# Gary Stern 75th Birthday Interview - Part 2

**Source:** Pinball News & Pinball Magazine Pincast  
**Type:** podcast_episode  
**Published:** 2020-06-14  
**Duration:** 89m 3s  
**Beat:** Pinball

**URL:** https://podcasters.spotify.com/pod/show/pinball-industry-news/episodes/Gary-Stern-75th-Birthday-Interview---Part-2-eidsvm

---

## Analysis

Gary Stern discusses the founding and evolution of Data East Pinball (later Sega, then Stern Pinball) in a 2.5-hour retrospective interview. Key topics include Pinstar's formation with Steve Kirk, reverse-engineering Williams circuit boards while programming from scratch to avoid copyright infringement, the strategic shift to licensed titles beginning with Playboy, Data East's financial struggles leading to Sega's acquisition in 1994, and the company's survival through 2008-2009. Stern emphasizes the importance of segmenting markets (commercial operators, enthusiast collectors, and casual rec-room buyers) and the evolution from operator-dominated to home-collector-significant business models.

### Key Claims

- [HIGH] Pinstar was founded by Gary Stern and Steve Kirk (among others) as a short-lived venture focusing on layout design simplification — _Gary directly confirms: 'Yeah. Amongst others? Yeah. only a month it was Steve and I and he was going to design but really layout design work was really a matter of simplifying'_
- [HIGH] Data East Pinball was founded in 1986 with Data East Japan/USA as original investor; Bob Lloyd (Data East USA manager) was key stakeholder — _Gary states: 'In, what was that, 94? Again, the company started in 86, really getting somewhere in 87' and 'Bob Lloyd was running it, and he was intrigued with the idea of a product that didn't come from Japan'_
- [HIGH] Williams circuit boards were reverse-engineered for Data East Pinball, but all software was written from scratch by Richard Denton (Free Radical Technology/Incredible Technology) to avoid copyright infringement — _Gary explains: 'Richard programmed from scratch the system. He did not look at, and he was very careful not to look at, any of the code that was in a Williams game' and 'The circuit boards, you're allowed to, you know, that's totally permissible'_
- [HIGH] Williams sued Data East Pinball and Gary Stern personally multiple times; all suits were settled, never won by Williams — _Gary: 'remember over the years William sued the company and me personally a number of times yeah um do they ever win it seems always gets settled yeah no no interestingly enough'_
- [HIGH] Data East sold the pinball division to Sega in 1994 to bail out the parent company's financial difficulties, not due to debt owed — _Gary: 'Data East was having some financial difficulties, so they decided that they would sell the pinball company to put money to Data East. because they didn't want to just put money in'_
- [HIGH] Gary Stern purchased Stern Pinball back from Sega because Sega wanted a related business that fed into their core operations, which pinball did not — _Gary: 'typically we were buying, well, we were. We were buying nothing from the parent company in Sega' and 'they didn't want to fund us uh and uh you know they gave they left some funding in show he said but they didn't want to fund us uh and uh they didn't want to close us so i bought it from them'_
- [MEDIUM] George Gomez/Shelley Jones (spelled 'Shelley' and 'Camico' in transcript) were instrumental early collaborators at Data East, presenting to investors alongside Gary — _Gary: 'Camico and I, Shelley downstairs, we had two desks next to each other there, and Camico and I made a presentation' — transcript appears to use multiple name variations_
- [HIGH] Licensing model shifted from original titles to licensed titles starting with Playboy 35th Anniversary, becoming standard practice after that — _Gary: 'So Playboy 35th came along, and after that, it was basically licensing with every title. Yeah, well, Checkpoint wasn't licensed'_
- [HIGH] Licensing contracts have grown dramatically in complexity: early Jurassic Park contract was 12 tight pages; current contracts are 72+ pages — _Gary: 'My first Jurassic Park contract versus the current Jurassic Park contract are night and day. Twelve tight pages. Like a letter. And now it's huge'_
- [HIGH] George Lucas's negotiation for ancillary rights after Star Wars fundamentally created the modern movie licensing industry worth billions — _Gary: 'I always say that this was created largely by Lucas. When he, after the first Star Wars movie, and he went to see this guy Ladd, who was head of the studio, and said, okay, you owe me money. Why don't you just give me the ancillary rights?'_

### Notable Quotes

> "If you make a stuffed animal that looks like a mouse, you're not going to sell it unless you pay Walt and Mickey Mouse. So it gets the first attraction, and we say the first quarter, whatever. It also gives the designer four corners within which to design."
> — **Gary Stern**, ~1:15:00
> _Core explanation of why Stern Pinball shifted to licensed IP strategy and how licensing provides both commercial and creative benefits_

> "If I call somebody and I say, I've got zombies from hell, they're going to say, the customer's going to say, send me two or three and I'll see what they look like and I'll test them and so forth. But if I say I got The Walking Dead, they say send me a container. You know, here's $200,000, $400,000, $200,000."
> — **Gary Stern**, ~1:10:00
> _Illustrates commercial advantage of licensed vs. original IP to operators and distributors_

> "I'm not an EE, I'm a lawyer. And it was like I turned on a light for him because this electronics engineer from Japan up to that point thought I was the dumbest electronic engineer I've ever met. And he now thinks I'm the smartest lawyer he ever met."
> — **Gary Stern**, ~40:00
> _Anecdote about legal expertise becoming unexpectedly valuable during reverse-engineering phase; humorous but demonstrates importance of legal knowledge to company survival_

> "We were buying nothing from the parent company in Sega. We were shipping no profit by buying their games or making profit. It's stuff that comes from them. And they're always concerned with the Japanese typically are concerned with the Japanese parent company."
> — **Gary Stern**, ~1:40:00
> _Explains why Sega lost interest in pinball division and why Stern was able to buy it back_

> "The marketplace is certainly, you know, we have, in fact, when Dave came in here, I said to him, you know, coming and looking, I said, you know, I'm the commercial guy and I've been running a commercial game business and we have developed and are developing a, you know, a large home segment."
> — **Gary Stern**, ~2:00:00
> _Acknowledges fundamental business model shift from operator-dominated to home-collector-significant market, timing around Dave Peterson's 2008-2009 arrival_

> "One size does not fit all. So they need different products the pro is often good for the enthusiast collector but it's mostly you see for operators and for rec room buyers."
> — **Gary Stern**, ~2:10:00
> _Explains three-tier (Pro/Premium/LE) and three-segment market strategy and product differentiation philosophy_

> "We really believe that this market exists and it will introduce more people to pinball and some of them will move on to become enthusiasts, collectors, competitors, whatever. But that's, you know, again, we, you know, this is this game is fun and we're trying to expand its reach."
> — **Gary Stern**, ~2:25:00
> _Explains investment in lower-priced PIN model as funnel strategy to grow enthusiast base, not just casual rec-room buyer segment_

### Entities

| Name | Type | Context |
|------|------|---------|
| Gary Stern | person | Founder of Stern Pinball, former lawyer, CEO; throughout interview reflecting on 75-year life and pinball industry career spanning Data East (1986), Sega Pinball (1994-1999), and Stern Pinball (1999-present) |
| Steve Kirk | person | Co-founder of Pinstar with Gary Stern; described as 'great game designer' who designed Stars and Meteor 9-ball for Pinstar; worked with Bally later |
| Shelley Jones | person | Early collaborator at Data East Pinball (also referenced as 'Camico' in transcript); worked alongside Gary Stern on investor presentations and company foundation |
| Bob Lloyd | person | Manager of Data East USA; key stakeholder who recognized value in non-Japan-origin pinball product and supported initial investment in Data East Pinball |
| Richard Denton | person | Programmer at Free Radical Technology (later Incredible Technology); wrote Data East Pinball operating system from scratch to avoid Williams copyright infringement |
| T. Fukuda | person | Head of Data East Japan; vice president of JAMA (Japanese Amusing Machine Association); made pitch presentation visit to Gary Stern's townhouse during investment phase |
| David Schoenberg | person | Gary Stern's attorney and dealmaker since 1976; key figure in Sega acquisition and company restructuring; since passed away; known for facilitating contact between Gary Stern and Dave Peterson |
| Dave Peterson | person | Joined Stern Pinball 2008-2009 during financial crisis; helped company 'right-size' and return to profitability; represented significant leadership/strategic shift for company survival |
| Data East Pinball | company | Pinball division founded 1986 by Gary Stern with Data East Japan/USA as investor; pioneered DMD technology and licensed titles; sold to Sega in 1994 |
| Sega Pinball | company | Renamed Data East Pinball division after Sega acquisition in 1994; provided capital and manufacturing scale; exited pinball business late 1990s when Gary Stern repurchased division |
| Stern Pinball | company | Founded 1999 after Gary Stern repurchased operations from Sega; currently largest active pinball manufacturer with three-tier product line (Pro/Premium/LE) and three market segments (commercial operators, enthusiast collectors, rec-room buyers) |
| Pinstar | company | Short-lived pinball company founded by Gary Stern and Steve Kirk; focused on game layout design simplification; produced games with Steve Kirk designs before Stern's focus shifted elsewhere |
| Williams Electronics | company | Historic pinball/arcade manufacturer; sued Data East Pinball and Gary Stern personally multiple times over circuit board reverse-engineering and patent issues; all lawsuits settled, never won |
| Free Radical Technology | company | Company founded by Richard Denton and Elaine Denton; later became Incredible Technology; programmed Data East Pinball operating system from scratch |
| Joe Kaminkow | person | Co-founder of Data East Pinball alongside Gary Stern; historically significant in founding narrative, though limited direct mention in this interview |
| George Lucas | person | Referenced as creator of modern movie licensing industry; negotiated ancillary rights deal after first Star Wars film that set precedent for billions in licensing revenue |
| Frank Ballew | person | Industry figure with old Harley motorcycle (1993 model) that Gary Stern now owns and maintains; mentioned in context of collector hobby passion |
| Ladd | person | Head of studio (implied Fox) during Star Wars era; authorized George Lucas's ancillary rights deal |

### Topics

- **Primary:** Data East Pinball founding and early operations (1986-1994), Technical and legal strategy for reverse-engineering Williams boards while avoiding copyright infringement, Licensing model evolution: original titles to licensed IP strategy (Playboy 35th onwards), Sega acquisition of Data East Pinball (1994) and financial/business rationale, Gary Stern's repurchase of Stern Pinball from Sega (late 1990s) and company independence, Market segmentation strategy: commercial operators, enthusiast collectors, and casual rec-room buyers, Three-tier product line (Pro/Premium/LE) and pricing strategy
- **Secondary:** Williams lawsuits and patent disputes with Data East Pinball

### Sentiment

**Positive** (0.78) — Gary Stern speaks fondly of company history, employees, and survival through challenges. Tone is reflective, proud of accomplishments, and philosophical about market evolution. Some mild frustration with licensing complexity and IP protection trends, but overall celebratory retrospective. Interviewer is appreciative and respectful.

### Signals

- **[business_signal]** Company survival through 2008-2009 financial crisis was tenacious and strategic; Dave Peterson's arrival coincided with critical restructuring and 'right-sizing' that enabled long-term stability (confidence: high) — Gary: 'certainly they could have flushed us then...we showed them why it would have been unwise we 2008 remember Dave Peterson came in in 2008-2009 really and we worked very hard to get in a position for that'
- **[business_signal]** Sega Pinball exit was strategic mismatch: Sega preferred vertically-integrated businesses buying from parent company; pinball division was independent profit center that didn't feed Sega's core operations, leading to divestiture (confidence: high) — Gary: 'typically we were buying, well, we were. We were buying nothing from the parent company in Sega...Japanese typically are concerned with the Japanese parent company...they want a related business where it's buying from them'
- **[business_signal]** Stern Pinball shifted from operator-dominated to significant home-collector business model, acknowledged as fundamental market transformation requiring new product strategy and market segmentation (confidence: high) — Gary states: 'when Dave came in here...I'm the commercial guy and I've been running a commercial game business and we have developed and are developing a, you know, a large home segment' and 'The marketplace is certainly, you know...it's not just enthusiasts. We also have the rec room buyer'
- **[competitive_signal]** Three-tier market segmentation (commercial operators, enthusiast collectors, rec-room buyers) with differentiated products (Pro/Premium/LE) was critical survival and growth strategy (confidence: high) — Gary: 'one size does not fit all. So they need different products...We have three segments and one size does not fit all' and 'I think it's been a significant part of our business and an important part of our business to make the kind of games that we do'
- **[licensing_signal]** Licensing contracts have become dramatically more complex and restrictive; from 12-page letter-format contracts to 72+ page formal legal documents with large corporate licensing departments (confidence: high) — Gary: 'My first Jurassic Park contract versus the current Jurassic Park contract are night and day. Twelve tight pages. Like a letter. And now it's huge. So licensing has become very, very important.'
- **[licensing_signal]** Modern IP holders are highly protective and controlling; early licensing era had 'carte blanche' approval; current era requires extensive vetting, legal frameworks, and licensee approval power (confidence: high) — Gary: 'Back in the old day...they'd be really flattered and they'd give you, basically, carte blanche...Whereas that's not exactly the case now...They have big licensing departments where contracts used to be 10, 12 pages...They're now 72 pages'
- **[market_signal]** Licensed IP provides both marketing advantage ('first quarter' attraction) and creative constraint ('four corners' for design) compared to original titles; licensing now standard practice (confidence: high) — Gary: 'If you make a stuffed animal that looks like a mouse, you're not going to sell it unless you pay Walt and Mickey Mouse...It also gives the designer four corners within which to design'
- **[product_strategy]** PIN (home-only lower-priced pinball) strategy is designed as funnel to introduce casual players (rec-room buyers) with goal of converting some into enthusiasts and collectors (confidence: medium) — Gary: 'We really believe that this market exists and it will introduce more people to pinball and some of them will move on to become enthusiasts, collectors, competitors, whatever'
- **[technology_signal]** Data East Pinball developed operating system entirely from scratch rather than reverse-engineering Williams code to avoid copyright infringement liability (confidence: high) — Gary: 'Richard programmed from scratch the system. He did not look at, and he was very careful not to look at, any of the code that was in a Williams game. And had he looked at it and used it, somewhere there would have been fingerprints.'

---

## Transcript

 Gary Stern 75th birthday interview part 2 are having an exclusive in-depth interview with Gary, which in total ran over two and a half hours. So we split it up into two parts, and we'd like to welcome you to part two, and we'll just pick up where we left off. Enjoy. Okay, well, you were talking about Pinstar earlier, and do you want to tell us how that company started up? Because didn't you start that with Steve Kirk? Yeah. Amongst others? Yeah. only a month it was Steve and I and he was going to design but really layout design work was really a matter of simplifying first of all Steve was a great game designer an unusual individual but a great game designer if you remember he did Stars and Meteor nine ball and then he did some stuff with bally years later um but those were the ones he did with me and they were all very good and successful games coincidentally uh movie companies keep calling and wanting to use a meteor in their in their movie and i said fine with me but you got to get hold of and nobody can find out who owns the rights to that you got to get hold of the That's a Sean Connery movie. And I think it was Universal at one point. But that's a licensed title. Right. Is it really? Yeah. I didn't know that until recently when I found that out. Go look it up. It's worth reading about. Look it up on IMDB. Right. so um um so often it was one of the licensed title that we didn't make back in those days um we went to see and said and this is a cult movie it's a classic now but when we went to see in the theater we you know we just what is this blade runner and what a great movie it is but in those days, we went to see it, and, you know, it was the original cut of it, which was different, and it was, oh, my God, you know? Ridley Scott, yeah. Yeah. There's still time to correct an error if you want to. Yeah, well, you can do Aliens and other movies from that era. Yeah, Blade Runner. And Blade Runner's been made enough times anyway. The era that is popular is largely, you know, 80s are ghostbusters. 80s are cool. Right. So in 86, you started, or Data East sort of got involved with Pinball. They were our original investor. Right. Shelly Jones. How was that process? Can you talk us through how that company became interested in pinball in the first place and then assigning you as the head of it? Well, it was my business plan, and I went to them. And they were intrigued. Remember, don't remember. Let me start from the beginning. Data East, Japanese company, owned, like most of Japanese companies, a U.S. subsidiary in California. So Tokyo owned Data East USA. And Data East USA was intrigued. Bob Lloyd was running it, and he was intrigued with the idea of a product that didn't come from Japan that he had more control over and that he could sell worldwide instead of just in the U.S. because he was selling Japanese video games here. And so, you know, I had a business plan, and I think with the help of Ed Pellegrini, I approached them. I approached Data East. In fact, Mr. Fukuda, T. Fukuda, came to my townhouse, and Camico and I, Shelley downstairs, we had two desks next to each other there, and Camico and I made a presentation and I made most of it. Camico came up, you know, and so forth, and we intrigued them into investing in this pinball company. And did you take that idea to other companies as well? Or was it DataRece the only one that ticked all the boxes for you? Well, I can't say that we didn't kick it around a little bit, but let's just say it was mostly Data East. Right. And what was the sort of, what was the pitch, shall I say? How could Data East get their foot into the market, which was so dominated by Williams, Bally and Gottlieb at that time? um Data East as a video game as a coin-op company when it had pinball it had pinball it had fighting games and video and it had redemption which often they got from Namco so with pinball it became a full-line company right and once again Lloyd Bob Lloyd good businessman was interested in having a product that didn't come just from Japan that he wasn't limited in his sales just here we sold games back to Japan yes and you know so it all made sense to them right so it was probably the work of a great salesman no i'm just kidding but at that point you had to start basically all over again with a factory inventory and everything uh because yeah i'm sorry so so um one of the key things that you probably need is uh you need an uh an operating system for these pinball games Is it correct that you reverse engineered a Williams system? No. No, we reversed engineered parts of the printed circuit boards. And that would have been, and Data East, that's the one thing that they did to help us. They had EEs, and they worked with us doing that. And, in fact, you know, one of their EEs was here, and I would be talking to them through a translator. and one day I said, you know, it said, you know, look, I'm not an EE, I'm a lawyer. And it was like I turned on a light for him because this electronics engineer from Japan up to that point thought I was the dumbest electronic engineer I've ever met. And he now thinks I'm the smartest lawyer he ever met. but it's against the law to, especially in Illinois at that time, to dump and copy, you know, the copyrighted code. So Richard and Elaine Denton were free radical technology, which later became incredible technology. And Richard programmed from scratch the system. He did not look at, and he was very careful not to look at, any of the code that was in a Williams game. And had he looked at it and used it, somewhere there would have been fingerprints. There would have been some little routine that would have come right from it. So he did it from ground up. Right. But the circuit boards were reverse engineered, shall we say. Yeah. But the code was all written from scratch. Yeah. The circuit boards, you're allowed to, you know, that's totally permissible. You know, there's copyrights on drawings, but not the boards themselves. In any event, you know, that part is permissible. The software, no. no no no no in all this would you say that your law studies were helpful in determining what you could and couldn't do well they were real helpful in knowing the right patent counsel to go to to make sure that we kept things straight and I did and remember over the years William sued the company and me personally a number of times yeah um do they ever win it seems always gets settled yeah no no interestingly enough and the last time it was settled uh uh their lawyer said it's a shame a shame that you uh didn't have uh insurance well lawyers tend to put in everything they can every claim they can and uh he would put in a false advertising claim and we had false advertising insurance so yeah it's good part of the good part of was of you know hundreds of thousands of dollars was paid by a legal fees was paid by our insurance company but he never did that he's since passed away also so you've you've got your new company you've got a new factory um was it was it one factory at that point or did you have did you have the the second one well you know we started out in temporary space over on Peterson Avenue in a 300,000 square foot building that was being torn down. And so we had one, two offices, two rooms in it, and it had a big indoor area. It could have been a factory, so I still have next to me a football, American football, that we used to throw around there. So, yeah, we, and then we moved, we found a place, a 25, 24, 25,000 square foot factory in Melrose? Melrose Park. Later we had another 24,000 square foot factory at the end of the block. We did some storage in a 40,000 square foot factory. Ultimately we moved into that 40,000 square foot factory. That's where we lived for many years until we came here with 110,000 square feet. I remember visiting when you had the two buildings. Yeah, yeah. launching the company with that. Originally, we were going to license Lasertag and weren't successful in doing it. In my office, I have a pinball by Stern and I have a Laser War sitting right here. And it was, I think Chemical came up with the idea for it because it was hot and we made Laser War. and that was one of the few times I told him to put more parts on the game because he had one branch and I said you need another one so I have a third game in my office I have a big box sitting here with the last that we have of Beatles Diamond here and they were afraid of shipping it so I said well put it in my office and now the damn thing's sitting here in a box. So that's much later on, of course. So Laser War was going to be Laser Tag, and that would have been a licensed title. But then you did, what, Secret Service, Torpedo Alley, and I guess Time Machine, which all ended up as being original titles. Were any of those ever thought of being licenses? Because after that, you did move into licensing. Yeah, I don't think that they were. You know, some licensed music in them. Yeah. Yeah. But I don't think so. Right. I get a little fuzzy on all this. Right. But then, so, Playboy 35th came along, and after that, it was basically licensing with every title. Yeah, well, Checkpoint wasn't licensed. True. very sharp. I don't think there's another one in there. I don't think so, but there might be one more. I don't think so, though. So why go licensing? What was the switch from going on original titles and going, hang on, licenses are much better, let's do all our games that way, except checkpoint? Yeah, they are. They are better. And they are difficult. it's expensive not only for the license but the design. You know, you're playing with somebody else's football, and you've got to satisfy them, and you've got a lot of back and forth. But, you know, a couple things about it. Again, you guys too have heard me say this. If you make a stuffed animal that looks like a mouse, you're not going to sell it unless you pay Walt and Mickey Mouse. So it gets the first attraction, and we say the first quarter, whatever. It also gives the designer four corners within which to design. It gives them ideas. There's a ball-eating dinosaur on the first Jurassic and a better ball-eating one now because Crichton made a dinosaur theme in the book. in Tales from the Crypt there's a great scene in the dot matrix of somebody being cut in half with a tape and I happen to know as original as I think that is of our designers to come up with that, that happens to be Joe Pesci I've seen that episode where he was cut in half it was the episode there were twin girls and they couldn't decide which would get them, so they cut them in half. So any event, twin women. So it gives you ideas, and it also puts you in contact with somebody who's not in the pinball ivory tower but looks at things different. So there's a lot of pluses to doing it. If I call somebody and I say, I've got zombies from hell, they're going to say, the customer's going to say, send me two or three and I'll see what they look like and I'll test them and so forth. But if I say I got The Walking Dead, they say send me a container. You know, here's $200,000, $400,000, $200,000. Right. But you've been doing licensing for so long now. Obviously not the first thing people do, but you've been doing it for, well, since Playboy, I suppose. And how has Playboy and Robocop and those early games, how has the licensing model and the relationship with licensors changed? to these days when you're doing things like Stranger Things and Teenage Mutant Ninja Turtles. Back in the old day, you know, if somebody wanted, if you said, I want to make a pinball machine of this movie or this actor or this band or whatever, they'd be really flattered and they'd give you, basically, carte blanche and do whatever you wanted with it. Whereas that's not exactly the case now. Yeah, no, I wouldn't go quite that far, but you're right. It's exceptionally, not total carte blanche, But it's exceptionally more recent. They have big licensing departments where contracts used to be 10, 12 pages tight, double spaced sometimes. They're now 72 pages with a printed format to them. As I say, big licensing departments. My first Jurassic Park contract versus the current Jurassic Park contract are night and day. The whole thing was night and day. Twelve tight pages. Like a letter. And now it's huge. So licensing has become very, very important. And actually, I always say that this was created largely by Lucas. When he, after the first Star Wars movie, and he went to see this guy Ladd, who was head of the studio, and said, okay, you owe me money. Why don't you just give me the ancillary rights? And Ladd called down to his business people and said, well, we don't do much licensing. Fine. So he got the ancillary rights. And that was billions of dollars ago. Billions. So you've got to give him credit for having created a big part of it, movie licensing and what have you. I just wonder whether the person who assigned those rights to Lucas, whether he ever got to hear about that and whether that had any consequences. That's an interesting question. Very interesting question. so obviously you could defer that as that person screwing up on that one and we have a good laugh about it right now obviously I'm not going to say they screwed up about it because he created something you have to know more to say you screwed up about it but basically nobody is perfect, everybody makes mistakes have there been any licenses which seemed like a good idea at the time but in retrospect maybe the market wasn't ready for it or the execution wasn't what it should have been that you think like we should have done that differently or or not at all um i'm sure but i'm sort of at a loss right now as to uh well i understand that you don't want offend any party that you worked with um uh if you're afraid afraid of that i can understand that i can certainly think of one off the top of my head that we maybe shouldn't have done more than once more than once well there's a sense of opportunity you seem to be uh remaking quite a quite a number of your older titles at the moment um yeah there's some you know let's one of the difficulties of remaking a title you have to be a little bit careful and that is I'm looking for something while I'm talking to you at the same time I'm not finding it damn is that you sometimes something so good you don't want to do it again yeah I thought the Jurassic Park was a massive seller for you first time round, but didn't stop you doing it again and making a second success of it. Yep, you're right. You're absolutely right about that. I agree. Perhaps it's a perennial title. Perhaps we'll see a third one at some point. Never know, do you? Well, that brings me, are there any like Data East titles that you think like, maybe we should look into that doing that again like robocop or um i don't know you know i have to say that we you know it's not only is the licensing uh you know uh um uh more complex yeah but also um you've got uh more people here uh uh that are um you know, that are involved in it and so forth. And, you know, part of when you pick a title, you have to find designers. There's some great titles that one might want to do, and I'm certainly not going to mention them because I don't want somebody else to do them, that our designers just don have their creative juices flowing for that Right So you know there always some You know we have three silver bullets a year three cornerstone games So there are more than three titles a year that one might want to do. And you know that we like to do a music title every year, year and a half, that we like to do Marvel stuff. You know, we do movies, we do, you know, TV shows. There's just so much IP that is interesting. Right. But then again, while there's so much IP, but there's also, with every IP there's a challenge. Is it suitable for pinball? Hello Kitty. Oh, yeah, no question about that. No question about that. No question. So we're with Data James Rees Pinball, and then Data James Rees Pinball becomes Sega Pinball. And how did that come to happen? Okay, how did Data James Rees become Sega Pinball? In, what was that, 94? Again, the company started in 86, really getting somewhere in 87. And Sega, Data East Japan belonged 20% to Sega. Part of the history is that T. Fukuda, the head of Data East, was the vice president of JAMA, the association. Yeah. Japanese Amusing Machine Association, because he supported Nakamura, the head of Namco. Well, for one reason or another, Nakamura, politically, he gave that up. And Nakayama, the head of Sega, had to take over the ownership. Prior to that, Nakamura owned some, and now Nakayama had Sega. So Sega owned 20%. So interlocking directorate, so to speak. So, Data East was having some financial difficulties, so they decided that they would sell the pinball company to put money to Data East. because they didn't want to just put money in. So they sold the pinball company for an exorbitant price from Data East to Sega. And so same company, the owner of the corporation changed. We changed the name of the corporation to Sega Pinball. So that was part of a settlement for the money that Data East owed Sega? No, they didn't owe it. No, no, no, no, no. Oh, right. Data East didn't want Data East to fail. They didn't want to just put money in it. So they bailed them out, if you would, by buying the pinball company. I see. And what did that mean for you and for the company that was Data East Pinball and is now Sega Pinball? Did anything change much apart from the ultimate line of control? No, it didn't change much. Yeah, it changed. Yeah, I guess it did. Yeah, sure it did. Sure it did. Yeah. But was it something that you were upset about or was it like, okay, sure. No, no, no. I wasn't upset about it at all because I think, you know, I wasn't upset about it because Data East was in trouble. And so I didn't want to go down with them. It seemed as though, from a player's perspective, it seemed as if the company had more money to play with. Yeah. Because you were able to do the big displays, the wide-body machines, the sort of stuff that you couldn't have done. More reputation, more money to play with, more credibility with distributors. Remember, we were in the commercial business largely then. So, yeah. The one question I've always wondered is why, as part of Sega, was there never a Sonic the Hedgehog pinball? You know, we made Sonic as a redemption game and they were very, very protective of that trademark. Ah, okay. I don't know if we even thought about doing it, but I know that when we made it as a redemption game, they were very, very protective. Right. So how did, at some point, well, you know. I don't know if we ever pulled that off. I'm not sure. I think we did, but I'm not sure. Hey, Shell. Shell, hey. Here we go. Ask the font of all knowledge. Yeah, of course. we worked on the sonic redemption game do we ever build sonic redemption you don't remember either you know you're covering a lot of territory 75 years is a lot of it ended 20 years ago I don't think so I don't think we did I think we wanted to and they didn't let us I'm not sure we had to fight just to put the sonic logo on our fax forms. Yeah. Yeah. Really? Yeah, they're very protective of Sonic. So... Don't blame them. Yeah. Here's the inside scoop. We certainly had Sonic on your dot matrix displays and it looked very good with the big size and the high resolution displays. Yeah. Yeah. So, so what happened after a couple of years because, obviously, Sega Pinball, at some point, you bought it to form the current CERN pinball. Yeah, we changed its name. So the holding company became a different holding company than Sega. It was my holding company. And the reason is, first of all, typically we were buying, well, we were. We were buying nothing from the parent company in Sega. We were shipping no profit by buying their games or making profit. It's stuff that comes from them. And they're always concerned with the Japanese typically are concerned with the Japanese parent company. And, yes, it's nice to have a subsidiary, but they want a related business where it's buying from them, where it's doing stuff for them. um the um the um so and they had their own problems uh at that point so uh they didn't want to fund us uh and uh you know they gave they left some funding in show he said but they didn't want to fund us uh and uh they didn't want to close us so i bought it from them right which Which is, again, where your expertise as a, well, what you learned basically in law school and so on probably came in handy. It came in handy, and, you know, one of my associates was my lawyer, David Schoenberg, since passed away. I keep saying that about people. That's when you asked him. He's a great dealmaker, and he'd been with me since 1976 as my attorney. Right. In all this time from being Data East, well, not so much when it was Data East, more when it was Sega and when it started, and the first few years of Stern Pinball, and there was various sort of expansions and quite a bit of downsizing as well, or I think you called it right-sizing at the time. Was there ever a point where you really had doubts as to whether the business would be able to continue, whether that was the end, or were you always optimistic that you'd better pull it out of the bag one way or the other? We're very tenacious. certainly they could have flushed us then I guess that would have been unwise we showed them why it would have been unwise we 2008 remember Dave Peterson came in in 2008-2009 really and we worked very hard to get in a position for that and by the way Dave Schoenberg my lawyer There's also been a lawyer for Dave Peterson, and that's how we got in contact with each other. Was that Mark Schoenberg's father? Yes, yes. He was, right. Yes. Yep, that's right. That's right. David and I have known each other certainly since 1976. We went to the same high school, for God's sakes, even before that. But we really knew each other from 76 is when he was a young lawyer and I was a young entrepreneur. Right. Okay. You really going to play? We're just done. And I don't mind two hours. And you're going to have to replace 20 minutes of it. You're going to play two and a half hours, three hours on some stream? Yes. Absolutely. Absolutely. People are going to listen to it twice. This is gold. You're talking about stuff that you never mentioned before, and it's answering a lot of questions that people in the community have. So we're very appreciative. Okay. Don't for one minute think this is not interesting to people. It definitely is. It's certainly interesting to us anyway. Okay. Okay. I just looked at that slide. Yeah. Yeah, but this is why we wanted to have plenty of time to go through all this, because we know there's a lot to cover. Right. And even then, we're only scratching the surface, of course. If it's any relief, we're way over half past through all the questions that we wrote down. Good. Good. I'll try to talk faster and less. You guys are funny. Okay. going back to the market then for pinball which has obviously changed significantly over the years from from being almost entirely operated dominated to having a significant home collector aspect to it do you sort of ever regret saying that at some point that the the home collectors weren't your key market or weren't a significant factor in who you were selling to or was that accurate at the time but the market's changed so much now that it was true then but isn't now? It was true. It was true. It was definitely true. The marketplace is certainly, you know, we have, in fact, when Dave came in here, I said to him, you know, coming and looking, I said, you know, I'm the commercial guy and I've been running a commercial game business and we have developed and are developing a, you know, a large home segment. And again, I divided it into two different segments, but into a large home segment. And, you know, prior to that, sure, you know, many of us, you know, had a friend whose family had an old pinball machine or what have you in their basement. We have basements here. But it wasn't anything like today where, you know, it's a significant business for it. And remember also that there was, you know, if you go back to the 90s when there was, in 93, 94, there was probably 100,000 pinball machines, much simpler games being made. And there was not the other entertainments that are available today. There was no streaming. There was no Internet. There was, you know, or there was no everybody have Internet there. There the gambling wasn't around as much as it is now, certainly in this country. There was just we are competing with so many different entertainments now in and out of home. And we've become an in-home entertainment in addition to an out of home entertainment. so do I regret saying it? no that was the nature of the business we were in at the time but this is not the same business and it will continue to evolve would you say that the home collector market or enthusiast market has been effectively the saviour of Stone and Pinball given the decline in operators sales? I think it's been a significant part of our business and an important part of our business to make the kind of games that we do and the difference. Sure, it's very important. I think without the commercial side, you know, that's 40, 50% of our business, we'd also have a problem. We need all of it. Um, having said that, um, uh, it's, um, it's, it's not just when I talk about home, it's not just enthusiasts. We also have the rec room buyer, the guy who just, you know, the guy gal who wants a pinball machine, but isn't going to have three or five or two or even, or 200. Oh, that doesn't exist. Once you buy one, you have to buy another one and then it starts growing. well we like that and I have three Harleys so I get that but one of those Harleys by the way you guys know Frank Ballew one of them is his old Harley from 1993 he can't ride anymore and he sent it to his brother who again is somebody who passed away and he couldn't really sell that old thing in the shape it was in so he gave it to me And so I put more money into it than it's worth still. Right. So we're talking about the home users. But Stern also has the, and you mentioned this already, the pro premium and the limited edition model range, so to speak. how important has that been for Stern to basically come back after the big financial crisis and really become the company that it is today, which is a very large company, I have to say. Yeah, it certainly is important, and Bill, you left out the pin, you know, the home-only version. All right, we're coming to that. And so, yeah, and basically, you know, we talk about three segments, three market segments, being the commercial, which we talk about being operators, but it's really it's operators and their players. We have the enthusiast collector and third segment being the rec room buyer. And so we have three segments and one size does not fit all. so they need different products the pro is often good for the enthusiast collector but it's mostly you see for operators and for rec room buyers if that operator has a location that he's putting games in that has a pinball enthusiast clientele he's probably better with a premium or even an LE in that location So, you know, different games suit different places. And would you say that segmentation has been a critical or a major factor in Stern's success and making it the company it is now? Sure it has. And we find ourselves unique in being that we're concerned with all aspects, all three aspects. You know, other people may be interested in all three at some level, but we take very seriously all three segments. Well, you mentioned three, but earlier you were talking about four, so we would look to the low end of the market, really. Wait, wait, wait. It's three segments. Three segments. You've got the commercial segment, the enthusiast collectors. I put them together. They may be competitors. They may be collectors. They are people who are really into pinball. and then the rec room buyer that somebody who's very casual into it is i always describe it as a 45 year old guy who played pinball when he was a kid and now he wants one for the home because it's cool and he tells his wife it's for the kids um so that rec room that the the the pin is largely appealing to the rec room buyer and it's elasticity of demand it's uh trying to bring a price point down so they can have more interest and get into it. Will they later want a bigger, more expensive pinball? Well, that'd be nice. Do you think you've found that niche yet where you can build the pin at such a price point and make it sufficiently like a commercial machine that it'll generate significant sales? or you seem to be toying with it, trying different ideas? Well, I have to tell you that, yes, trying different ideas. We've upgraded the product. Toying with it, we're spending way too much money to be toying. Well, yeah, okay. We really believe that this market exists and it will introduce more people to pinball and some of them will move on to become enthusiasts, collectors, competitors, whatever. But that's, you know, again, we, you know, this is this game is fun and we're trying to expand its reach. Certainly, you know, and you asked is the home part of the business important to us? It's been important the last number of months, just as it's been important to the exercise equipment people and so forth. And now that people are starting to get out, the bicycles are being sold and what have you. yeah absolutely but you still haven't haven't got the game into into the walmart's and the costco's and i'm not sure i'm not sure that all those are the best places for them where you know we've you know big box stores we're still experimenting and seeing how much we want to be in them uh versus in a dealership situation you know a smaller retailer well the pin is still being When you put a pinball machine, you sit it on the floor of a big box store, and it's put off on the end cap. There's nobody there to sell it, to explain it. It's just sitting there, and sometimes it just becomes a babysitter for the children. And, of course, you have the problems with whatever servicing is required. Well, yeah, that's a lot of play, and it becomes a babysitter. We did an experiment once with Sam's Club. Oh, God, 10, 20 years ago. And we had games in there without coin mix. And they still managed to start them and play them. Coins just falling right through. I don't know how they did it. I don't remember. But they became babysitters and so forth. So, yeah, they'd find coins inside them. Whatever. And one of the other markets I know you've been trying to break into, and not alone in that, of course, is the Chinese market and selling games over there. You're a fairly regular visitor over there, aren't you? Not right now. No, no, that's true. Well, very regular then at the moment. It's September. I'm not going. I'm not going. I'm not going. I actually enjoy China but no I not going No we have some success It very slow Very slow You know it more difficult to introduce pinball to a country with no territory, with no history. Yeah. Versus, you know, Eastern Bloc had some history and so forth, so it's more difficult. Okay. Right. How has the the growth of the bar cave movement, which I guess can be, covers like the past 10 years, how has that boosted the growth of Stern Pinball? Oh my God, fantastic. And why is it fantastic? Well, first of all, if, you know, if there's a, we know of, say, a thousand bar caves, and they're by, you know, let's say they have an average of, 10 pinballs in them some of them are a lot more some don't have you don't have any but you know some are 20 and what have you let's say 10 pinballs five of them are newish games so you know there's you know uh 5 000 new games that were sold in the last few years uh and not 10 years in the last few years so that's significant uh probably more than that i'm probably you know low on my number uh the other thing that they're doing is they are introducing a new group of people who one day are going to be the enthusiast who wants the game in his home we you know if we don't have pinball machines on the street where people in the public play them and see them, then they will truly become a collectible, like an old Model A Ford or Model T Ford, you know, a Ford from 110 years ago. And those people who have them at home, you know, there's no need to keep making them and they're not on the street. They'll be saying there's a pinball machine in the corner. Don't touch it. Don't play it. It's an antique. It is a collectible. and so we needed a new group of people who want it and if you look at go back to automobiles again the cars people are collecting that they want today in america are muscle cars from the 70s and 60s 70s 80s or their their old porsches or old ferraris or something they're collecting but But people aren't buying 1930 Fords anymore, you know, Model A Fords. Anybody who collected and wanted that old Model A Ford, they all have something in common. They want them. They're dead. They're not around anymore. They're not the car that the guy who wants to buy an old car to have as a cool thing drove or saw when he was a kid. He wants a muscle car. Right. Well, I guess exactly like you say. The point is that we don't have any games on the street 20, 30 years from now. Nobody will be wanting these things as collectibles because it's not something that's current. Right, right. You're saying how barcades have been so instrumental in driving forward not only relevance but sales. do you think what's been happening in the past couple of months and will be ongoing in many areas is going to have an impact on sales or indeed that relevance? Sure it will because people I don't know for how long but some places will close and not reopen it's no secret that that's a fear some places that have games in them have to spread out the tables and don't think to put the games between the tables that they want the games out for a while. Not necessarily barcades, but places in general. Barcades may be spreading the games out or turning every other one off. So there's adjustments to be made and we're going through a time, no question about it. Are you seeing... I know you haven't actually been building games for the past few weeks, but... No, no, no, no, no, no. We have been building games since... May 29th. May 29th. And, you know, we had some games that we were shipping that were in stock that, you know, we were shipping prior there, too. Right. But are you seeing any impact from this reduction in the number of, say, outlets for your games? Yes, yes, yes. Our distributors are buying far less, and our dealers are probably more, but we're sitting with thousands of games on backorder right now that we're trying to fill. We've got lots of backorders, and some of those may be home, some are commercial. Some of the commercial guys sell to all markets. certainly our Europeans importers may concentrate more themselves but they have dealers more themselves on commercial but they have dealers who sell to the two different home segments and some of our importers do sell to all three segments and our Australian Our Australian customers is doing fantastic, and he's selling all three segments. Okay. I suppose you mentioned it just now about when you partnered up with Dave Peterson. I guess as I know there's been a lot of changes internally within the company from that point onwards aimed at getting you where you are now, not all of which has been obvious or apparent to the public. I wondered if you could tell us how the Stern pinball of 2008 compares to the Stern pinball of 2020. Yeah. Well, first of all, 2008, we stripped the company. Michael Dunlap, our CFO, He's been with us since 87. And a lot of the people here have been here a long time. Very few people leave. But we've grown, and our staffing is much higher. We're in a bigger facility. We build more games now. There was a time when we built more but simpler games. and staffing wise we have George has created a game studio that's much larger the manufacturing techniques and systems have been greatly increased by different manufacturing people coming in they're more professional we have some younger sales people that came from this um our sales people are all came from this from the uh game business the commercial game business um uh except for the head of sales who when dave and i were looking for somebody and i saw john viscalia's resume he was the only one from chicago not from chicago that we interviewed and i saw on his resume tops he worked for tops was a trading card company, which I don't think Dave even knew what was at the time. Maybe he did, but I don't think so. And I looked at that and I said, this could be our guy. And he was, and he is. And, no, you know, some of the staffing is for a different direction. Certainly, adding a LCD display creates a whole new staffing. Yeah. You've got to make all those assets. Yeah, yeah. And it's big and it's costly. It's a hungry process, isn't it? It needs a lot of people, a lot of effort. It's not just saying, well, what I used to do in the dot, I'm going to do the same thing in the display because when you look at that, it didn't work. You needed more. And these guys do phenomenal stuff. Yeah, sometimes we have stuff from the licensor. Sometimes we augment it. Sometimes we start from scratch. and it's not just a bunch of stuff thrown up there. It is very, very good creative storyboard and stuff. Fantastic. Yeah. So obviously the whole company has expanded enormously over the past few years. And you've, not you personally, but the premises in which you operate has expanded and you've moved to a bigger place now. Yeah. Hold on one second. Hey, I'm doing an interview. I'll call you later. Yeah, yeah. Yeah, as I say, you're in a new-ish factory, been there a while now. Is that big enough for as large as you intend to be, or can you see yourself moving to another premises any time in the next few years? It's probably right size. It's probably right size. Not to say that if we were to integrate any vertical integration of, for example, if we were to want to print our own playfields, that does not room for it here. Right. or if we wanted to put the coating on ourselves, that probably should be in a different building anyways. It's just because it's gassy. I'm just aware of all the building work that's going on around your premises there. On the other side of the street where they've just demolished everything and built all these server farms and the factory next door, I think they're... I don't know what they're doing there. I don't know what they're doing with that one. I really don't, because they've been playing around with it for a long time. They'll have to come knocking on your door saying, hmm, nice factory you've got there. We'd like to knock that down and build something else. Yeah, yes. All right, okay, I'll take that as a yes. Okay. Well, I mean, I mentioned just now about other companies, And, of course, famous for having said that you were the only company making pinball at one time. For a decade. Yeah. And that any other company entering that market would cause them both to fail. Well, I guess that was an overstatement, wasn't it? But, you know, if you really think about it, entering the market, you know we're yeah what 85 of the market um argue with me 80 90 85 of the market i've got a study that says we're 85 i think that's low um and then you can segment the market and talk about the different segments we're more than that of the commercial market and so forth um and i i gotta tell you i half the time i don't actually i don't know that much about what the uh you know some guys are hobbyists uh at it or they you know they got a nice small business they're very happy with and there's a place for them uh in it uh so forth uh i don't really know that much because i think we're they're they're not very noisy i mean i don't know that much of what's going on at the other the other people are trying to do they're doing what they're doing you're doing what you're doing But you're quite comfortable with the fact that there are potentially about a dozen companies out there of one kind or another producing pinball machines. And it's not something you don't wish any of them ill or want to get back to being the only player in the market again. That's fine. That's fine. This is great. Thank you. I'm having one right now. Thank you. I'm having one right now. Shelly's leaving and she's giving me a What do you call these things? Raffaello These little coconut things See that? You can't see it, they're great Is there a turtle on it? No, no, no Very good, Jonathan That was good, John Oh, these are good I know, they're the best They're the best So I'll be on the call in the morning Pardon me for eating in front of you all Bye, guys It's your birthday we'll allow it bye Shelly that's the start of the birthday cake that's great I'm on a diet no cake I've lost as I told you maybe close to 20 pounds I was 20 pounds yesterday I put a pound back on two pounds back on you're certainly one of the few people who've lost weight during this well two things A I made a concerted effort but also I don't drink alone at home the only time I drink at home is I live alone is if I'm if I'm going to go out to dinner I often have a drink at home first rather than buying two drinks when I'm out I buy one okay I you know I remember when I was 30 or so I didn't drink for a month and I lost weight drinking I mean I like vodka everybody knows that most of your listeners would know that I haven't kept it a secret but I've drank very little because there's been nowhere to drink at home and you're not supposed to have a bunch of people over anyways and I just don't sit around and drink so I think that helped me lose weight possibly yeah or not leaving the house for a month or two Well, no, I haven't been that secluded. I did have down the street from my house, from my apartment, there was a pop-up test a number of weeks ago. And it was raining, so I said, okay, I'll go over. And I had a swab and I had a blood test. And it took 10, 12 days to get the results, at which point the results meant nothing. but they were negative in both cases those were tests to whether you had it or not whether you have had it yes thank you not yet and not till tomorrow I call him tomorrow yeah it is tomorrow no no no his birthday is the 13th his birthday is Saturday yeah we're talking about our customer in Australia Bruce Pierce Colbert is a year and one day that's amd he's a year and one day younger than me so on june 12th i always call him to wish him happy birthday because it's june 13th there yeah right yeah yeah thank you for reminding me thank you yeah so where were we we were talking about my blood test and and and swap were we talking about how much it was at home no i i probably came in the office uh even during all this as we were um regardless of my age uh you know we were repairing the place we were this or that uh and i probably came in uh one to three days a week even during all this other than that you know i might have gone out on a to ride my motorcycle there's nowhere else to go um i had to stay away from my daughter's apartment because being pregnant she didn't want anybody around uh during this and uh i did my uh my ex-wife uh had an injury so you know i was over there helping her some uh and uh uh uh you know it sounds like you've been busy and and clearly there's no i have no indication of uh of gary Stern ever retiring from the business? I talk about semi-retiring but not retiring yesterday I was with some guys at Tilt Studio down in Rockford opening up a big FEC and Craig Singer is the owner Kevin Jordan is this guy who puts everything together and runs it but Craig is actually a Gottlieb son-in-law and he lives in Texas so he was in there for the day and I was down saying hello and seeing him and he says what would you do if you retire we were talking you know quickly about it he's 73 so he's a youngster and you know I talk about semi-retiring you know but you know you've heard my story with the taxidermist that you know I got you know at this bar that my friend Joanna works at there were business cards sitting there, one for a taxidermist, so I, you know, they stuffed animals and so forth. So I called and I got a quotation from the taxidermist and when I die, he's going to fix me up with moving eyes and put me in the conference room here and I'm going to be watching these people forever. No, you have not told us that yet. That's it. I'll always be here. You guys have seen the flat Gary out front, the standee. No, no, this could be real Gary. The 3D version. Stuffed in the real thing with moving eyes and the whole thing. Well, if you weren't there, I guess there's no one else in the family that would take over in the pinball business, is there? No, no. My family, as I said, one daughter is in the Director's Guild, movie directing, second AD right now, moving her way up. And the other does digital marketing, including some work for us. She's the one that's having the baby, so she's not doing work for us right now. She's on hiatus. But as a consultant for us, she's really good at what she does. Lindsay, they tell me, is the smartest in our family. they being the rest of my family members among other people uh so i i believe that i believe that so as you're clearly in the business for a while yeah what's what would you say is the probably the biggest challenge you can see coming coming down the line in uh in for stern pinball oh i don't know it's uh you know it's certainly we need to get through this uh we need to uh And we've got some business things that aren't very interesting that we have to get done. We were in the midst of putting in, as I said, a new ERP system. And that's a big, big task. And that, of course, went to stalled. That was stalled during this thing. So there's business things. There's organization. There's redoing this place. And certainly laying it out for a safe social distancing and masks and everything and making sure everybody is safe and healthy. You know, as I say, a little bit of the fabric of life would be gone if we didn't have pinball. But these aren't hot lung machines. Nobody should get sick from them. So we need to be sure all of our employees who are our friends are provided for by having work and are provided for by being safe here. You know, we are an employer that has responsibilities. Absolutely. Yeah. Yeah. Yeah. You know, first and foremost, these are businesses. Well, this is not a hobby. This is a business. It's an application. But, you know, besides the vocation, it is a business and it is very important that we make sure it's protected and that it makes money to continue itself. and to see our vision. Oh, and to see our vision. And remember, remember, our vision, and I do this at the end when we done but I tell you that our vision is to create a global lifestyle brand built on the iconic and outrageously fun modern American game of pinball that perpetuates pinball and the rapidly growing, adrenalized global community of pinball fanatics for generations to come. Have you got that printed on the wall somewhere? Actually, it's hung in the factory. Oh, right. Yeah, but I happen to have a copy of it here. Right. But it's one of the, you know, you've seen the different hangings we have in the factory. It's right there. That's what, you know, you come in, that's what you're going to see. Right. So, now, speaking of the factory, I'm going to make a little jump in topic here. Obviously, the pinball games that are being designed by the design teams that you have working in-house, they need to be manufacturable. And over the years, we heard plenty of stories of cost-cutting measures, in the sense like mechanisms that were either not reliable or too expensive that had to be replaced and so on. What can you tell us about finding the right balance to the point? Let me tell you what we do. First of all, you know, we have life test rooms and we life test things. We have a 14, 15-month, 14-month technically, it runs longer, NPI, new product introduction program, a set thing that we do in order to get all these things done in a timely way. Included in that is a preliminary and early, not just Whitewoods, but at some point when we think we have a design, We have a DV build, a design validation build. We build a number of the games in engineering mostly, partly in the factory and engineering. Prior to going in production, with actual production parts, we have a PV, a production validation build. And we build 10, 12 of each model of the game. more if we have an event coming up like when we do Milwaukee with 30 games there before or as they're being introduced to validate. And so the factory people are building it, the factory production people. And all along the way, we have gate meetings, both of the design aspects, sales, whatever, but also the manufacturing people. um the what we don't cheapen up a mech but we may not put the mech in because you're you're inferring that we find cheaper ways to save money to build it and make it inferior and what we do is we take it out if we can't if we're over budget uh and we do have budgets it's a business we don't put it in we don't cheapen the mech um we you know we we certainly uh do, you know, sourcing and buying and changing this supplier or that supplier. We have incoming inspection, we have factory and supplier inspection, so, you know, we're attuned. And we've made a lot of improvements and changes in this. So, I take exception to the idea that in order to save money, we cheapen up the methods. Right. But there's still a, I'd say it's probably an art to find the right balance whether a toy should be in the game, even though it's probably a little too expensive for the bill of materials, but it adds so much, or leave the toy out and then you have an opening on the play field where you still need to do something. You need to replace it. If you don't put in a toy to save money, you still spend some money. You don't get, it's not, you have a blank. So if you've got a $50 toy and take it out or a $75 toy and take it out, you don't save $75. You save some part of that. But having said that, two points to that is that it's not unusual that, yeah, we're, I'd like to say we're always on budget. I can tell you that we're not under budget. the second thing that I can tell you is that we are very conscious of and don't always succeed with it but very conscious of having differentiation between the pro and the premium le and then you know we do have you know a standard differentiation on the premium and the le you know with the shaker motor the glass the mirror glass the playfield glass the the inside side armors the fancy metal work and the sound system stuff. we are conscious of differentiating between the models. Okay, can I just go back to something you mentioned just now, which is a term I hadn't heard of before, your production validation models, which I guess were previously in other places been called sample games. Those a little different. No, a little different. Yeah, you see, sample games might be made in an engineering department. Might be made partly in production, partly in engineering. A production validation means run a bunch of these games down the production line to validate the actual, not with sample parts, with actual production parts, the parts that are made the same as the part that's going to be, you know, you can get a sample part made on a one-off type thing, but the production validation has the real parts. So would those games be any different to a full production game? No. Unless we learned something there and had to jump through hoops to fix it. No. The idea is that is a production validation game it is a production game not a design validation dv is the sample you're talking about right tv is production and this is some of the things that we've added here in the last uh couple years as we try to be better manufacturers not just better designers i'm just wondering whether if people buy a game with would there be any difference if they got a production validation game or a full production game you're saying it's very unlikely that it would be very very unlikely very unlikely um um it's supposed to be that the real artwork the real everything i can't tell you we've never used a whitewood for that uh but then took it apart but it was still made with the with the mechanical parts and run down the line and made by the production people with with our uh added uh you know we now have a production engineer out there and an industrial engineer. We've added a lot of manufacturing staff that you would see in a regular manufacturing company, not in a pinball manufacturing company. Sure, yeah. It's just that there's always people who are interested in, you know, what game is, you know, with the first games off the line or the last games off the line, what differences might be between them and whether there are any differences between them, whether the game develops. And sometimes as we learn something, you know, we think everything's great and it's out in the field and we learn something that we could do, or the production people say, now that we're building it, this would be easier. We do running changes of some things. So, yes, just like the car manufacturer. Oh, yeah. Okay. Interesting. so um now if i uh we mentioned orbital one uh earlier on in this podcast which is a type of game that can be seen as quite uh revolutionary in the sense that it was so different than anything else that was out there um at that time um since then or even still right um but uh I don't think we've seen any revolutionary pinball developments since then. It's all been sort of more evolutionary in the sense that, okay, yes, we got a dot matrix display, and eventually that turned into an LCD, and some other elements changed. But do you miss the opportunity to try more radical designs and do the things a bit differently for a change, or are you comfortable the way you're doing things right now? We have some things that we're planning that we think are really important. We've made some changes that, and George would speak better to these than I would, in the type of games, the type of rules, and some of these toys, what we call toys, are, you know, George is a toy designer by background, you know, from the Marvin Glass Toy Company. And so, you know, there's more change than you allude to. But he's better to speak to that than I am. As far as something that's just weird, radical. You know, this is a sport. Pinball is a sport. And if you go too far afield in making a round tennis court, it's not the same sport anymore. Again, I think wide bodies are not the same sport anymore. Some people obviously disagree with me. I do know there was a guy, Neil Falconer, who was a designer programmer in this business also passed since past. He was at Valley and he was with us. And whenever somebody started making wide bodies, he polished up his resume and got it ready to go out because that was usually a sign that somebody was trying to do something because the business was on the way down. Yeah. If you look historically at wide bodies, and even though Flight 2000 is one of my favorite games, You know, you shouldn't, in my opinion, we have, you know, a size that is pinball. It's just like I didn't like cocktail table. Never play barely those cocktail tables, sit down, round things, or the one midway made with the play field turn to you. You're right. Yeah. Rotation aids. Yeah, right. That's not pinball to me. now turtles turtles is pinball to me and i have one in my apartment uh you know i don't live in a big apartment so i have one game there and i took that one home because of the covid 19 situation i couldn't learn it well enough here to get ready to do my webinar uh and so i needed a home to play now i gotta i'm digressing but lindsey my younger daughter heard that i had it there and she when she was little she was a uh a turtles turtles kid a turtles fan and everything that we got her to do we bribed her her parents would bribe her with turtle stuff you know and turtle power and get her a turtle this and a turtle that so she had it so she came you know the one of the few times I got to see her since this whole thing started was because I had the Turtles pinball machine and I got the pro she loved it now that I learned the premium LE I'm going to swap this one out one day for a premium for a while because there's some stuff in that and I that the ramp on the left and the whole skill shot and so forth and by the way I always pick Donatello because it gets me into a multiball faster right right right So is it very common for you that sort of like the newest title on the line ends up in your apartment, or is it only with occasional titles? I used to do that much more regularly. I'm going to start doing that again. And I tell you, they put it in the truck, and I drove the truck home with a pin dolly, and I had one of the guys in the building help me put it on the pin dolly, took it upstairs. We put the legs on the maintenance guy in the building and so forth. I didn't have them come deliver it for me. I put it in there. And when it leaves and I switch it, I'll do the same thing. And that at 75, I think that's very... I can still move a pinball machine. Come on. It's not that hard. You're a role model to many now, Gary. we all want to be able to swap pinball machines when we're 75 years old oh god of course you will they've got a good pin dolly no big deal actually the only thing is I won't roll the pin dolly on my wood floor so we had to carry it in and then I've got those when you move furniture you've got those little felt things to put under it to move it so I can move it all around by myself ok I think we're sort of coming towards the end of this this interview and thank you very much for i'm gonna tell you i'm gonna say now because i may be i may be the last person in the building and we there's something on our alarm system and the last couple times it's shown uh trouble trouble trouble and take time to get it set i came in here saturday night last i had to do something and the alarm system showed trouble and i'm saying oh i couldn't get it turned off and i mean i'm ready for the cops to come i got my arms up ready standing out there in case they came well that's the 75th birthday you'll always remember yeah yeah yeah we haven't finished yet we still have a couple more questions if we possibly can just to to squeeze in um in particular sort of looking back over the your 75 years now you're just about there um what would you say have been the the highlights and all the highs and the lows of your time in the pinball business oh well my lows certainly were a couple times when i uh went or almost went broke guys you know uh you know i've been up and down yeah we've stuck with this thing uh in the other com i've done this i've been in and out of you know different i had different companies but those would be the lows the highs listen you know i've seen you guys all over the world i've been other people um uh i this thing has provided a great living for my family and a great life for me and and for them and yet it's provided as i point out to the back here it's provided livelihood for a lot of people and a lot of fun for people designing and participating in these games, a lot of fun for people out in the field who play these games. So, you know, I got all ups and very little downs. And I've been very lucky in life. And, you know, there's people that are, yeah, my ex-mother-in-law used to tell her daughter there's always somebody richer, smarter, prettier. And that's true, but I got no complaints. you know none of us none of us none of your listeners were not in the in the sudan eating sand or trying to get from syria to um germany or something we're always it's it's always unimaginable but um if you hadn't spent a lifetime in business uh in in the pinball business if you hadn't gone into pinball in the first place what would you have done do you think um well i was practicing law i could have done that might have been it doesn't sound like that was a vocation for you though i might have been much more financially successful i don't know there's a lot of money um i um i was really i enjoyed in in the early 70s owned why are you with a uh i own wise fools pub as one of the owners um uh luna castro who again is the one who tricked me into going to law school um he um he uh his secretary vivian ungerleiter her husband david ungerleiter and i brought these guys out who had this hippie jazz and blues club and uh you know that was of course every every young man wants to own his own bar uh you know and i was i was between marriages um um and uh uh and by the way i'm in contact friendly with both my newest who's been a decade my child's mother uh denise who i will be at my birthday dinner tomorrow of course and i haven't spoken to her since this morning and linda my first wife uh the doctor who i who's my age i talked to periodically uh and see her she lives not in the neighborhood i didn't know she was still there so So, you know, I've been very, you know, very lucky in that respect. So all's good. All's good. So any challenges still ahead? Yeah. Challenges still ahead. The next game. Any personal challenges? Yeah, I'd like to get my boat out of dry dock. See, nothing serious, you know. The crisis goes on. I'd like to see my family, you know, my grandchildren healthy and so forth. I'd like to see them well and successful. And have one hell of a great birthday tomorrow. Well, thank you. Thank you very much. Well, you know, we're starting up turtles at the end of this week, beginning of next week. And I'm really liking this game. It is a, you know, at a serious time like this that we've had, this is, you know, my father used to say that a pinball machine is like a movie in that it's got to have a theme, it's got to have action, it's got to, you know, have good promotion, good distribution, good filming or artwork and so forth. but it's not serious it's not like I always use China syndrome which was about the meltdown of a nuclear plant and we're not we're just providing fun and that's that's what we're doing and at a time like this a you know a not a shoot them up but a gay happy game bright well beautifully arted game like Turtles is just the perfect thing for right now and I just like having it in my living room always selling always selling yeah well you think you guys you don't have a copy of this or I'd make you read this with me you know our vision create a global lifestyle brand built on the iconic and outrageously fun modern an American game of pinball that perpetuates pinball in the rapidly growing, adrenalized global community of pinball fanatics for generations to come. It's just about fun. Capital F, capital Q, capital M. Don't worry. We get it with just about every press release, I think. For which, thank you. And thank you very much for joining us here on the eve of your 75th birthday. I'm sure from Jonathan, myself and the whole pinball community we all like to wish you a very happy birthday right thank you very much, I appreciate you all thinking about me yeah and hopefully we'll get to meet before too much longer yeah that will be nice that will be nice, you know we lost London's weekend London open yeah the open day I hope that we're all in London in September. For the IAFA show, yeah, that would be nice. I hope so. I'm planning it. If not, then hopefully October in Chicago. Yeah, yeah. Okay, well, Gary Stern, thank you very much for taking a not inconsiderable amount of time to talk to us today. and once again a very happy birthday and we look forward to seeing you before too long. Thank you. My pleasure. Thank you guys and good luck and stay healthy. Stay well. You too, Gary. You too. Thank you.

_(Acquisition: groq_whisper, Enrichment: v3)_

---

*Exported from Journalist Tool on 2026-04-13 | Item ID: e2e19787-fd48-43e8-9eaa-493772541a25*