around the world to purchase them direct.
Although an earlier deal granted Illinois Pin Ball the exclusive rights to re-manufacture Williams parts, that contract expires on 12th October 2005 at which point it becomes non-exclusive and Wayne will also have those rights. His purchase includes many CAD files and drawings of parts along with associated documentation and bills of materials. IPB retain the tooling they acquired and 21 unique patents for game assemblies.
The right to use the trademarks is a perpetual licence but the websites and patents have been bought outright by Wayne. He has lots more ideas for the pinball.com site including the return of Ask Uncle Willy in a forum where questions can be asked and answered by the experts.
The purchase raises a lot of questions and even more possibilities, and Pinball News will keep you updated with Wayne's plans and his progress
Last Day Of Month Sale at The Game Gallery
History of the Pinball Machine
The first pinball machines were created in the early 1900's; small boxes that could be set up anywhere for entertainment. They arrived in the technological wave that also gave us records, radio and the first movies; startling a public that had never seen such advances in their own lifetime, never mind in just a few years.
Originally you could only find these small portable games in the amusement parks and the carnivals that traveled around the country, but as time went on they became more popular and could be found in bus stations and the local store.
You wouldn't recognize the game as anything resembling the pinball machine of today, though - there were no flippers! The only way to control the flight of the ball through the obstacles was through brute force - shaking and nudging the machine to get the ball to head where you wanted it to. It even awarded prizes back then, although only worth a few cents or maybe a few pennies if you were lucky.
After the First World War the pinball machine grew more common; with the stock market crash creating more of a demand for this game. Although you would think that a Depression wouldn't be good for any business, one thing all people did have was more time on their hands. During this period board games prospered, as did all games of chance that offered small rewards. It was here that the pinball industry expanded and grew as more and more people sought refuge in a quick cheap game.
Chicago became the self-professed "home" of pinball with the advent of coin-operated amusement machines, making pinball more "professional" and available to the public as these machines crept into any nook and cranny where it could fit.
In the thirties Bally created the first "official" pinball game; a wonderful creation called "Ballyhoo". It only cost one cent to play five balls and was an immediate hit with the public. The entire machine only weighed thirty pounds and was snapped up by businesses for their customers.
The industry exploded after that, with the paintings and the features growing as fast as the inventors could add them onto the machine. During the late Thirties electricity was introduced to the game as well as the concept of having them actually stand apart on their own. No longer trapped to a countertop; the pinball machine leapt across the room and occupied any open space, free of yet another restriction.
The addition of electricity literally shocked the industry. Henry Williams created "Contact"; a pinball game which had two small contact holes with solenoid-powered kickers to make the ball jump out. The bell would ring as the ball leapt out; creating the first sound effect. Solenoids are still used in current games to create the visual effects of the ball dancing around the play area or staying in one place; breaking the law of gravity as the player curses and nudges the machine.
It was only after World War Two that flippers were introduced to the game, giving a whole new depth to this family favorite. Suddenly you could affect the travel of the ball without brute force and with the new sounds and bells added it became the most popular game of the next few decades.
As time went on the machine evolved through many stages; from the addition of multiple ball play to multiple play areas to having even more flippers to manipulate and direct the ball through the barricades and traps that constantly beckoned. The back plate behind the game advertising the topic became works of art, collected by fans and treasured by artists as wonderful creations aimed at a public who was quickly drawn in by the scenarios depicted on the glass.
In the Seventies and Eighties, the pinball machine came in direct competition with the video game, losing fans as they wandered off to the bright pictures and scrolling dialogue that signified the new technological revolution. Many pinball producers, including Bally, took the next step and began to incorporate video games inside the pinball machine.
These hybrids included small movies inside the screen, advertising the scenario as the lights got flashier and the sounds computer-generated. Tying these new machines in with current trends and movies made pinball machines able to compete with the newer video games in the local arcade.
And while the newest video shoot-em-up might attract the youngsters, you'll find many people still wandering to the back of the arcade, hoping to find a Super 8-Ball or maybe a newer X-Files pinball machine, just waiting to be played and offering the ultimate challenge - of true chance, not variables programmed into a computer.
Pinball has grown from an obscure countertop machine to the technological hybrid you see today, and is unlikely to disappear totally as long as there are people still willing to try their luck for a quarter - next time, why not give it a try and see what's kept this game alive and well for over a century!
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Star Wars Episode 1
World Cup Soccer
Harley-Davidson - Sega
Harley-Davidson - Bally
Teenage mutant Ninga Turtles
Phantom of the Opera
Lethal Weapon 3
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European Pinball Championship
Taking place at the Silverstone complex at Zwanenburg near Amsterdam in The Netherlands, the EPC 2005 will feature the Europa Cup tournament where teams of four players from countries around Europe vie to claim the title of European Champions for their home nation.
In addition, there will be an individual tournament running in parallel with the EuropaCup. Individual entrants are limited to 108 and there are currently already 80 players registered so those hoping to take part should sign up as soon as possible.
Both tournaments will be played on a selection of 50 modern games while another batch will be available for recreational play. There will also be a number of vendors selling pinball parts and games.
Although Silverstone is the home of the tournaments this year, in 2006 the German Pinball Association will host the EPC in Munich to make it a truly European event. Other pinball organisations are invited to run it in future years.
The EPC 2005 takes place on the 21st and 22nd May. To register and for more details go to the EPC website.
PAPA 8: World Pinball Championships
PAPA 8 will be held August 11-14, 2005! Only 135 days left! Total prize package more than $33,000! Players of all skill levels are welcome. It's fun just to come watch or play the practice machines. PAPA 8 is the only major pinball event in the USA dedicated to competitive tournament play, and it's terrific fun you can hardly find anywhere else.
Hotel and travel details are available, as well as online registration.
You may wish to read about our past tournaments using the links to the right.
Have Questions? Send us Email!
Remember, players of all skill levels are welcome and are eligible to win!
Fury North Florida Tour Belongs to Aquino
Aquino, who leads in points in both the North and Central Florida tours, reached the hot seat match with five straight wins, including a 7-3 victory over Daniel. His hot seat opponent was David Ross, who had also breezed through the bracket. Both players made a stand, but Ross came out on top 7-5.
Meanwhile, in the one-loss side, Daniel was attempting to put together a run of his own, but Nate Hyward came out on top of their hill-hill battle. Next up for Hyward was Aquino in the semifinals, and Hyward, too, was looking for a little revenge, as his only defeat had come from Aquino in the opening rounds. But, again, Aquino was too strong, sending Hyward home with a third-place finish 5-3.
Aquino and Ross' rematch in the finals was bound to be intense, and they definitely lived up to that expectation. After Ross jumped out to a 4-1 lead, Aquino started to chip away, breaking and running the next game, followed by four more wins to take the lead at 6-4. The comeback didn't slow Ross down, though, as he took the next three games to regain the lead. After trading the next few games, the match reached hill-hill, with Aquino breaking and sinking two balls in the decisive rack. With no clear shot on the 1 ball, he and Ross decided to trade safes, but a few shots later, Ross watched as the cue ball slowly crawled right past the 1, giving ball in hand to Aquino. After he made the 1, Aquino lined up the 2-9 combo for the victory.
Results: 1st Julio Aquino, 2nd Dave Ross, 3rd Nate Hyward, 4th Tim Daniel, 5th Dave Foreman, Bryant Pinkley, 7th Robert Main, Richard Abrams
Thirteenth Annual Super Billiards Expo Begins
The 2005 Super Billiards Expo is underway in Valley Forge, PA, for its thirteenth year. A full field of 64 pro players has gathered for the Brunswick Pro Players Championship, which began March 17, 2005, and hundreds more hopeful amateur players have come for the other eight events, including the TAP League’s Rally in the Valley. Additionally, the artistic pool competition began today with an international star-studded field.
The pro event is a race-to-10, alternating-break format, with most of the top UPA players present, in addition to the local names. A consistent top finisher at this event, Jose Garcia, met Charlie “The Korean Dragon” Williams in the first round. Though Williams took a four-game lead at 6-2 against the New Jersey room owner, Garcia slowly turned the match around until he wrangled a hill-hill victory. He will meets Josh Brothers in the Friday evening round.
Pinball Super Sale at The Game Gallery
Lord Of The Rings Musical
Published 50 years ago, J.R.R. Tolkien's mystical adventure trilogy has been discovered by a new generation through Peter Jackson's Academy Award-winning trio of films, which have grossed more than $3 billion around the world.
Video Games Put On Defensive
As the electronic entertainment industry prepares to defend itself in that case, Rep. Joe Baca, D-Rialto, is lobbying for his second piece of legislation targeting games this time a call to re-evaluate the rating system designed to keep violent games out of children's hands.
Critics also are seeking a connection between video games and this week's school shooting in Minnesota. The shooter reportedly was an avid gamer, but no official connection has been made.
The $11 billion industry is taking its turn on the spit of public opinion, roasting on the same fire that left scorch marks on works of literature, some musical genres, and movies, the article concluded.
"It's just the newest political football for everyone to play with,” Lawrence Walters, a Florida-based First Amendment lawyer whose firm often defends the video game industry, said in the article. “Neither side plans to drop the ball.”
“Columbine is to video games what 9/11 is to terrorism,” said Jack Thompson, a longtime critic of the game industry, who was quoted in the article..
The Miami-based attorney is bringing the more than $600 million lawsuit against four companies for letting the Mature-rated games "Grand Theft Auto III' and "Grand Theft Auto: Vice City' get into the hands of then 16-year-old Devin Moore, who is accused d of fatally shooting three men and stealing a patrol car after the shootings in Fayette, Ala. His trial on murder charges starts in July.
But recent court rulings have favored the game industry. In 2001, the wife of slain Columbine teacher Dave Sanders sued 25 gaming companies, including Nintendo of America and Sony Computer Entertainment, seeking $5 billion in punitive damages. The suit was dismissed in March 2002 by U.S. District Judge Lewis Babcock in Denver.
Another lawsuit that was dismissed concerned the Paducah, Ky., school shooting where 14-year-old Michael Carneal shot at a student prayer group at Heath High School in 1997, killing three students. Nintendo, Sega and Sony were among those named in the $33 million suit.
The article pointed out that legislators have kept an eye on the game industry for years, with people including Sens. Joe Lieberman, D-Conn., and Hillary Rodham Clinton, D-N.Y., attempting to call out the industry on its content.
In the past, the battle has been focused on control, with various bills proposed to prevent the sale or rental of heavily violent games to minors.
One of the more recent cases is International Digital Software Association v. St. Louis County (Mo.), in which a St. Louis County ordinance that barred minors access to video games with "graphic violence' was struck down by the 8th U.S. Circuit Court of Appeals in St. Louis.
California Assembly Speaker Pro Tem Leland Yee, D-San Francisco, also is pitching a bill that would make the sale or rental of violent M-rated games illegal, along with a label that reads, "This game may not be sold to anyone under 17 years of age.”
In 2002, psychology professor Jonathan Freedman analyzed all the research done on the subject in his book, "Media Violence and Its Effect on Aggression,' and concluded that no such link between video game violence exists. Freedman even goes on to say that there haven't been well over 1,000 studies it's more like 200.