Welcome to Replay Magazine's podcast, where we'll dive into the legends and interesting stories within the world of what we call coin-op entertainment. That's games and amusement machines you find in arcades, fun centers, bars, restaurants, and beyond. Replay's covered this business for 50 years and is joining forces with industry veteran and former association president Randy Shilton. He is chief revenue officer for National Entertainment Network, owned by Japanese amusement giant Kittleton Genda. And now, here's Randy and this month's replay podcast. Hey, welcome to episode four of the replay podcast, to where we interview really special people in the industry. And today, a huge honor of mine to get to spend some time talking with Gary Stern. Gary Stern worked with his father. They have been the definition of pinball for the better part of 70 or 80 years. quite a few twists and turns in his career. He's currently the chairman and executive officer of Stern Pinball Machines in Chicago, and he has just a fascinating story, and we're pretty excited that he took time to spend with us. So here's Garrett. Welcome, Gary. I'm pretty excited. This replay and I started thinking about, gosh, it would be really interesting to get some industry legends on camera and hear their stories. You've been on a short list ever since we came up with the idea. Industry legend sounds like I died. Well, no, it just means you're a legend. There's a lot of legends that are still alive. I'm making some notes as you talk if I look like I'm obsessed here. Well, let's start right there. You're 80. My God, you look terrific, and you're working every day. Give us a – one thing I do want to say, scheduling with you is the funniest thing ever because you are a man on the move. Give us a glimpse of day in the life of Gary Stern. Yeah, well, first of all, you know, 80 and I look great. There was a – older people will remember a movie called Cat Baloo. It was Jane Fonda and Lee Marvin. It was a Western, and Jane Fonda hires Lee Marvin. He's a drunk gunslinger. One night he gets really drunk. And the next day he's leaning against the hitching post and his legs cross. The horse is leaning against it with its legs crossed. And he goes, W.K. said, oh, my God, your eyes, they look terrible. And he said, you should see them from my side. So likewise, I look great, but I can tell you I got a little ailment here, a little there, whatever, you know, 80. But you just keep going, and that's what I do is I keep going. But you've been traveling all over. Is that a normal schedule, or is this just busier than usual, or are you just a man on the go all the time? It's a little bit of vacation today. But also, I live in both Chicago and Vail, Colorado, not far from where you are. And I've been in – our factory is just outside of – it's in Elk Grove Village, just west of the airport. I mean, just west of the airport, O'Hare Airport. And so I live downtown and work here. A lot of people, they work, you know, Zoom and this or that. I like to come in the office. and you can see that I'm sitting in the factory. I'm no longer the CEO. I'm the executive chairman. But you can see I took the small office. You know, Seth, our CEO, who's great. So I took the small office with a big glass seeing the factory out there. You know, this building is fantastic. We've been in here a couple years. I'm not answering your question, but I'll come back to that. You may not get to ask another question the way I taught. But this building is the most modern manufacturing building in this industry I've ever been in. High ceilings, fully air conditioned. Between this building and a woodworking building around the corner, we're in 230,000 square foot. This building, fairly air conditioned, great manufacturing facility. We can do quality product, volume of quality product. We have a lot of room for growth in it. We have our PAMP, Heart Successory Merchandise, business in it. That's where we do a lot of that. It's just like I'm a Harley enthusiast besides loving pinball. And just like Harley, you can buy T-shirts, Stern T-shirts. I'm not wearing one, but if I had known we were video, I would have gotten all dressed up. Stard t-shirts like this one. This is an older one. This happens to be here. In fact, it says games with balls. We have enthusiasts and what have you. We buy accessories and also parts. And we have coppers for games. You can trick out your game just like whether you're an operator or a homeowner, just like you do a motorcycle. And, you know, with our Insider Connected, you know, our games are connected or you can connect them. You can run them without connected, but much smarter to run them with connected, with Insider Connected. And if they're connected, we have over 300,000 insider-connected players, and they're looking for these games. You know, if they're enthusiasts or they're not enthusiasts, they're looking for the games. Well, an operator's game that's connected is on our locator map, and somebody looking for the new game will find it, They'll look for it, and the games, you know, do well, earn more money. We can see when the earnings are highest, like weekends, of course. Surprise, surprise. We've got all types of statistics. We can just adjust the games. We download code. That's trivial. I say trivial it's important because games get updated and they make more money and people are interested in them but it's all based on Xbox Live, it's not based on, it's similar to Xbox Live and today people are gamers the Xbox Live people they get, just like with our games, they get awards and achievements and what have you, and then we're able to, you know, we have, for the operator, we have a locator for the players to go find the games. There's, you know, as I said, hundreds of thousands of people looking for the new game. Best to get the new game when it's new because that's when they're going to be looking for it, to learn more money then. And they play not only for points, they pay for awards. And there's all kinds of different things we're doing. We made with D&D, Dungeons & Dragons, the dungeon changes every week. So the game changes. That's because the game's connected. Now, you can play it not connected, but if it's connected, it's going to update features and have a new play every week, something new every week on it. So, as I say, we can update games. The future has changed. Pinball has changed. And the player has changed. The player is a gamer today. So there's plenty in our game for people like me. There's plenty in our games for great players because they're gamers. More than just, you know, it used to be in a pinball, the rollovers at the top, ABC, you got those and they lit the red special. There's simple things now. There's mechanical things, the mechanical action toys. But there's also deeper rules for people to really get into, and they do. But you asked me about travel and so forth, and I digress. Well, I better be careful with my questions. I think I'm only going to get about three in here. I live both here and in Vail. I've been in Vail in the same building since 1978, and the apartment I'm in now is in 1993. I don't think I could afford my apartment today. Prices as you know in Colorado are crazy crazy So I don really know anything about your do you have kids in the business No no I have two daughters but they not in the business One lives near here, and she does digital marketing. My other daughter is in California, and she's in the Director's Guild. She's an assistant director in television and movies, so she's very busy working there. Well, she's very busy because she has good – she works with a good team of people. But movie business is tough today. So, no, they're not busy. But instead, I have a great partner, Dave Ashley Peterson, who came in and joined us during the Lehman Brothers recession when it was difficult. We've been up and down a few times. That was 2008, 2009. The company goes back to 1986. And our new CEO, who's not so new, he's been here for three, four years, Seth Davis, you know, it's a young guy taking over management. You have to have continuity. Seth is 47 or so, turning 47. I have to look that up. Undergraduate degree in accounting and information technology. a decade at GE when GE was a training ground to be at, Wharton Business School grad, and then a decade plus at Disney in games and in streaming. So he's a gamer. He plays pinball. He plays games in general. He's much more attached, aware of pop culture than I am. As you know, we typically license titles and have always. So he's just perfect. He's doing great. So that's the most qualified guy you can find, huh? He's smarter than I am, and he's more attuned to the world today. A lot of it, you know, passes me by. It doesn't say quite much of it is passing up. I was taken by, you know, you're an 80-year-old guy that's fascinated by technology and leveraging it, and that's great. I love that. Just keep continuing to learn. Well, as I said, if you don't have connectivity, you don't have a future. My partner and I went to a – I call it speed dating for lenders and investors. And our investment banker wanted us to go. We went. We didn't do anything from it. But what I did learn is that – and this is half a dozen years ago – every product that was interesting to the lenders or investors, Products that we're going to have a future. We're connected. Had connectivity. And that's when we invested millions into our Insider Connected. And it's made a significant difference. The way I say it is that without Insider Connected, a pinball's a box on four legs. It's a little arrogant on my part. But I truly believe that we've got to have connectivity in products in our business. Your jukeboxes are all connected. you know so forth and so on you know you got golf and you got buck hunter and for the street you know these are just natural things to have you have to same is true with pinball and pinball in the home you know a large part of our business is to the home but with the street is you know is where we become popular in our faces okay so you're unique in uh in this conversation because Because you're well-known in the industry, but you've bridged your celebrity outside of this industry. I have a friend that actually, once I told him I knew you, I thought he was going to ask for my autograph just because I had dinner with you one night. So you really do have celebrity outside of – because your name's on, I don't know, how many tens of thousands of pinball machines. Tell me about that. I mean, you Google your name. You've been interviewed by just about everybody. Oh, I don't know. It's just, you know, I'm just – the guys who are important are the creative people, the guys who design our games and the guys who design the Insider Connected, the achievements and the awards and so forth, the challenges that people have. I'm just a businessman who needed a job, and that's why I'm here. I needed a job, so there weren't a lot of jobs for former presidents of pinball companies or whatever. I had to create this company, which was in 1986, originally with Date East as an investor. And then we sold it from us and Date East to Sega in 93, and in 99, we bought it back from Sega. Well, I was reading all your history, and you've had some really interesting turning points, and you can fact-check me and correct me, which I'm sure you will. But I read that Stern closed their doors in 85. 84 was the Stern Electronics. 84. Yeah. And you found a way to survive. Then we transitioned into the Data East period, correct? Yeah, and that started in 86. and that was a bare wall start with nothing it was Joe Kamenko and myself and Shelly Sachs that Shelly picture back there she's since passed away and Franchi one of the artists did that painting of her Larry her husband has the other copy of it so I think that when Williams who dominated the pinball industry closed their doors in 96 to go focus on gaming, you said, well, I'm just going to be starting pinball. Yeah, yeah. Well, they quit pinball in 99. They had come out with a P2K Pinball 2000, which was a misnomer because they quit in 99. They made a valiant attempt. George Gomez, who's our chief creative officer, was very involved in that at the time. And he's, we had, for my 80th, we had, for the whole group here, you know, 400 and some people, almost 500 people, we had cupcakes and ice cream and a big birthday cake for both. George was, I was 80 on June 12th. He was 70 on June 1st. So we celebrated both of our birthdays together. But, yeah, we saw the opportunity that, you know, Williams was a great company. It was my father's company at one point from 1947 to 64. And then he stayed there. I started there in the stock room when I was 16 for summers, and later, after practicing law for a few years, worked there before we left, and I started starting electronics, starting pinball. As I said, needed a job, so I had to have a pinball company. I practiced law for a couple of years. I owned, as a sideline, what I call Hippie Jazz and Blues Club. and then I was part owner in a thousand seat nightclub and it's all related the same entertainment as our games but that was never my primary business well did you that's interesting because I didn't realize until I did some research you are an attorney did you leave being attorney due to a dislike of being attorney and a love of the game business or what was the what was the motivation Pretty much it. You know, I was with a boutique bank and bankruptcy firm. And it was very nice. It was good. I was only there for a few years. They say you've got to practice for five years until you're really a real attorney. And so I didn't make it for five years. And I instead came and joined the pinball business, something I guess I always wanted to do. Well, my father, of course, was, you know, I started working for him and then it sort of flipped a little bit. But I thought I was very lucky to work with my father. How lucky I was, you know, I knew his strengths better than anybody else. The other people did. I knew weaknesses other people didn't know. I knew him well. And, you know, it was now at my age, I realize how lucky he was. Because my children don work with me as you asked earlier and I see them a lot speak to them but there a difference between being with them every day He got to be with his son one of his two sons every day for years And I think that you know the old nuclear family working family farm family whatever you might say that opportunity to work with your children, it's a great opportunity to work with your parent, but to work with your children and be with them as they develop is even better, even more important. You understand part of that, at least. I was partners with my father for 16 years in Wichita, Kansas, and a lot of that was through some of the changes in the industry, like the video game craze where everybody just stopped buying everything but video games. But, yeah, no, family-owned businesses, I can remember, you know, I'm not going to lie, I remember some days where we didn't want to be around each other. Yeah. I understand that. Well, when I was 16, I was working in the stockroom, and I was home from college. I was working in the stockroom, and 6.37 in the morning, my mother, she woke me up, and I said, well, I don't have to go to work today. Sam fired me. And she said, well, I just rehired you. Get your ass out of bed and go to work. I just rehired you. But you're right. Sometimes, you know, you didn't want to deal with each other. Yeah. So none of us knew Sam. Tell us how you remember Sam, your dad. Sam died in 84, and a long time ago. It's amazing. And that's 40 years ago. Of course, I'm 80, so, you know, it's a little more than 40 years ago. I don't remember him well enough. That's the first thing. I'm going to say he was Mr. Stern, whereas I'm Gary. He was Mr. Stern and he he was just smart and saw things. And, you know, he was a self-made man and just kept at it. I know times when when things didn't go well for him at Williams. And in fact, he had sold Williams to he was from Philadelphia. a Philadelphia company, and Sunray Drugs, and they had trouble. So he had to buy it back, and it was a very tense time, I guess. Again, I was in high school at the time. And then later he sold it to Seabird, and that was in 1964 that he sold it to Seabird. I was in college. I graduated high school in 63, started college in 63. and I was sort of, well, I wanted to go in pinball then and he sold the company. But having seen ups and downs, I can certainly understand now why he sold my company. I didn't get to be there and so forth. Well, I got to be there, but it wasn't the same as staying there forever. I understand the difficulties. And as you do when, you know, you have your family business and, you know, there are times when there's ups and downs. And we have, you know, as I said, Lehman Brothers recession wasn't a comfortable time. We've had a few times that weren't so comfortable. What was, I mean, I can think of the 80s when nobody was buying pinballs. Matter of fact, I just thought pinball was over. And obviously you didn't. And then you got Williams Club. What was the low point? What was the time when you just thought, man, maybe it really is over? Did you ever have any of those moments? Which one? Did you have some times when people just said, Gary, you're just crazy, man. You can't do this. Well, when we started this company, people thought, well, why do we need another pinball company? You know, you had Gottlieb and Williams and Valley, which were separate when we started this, Williams and Valley. You know, and why do you need another one? And once again, needed a job. So I got somebody to invest in it. Kamiko, you know, who now has done a fantastic job with IGT and then Aristocrat and also with his company that he sold to Zynga. So he's done fantastic. But he was, you know, he was not going anywhere either at that time. So we were the misfits. And so we started this, you know, in order to have a future. So, yeah, there's been a number of times. We believe in the product that we're making. And certainly, again, with the Insider Connected, it's just developed to be so much more of a game than it was. And that's why they're, you know, I don't know what you put in the street today. I mean, you know, I believe in it everywhere. I believe in it for the home. But for the street, you know, we've got bar arcades developing. You've got, we do a big job with breweries. And the brewery, you know, they're often in industrial areas, but they're looking to bring people and to have them stay there. And there's nothing, pinball and beer go together. and where else are you going to get an 80-20 split than somewhere where they're really looking for an appropriate game. We do a whole series. You go on our website. We do a whole series every month, a brewery video, and you'll see them. Good locations that operators should think about. I made a note of that. That 80-20 caught my attention. Yeah. We got some 80-20s around here, but not that way. Yeah, yeah, I hear you. We got some of 70-30, but don't do anything less than 70-30. And that's part of the thing with pinball. People want to have pinballs in their street locations today. You need more than one. You need two, three. And, again, insider connected. We have the Stern Army. This is important. And the Stern Army, it's a street team. So an enthusiast will have a location. We've got over 1,000 Stern Army members, and they each have a location that they do an event at least once a month. A lot of people come into practice for it, but a lot of these events will have 40, 50, 60 people at them. They'll do launch parties, which when we have a new game, They'll bring the new game to the location, and the operator will bring the new game to the location. I have friends who have 60, 70 people at a launch party, but they keep coming. They've got to come back, and this is all stuff we've done to increase pinball earnings and pinball interest. and again, although 70% of our games are in the home the 30% that are in the street make 70% of the money but also they're advertising for us so to speak, they're free advertising if you would for people who want to have games in the home and our Insider Connected Locators is advertising for the operator, telling them where to find them but we have a lot of players and buyers that are first-time players, first-time buyers. We've done market studies, and we see and have adapted what we've learned. They're much more professional than the business that I ran in 1980 or what have you. The world's changed, and so we have a professional way of seeing what games are attractive, of what to do with the games. And with Insider Connected, we can see what the games as a whole are doing and what adjustments we might want to make. The future of Stern Pinball, is it all pinballs? Is that what we're going to do going forward? Do you look at other products, or can you talk about that? We also have a significant, I mentioned earlier, pay on business parts, accessories, and merchandise. And so, you know, you put a topper on a game, you know, it gets more attracted to it and so forth. But there's just so much for, you know, that business is still part of pinball. And that's what we do, and that's what we design. And, you know, we have three new Cornerstone games a year. Each of them have good, better, best. Cornerstone is our main game. We've just started a little while ago. First we did Dungeons and Dragons, and then King Kong. All of them are licensed or King Kong public domain But because of these titles that brings people to them So good better best pro premium limited edition limited edition for the collector The premium has all the play of the limited edition, not as much eye candy. We see more and more operators operating the premium. And, yes, it costs a little more money, has better resale value. It's attracting a better player. They're all mechanical action games with a toy in it. You know, Dungeons & Dragons has a dragon that's going to spit pinballs. Instead of fire, it's going to spit pinballs at you in the premium where it is going to only move left and right instead of all directions in the pro, and it's just a little more attractive game. The pros are still very good. I think back about the pinballs and when they became must-have on the route, it was usually tied to licensing. Yeah. You were a big innovator in development. Now everything's licensed. You know, the Rolling Stones come out or whatever the latest license is, people have to have it. Well, and again, you take King Kong, you should have it when it's – buy it anytime, but certainly buy it when it's first coming out because there's 300,000 people going to be looking for that game. And they're going to find it because we're going to advertise to you by putting it on our map. And they're going to keep coming because we're going to keep improving the games, updating the games, new code. And if they're connected, the code's going to load automatically. And we're doing this regular basis. I'm just going to read and look at this. And over the holiday weekend, we updated King Kong, Dungeons & Dragons, John Wick, Uncanny X-Men, Metallica, Star Wars, and Jaws, all in that week. So all these games got updated, and people knew that. And people came to play them again. And there was new play to them. This is an addition to things that aren't updated, but aren't updated code, but are features that we add for Insider Connected. The dungeon changes every week. We send out contracts with John Wick. We have a level up where in Venom, and Venom earns great. In Venom, whatever level you got to on the game in Chicago, you go play in Germany, it knows where you were, and it picks you up at that level. And it's been very, very effective. I'm a big believer in Cytokinect. And I'm a big believer in any product that has got connectivity. You want me to start my car, I will with my phone. You know, that kind of thing. Everything is like that today. Everything is like that. That's very true. Very true. If the product is not connected, it's not going to have a future. And I'm not talking just about games. I just mean in general. Everything is connected. Yeah, it's remarkable. And artificial intelligence, that's a whole other topic that we all have to learn how to embrace and leverage, or somebody will figure it out and beat us to the punch. That's true. You got to keep going forward, which is what I believe and what we do, because if you don't keep moving forward, you go backwards because the world is going forward. So true. So true. You and I are on the same page. Hey, both you and your dad were inducted into the AAMA Hall of Fame over the last few years. Yeah. How was that experience? Did John Youssi that coming? Was it emotional? or your dad, for goodness sake. It causes Sam to do something somewhat emotional because I'm emotional about him. And he deserved it. He was a pioneer. I may love games and pinball, but I'm a business guy, just a business guy. The creative people are the ones. George Gomez was just inducted because he's in George's history. George is fascinating. George's family left Cuba when he was five. He is probably the only trained designer, degree designer, industrial. He's got a degree in industrial design. He was a toy designer at the famous Marvin Glass Toy Development Company, started at Midway in our business. He's the only degree educated as a designer, designer probably in the business. There's a lot of software guys who design video games who are educated software people, but as to really, somebody who knows all different material, all different techniques, so he was trained to it. So guys like him are really important. I'm just the guy who needed a job and to start a company to get a job. Well, you certainly persevered through a lot of ups and downs, and it looks like things are going pretty well. And I'm just glad that you carved out a few minutes to tell us your story. Well, I'm always happy to spend some time with you. We've known each other for a long time. Well, we've both been doing it, and it's still providing a living, so I'm very happy about that. I think it was Bill Cravens who said, I don't know how well you knew Bill, but he said, in this business, we may not always eat country French, but we'll always eat. If you work at it, absolutely. Yeah, yeah, absolutely right. I don't want to be too dramatic here and say you saved an industry, but you've certainly got your fingerprints all over all aspects of it. For the best I can tell, you've been doing this 50, 60 years, and you persevered. I actually say I've been doing it 78 years because I was two when my father, he had been an operator, and then he became a distributor. Many of the early operators-distributors became distributors in order to get product cheaper and sooner. And in 1947, he came to Chicago from Philadelphia to see his supplier, Harry Williams, and sat behind Harry's desk kidding around, put his feet up on the desk and said, why didn't you sell me the company? Kidding around. So Harry says, I'll have to think about that. He had an airplane. He gets up and goes in his little airplane, flies around Chicago for three hours, landed and sold my father half of Williams. So I've been a pinball manufacturer for 78 years since I was two, and I've been around all my life. All your life. That's fascinating. Yep. Well, you have a great story. We may have to loop back around with you and do a Chapter 2 of this, but, yeah, this has been a lot of fun. And for me, some of the most fun is I actually do some research in advance of this. And just great respect for your story and your contribution to the industry. And, hey, you're a Colorado guy. So I saw pictures. You were up in Beaver Creek over the Fourth of July. So sometime I'll run up. Yeah. I was in the – Dan Sunday. I don't know if you know Dan. It's out by Bendix. So he's my friend up in the area. We all know Dan very well. Yes, I bet you do. So he has a house right on the top of the hill at Avon, across from Avon. So he has a party for the third, which is when the fireworks are in Avon. Then in the morning of the fourth, there's a parade through Vales, a little hulky parade. And at the beginning of it, there's, oh, about 40 motorcycles or so. And so we ride in that. I have an old bike there. And then later that night, I was in Beaver Creek, country music, and their fireworks up in Beaver. So, yeah, no, Colorado's great. That's where I go the 4th of July instead of here, Chicago. And, you know, I live half the time or more there. Yeah. I guess we have to go. A thing came up and said five minutes left in your meeting. So that was all the time. I don't care. But, yeah, we'll wrap this. But thanks for your time. And, well, we hope to see you again really soon, Gary. It's my pleasure. I hope to see you out in Colorado. Okay. Game over.