My bad habits lead to late nights and then alone Conversations with a stranger I barely know Swearing this'll be the last but it probably won't Welcome to Kaneda's Pinball Podcast, I'm your host Kaneda and I want to say thank you everybody. We are at 342, I think, club members right now. we are defying all of the odds and all of the haters are moaning and groaning and there's nowhere to read about their pain anymore because the pin side thread is locked. What I want to talk about on this episode is pricing of pinball and where does it go and why are we seeing prices go higher and higher and higher and we're not even at the ceiling and let's talk about that on this episode. We're going to stay focused on that but before I do that, I want to let each and every one of you know, if you missed out on a Rush LE and you are a Rush fanatic, we are going to do, Kaneda and Mike over at Automated, we are going to do the best, most fair way to get someone a Rush LE. We're going to put people's names in a hat. And on my Saturday morning spectacular, I think it's January 15th, I am going to draw a Rush fan's name out of that hat and you will be able to buy it for $11,100. I can't even believe every time I say that, that a Stern LE is 11-1 and it's rolling off my tongue as if I'm not laughing at the same time. But yes, we will give it to you at the MSRP of 11-1. And so to enter this contest to win it, you just have to email me at canadapinball at gmail.com, your name and your phone number. Because during the Saturday Morning Spectacular at 11 a.m. I will pull the name out of a Gucci bag. You know me, I'm fancy. And we are going to call you live and you have to pick up. And if you pick up, we will connect you with Mike and you will get your Rush LE. OK, and see, I'm not flipping it for a profit. I could have made money. I didn't think there was going to be much money to make on a Rush flip. I'll be honest, but there is. And I bet you could make two to three thousand dollars without doing any work whatsoever. So let's talk about pricing. And how did we get here? Remember when 10K by Christmas was the joke, right? All these years when Stern LEs were 6,000, then they were seven, then they were eight, then they were nine, then they were 10, and now they're $11,000. And when you look down at Rush LE, when you really look at it, there's not anything new in this game. There is nothing, nothing truly innovative, nothing new. It doesn't have stellar artwork. It doesn't have much other than the band collaborating, which is a lot. I will give them that. But the band wanted to do this pin, okay? And so this is my issue with where we're at right now. Something's going on. How did we get to this point where pinball machines now are 11,000 for a Stern LE and they doubled the volume of LEs? And here's the scary part. Even at 1,000 LE units, it's not enough. And I've been thinking about it. Like, how is this, like, why is this happening? Like, we are doubling the volume. We're raising the price. And now more and more people want it. And so I think it's come down to a few things. I think first and foremost, the reason why prices keep going up and Stern keeps making more and they're not even reaching a ceiling is simply this. Stern has zero competition. There's zero competition. Nobody can make pinball machines really efficiently. Nobody. There is nobody else out there that is doing what Stern does. They make a new game every three to four months and they make hundreds a week. Nobody is even close. So because they have no competition, Stern can take this market and the price of the games and the volume of games wherever they want. If they said they're going to make 2,000 LEs, they would still sell every single one. And competition drives prices down. And this is the problem now because there's zero competition. I mean, when you think about it, you've got Ultraman and Halloween. That's not competition. CGC can't make anything, it seems, ever. Like every three years they come out with a remake. Like nothing new, nothing creative. They're just making old designs over again. And then you've got Jersey Jack Pinball who's always all in on one game over 18 months to two years, right? And JJP doesn't even have multiple games on the line. It's like they can't even make you their old stuff. Imagine if Stern, if you went to stern.com, do me a favor, go to stern.com and click on games and read how many games they are currently making. And it's crazy, right? And that's why they've got a backlog of like 8,000 to 15,000 games. I don't know the total number. They won't tell us. But because they'll make so many games and they have the license to so many games and they have the permission to make all of those IPs. They have no competition And Stern knows that So they see all of these people spending all of this money They see what happened with COVID All these people want to make their game rooms into these elaborate arcades in their houses and people aren going out as much So Stern sees this right We got no competition and we got way more people who are now into this hobby than ever before. And so when you look at it just through supply and demand, they're not even near fulfilling the supply of the demand. And people are seeing it now. Even if you want a premium, you have to wait eight months. And even if you want a pro on some titles, you're waiting months. I mean, every single used Stern machine has pretty much gone up in value simply because of supply and demand, except for Led Zeppelin LE. Let's not fool ourselves. So now we're at $11,000 for the LE and we're at $9,000 for the premium, which is nuts to me. I mean, it's absolutely nuts and they're going to keep raising the prices. And so now if you look at Jersey Jack pinball, their prices are going to go up real soon. They're looking at all this being like, we're giving away our games at $11,000 at $12,500. I mean, they're going to keep going up and up and up. I think what the new CE price now is $13,500 for Jersey Jack. You best believe it's going to be $15,000. And I'll say this right now. Toy Story will be Jersey Jack's most popular title ever. And at $15,000, they will sell out on day one of every single collector's edition. even if they haven't shown us they fixed any playfield issues. And that's just a testament to the demand. And the majority of people who buy these things are not on pin side, okay? There is a huge army of people that don't want to spend hours of their day on the toilet on pin side arguing with other grown men about pinball. The majority of people who buy pinball machines are more mature than that and have better uses of their time. Now, of course, I have to read Pinside to get content for this show, but at least I'm making a few bucks to do it. But here is the part that I've been thinking about more than just the supply and demand part. I think the real issue is this. A pinball machine has become a flex item. It's become an item people use to flex and to say, hey, look at me. Look at what I got. I get it makes people feel good. It's fun to play. It's one of the most enjoyable flex items you could possibly invest in, right? Cars are more expensive. Watches are more expensive. If you look at the world and the items people buy to collect and to flex with, stuff like sneakers and watches and cars, the issue with pinball is this. It's only expensive if you look at it through what pinball used to cost. And if you look at the amount of millionaires in America, how many do you think there are in America? There are 20 million millionaires in America. Just think about that. 20 million millionaires in America alone. Now, if only 500 of them are into pinball, which we know there are more than 500, then every single LE is sold out already to those people. And then if you're a millionaire, and people know this, if you're a millionaire, $10,000, $11,000, $15,000 is nothing, especially to the multimillionaires that are making a lot of money every month, every day, every week. And so as an item, this isn't really that expensive to a vast majority of people. And if you think about pinball and who does it appeal to, right? 40 to 60 year old men who grew up as geeks in the arcade playing arcade machines and pinball machines. The audience and the target for this seems to be a demographic that is probably better off financially. So then you have thousands and thousands and thousands of these men who are into pinball, right? I think on a global level, if I were in Stern's research and marketing department, I would probably say that pinball has a collector base somewhere around 30,000 to 50,000 people who buy a pinball machine, right? They might own one. I don't know the numbers. Stern knows the numbers better than I do. And then you look at how many games can we possibly make a month, a year, right? And then it becomes super scary when you think about where are these prices going to go? And I've always said this, in the world of marketing, this is a really interesting phenomenon. The more you charge for something, the more rich people want to show you they can acquire it. When James Dyson came out with his first vacuum cleaner in the 80s, it was $3,500 for a vacuum in the 80s. And he launched it in Japan because part of Japanese culture was they just wanted the most expensive thing they could get. And they attributed a high price with high quality. And this is what's happening in pinball. The more Stern charges for an SLE of Elvira, the more they'll get. The more they say we're only making $200,000 and they're 20,000 that's gonna be the exciting thing to the real collector to the collector who doesn't have to worry about money and wants the ultimate flex item now I know what you're saying you're saying Canada not everybody who buys pinball is buying it to flex it we buy it to play we buy it for enjoyment we buy it because we love the theme and you absolutely right the majority of people I would say 80 of people who buy a machine they buy it to play it They buy it because they enjoy it They not buying it as an investment They not buying it as a flex item But look at what's happened in the market over the last two to three years. It has been the people that have shown they will spend more on these. They've raised the prices of everything. They're lifting the market up on their own. So the 20% that are willing to pay more, these pinball companies are still looking for the ceiling. So the scary part for all pinball buyers right now is deep down, we all know we're willing to pay just a little bit more, just a few more hundred, just a few more thousand. And we know if we really wanted to, each and every one of us who's ready to drop 10K on a game, that we could sacrifice something else easily and spend 15,000 on a game. And then if it was a really special dream theme, right? I'm talking in the back to the future realm and the Harry Potter realms, you're starting to look at $20,000 to $30,000. You would justify it. You would. And some of you out there who are listening to this right now, you know who you are and you know I'm right. Now, do I want to spend $20,000 to $30,000 on a pinball machine? No. Do I want a pinball machine to cost as much as a car? No. It should never cost as much as a car because you and I both know that if it's a dream theme and we have to have it, right? This is what these companies know. We don't want to sell it. You don't want to have to resell your back to the future. You never want to let it go. And this is why you want to get your dream theme and you want to get it for a good price and you want to hold on to it forever. And you don't want to look at your checking account at the end of the month and be like, holy crap, honey, I just spent $25,000 on a pinball machine. Nobody wants to see that dent anywhere in their finances. And that's why, you know, as people go and spend $36,000 on Pirates of the Caribbean collector's editions, which you could get for $12,500 for an entire year and nobody wanted it, it's sending a message to all these companies, you're not even close. You're not even close. Let me ask you right now. Just imagine this scenario. If Jersey Jack said we're only making 1,000 Toy Stories and that's it, what do you think they could charge for each one? And I mean just 1,000. They're all collector's editions. We're only making 1,000. I bet you they could charge, if only 1,000 were ever gonna be made, they could charge 25,000 for each and sell everyone in this market right now. That's $25 million, and they only have to make 1,000 of them, and then they can move on to their next game. And I mean it when I say it, and they're never gonna take this advice because for some silly reason, they wanna overwhelm their manufacturing because they can't compete at volume. Jersey Jack Pinball, if they wanted to, could go up market like this. They could. They could become the Bentley and the Rolls Royce of pinball and say each title is only 1,000, they're 25,000 each, and they would have easily, on a global level, 1,000 of the multi-millionaire pinball collectors on a waiting list to get each and every one. But the reason they're not doing it, the reason they're not doing it is because all of these legacy pinball people, they were taught that volume equals success. That 22,000 Adams family being the greatest selling game of all time. That's what Pat Lawler's chasing. And he's at the helm over at JJP. He wants games to be out on location. That's what they want. To them, a pinball machine succeeding is seeing it out in the world and seeing all these people enjoy it. Now, from a business standpoint, it makes more sense for them to make fewer games and charge a lot more. Now they're not going to do it. They're not going to do it and they don't need the money. That's why they're also not going to do it because the Abbott's family are billionaires and they're making multi-millions of dollars in their other business ventures. I bet pinball for them is operating at a little bit of a loss, maybe a little bit of a tax write-off there. Even if it is making them money, it's lappable compared to the other stuff they're making in the finance world. But they love pinball, right? That's what drives everybody into this hobby is you love it so much. And that's why the prices just won't go down because you love it. And something you love, if you can have it for just 10, 15, 20, it's not like a house. It's not like a Ferrari. It's not like a Daytona Rolex. This item, this unnecessary item that is a luxury item, it is a luxury item, but it's a cheap luxury item and it's fun. That's the thing about pinball. Like what's more fun, a Rolex or a pinball machine? Of course, a pinball machine is more fun. What's more fun, a car or a pinball machine? Now, I would argue cars are more fun than pinball. They get you out. They're more enjoyable. They're more visceral. Absolutely. But I put them both in highly entertaining box. Like they're both highly entertaining. But the difference between cars and pinball is this. And this is the big difference. And I know people hate carguments, but I'm just going to say it. When it comes to cars, you get what you pay for. When it comes to pinball, you don't really get what you pay for. When you pay or for an Elvira 40th you don get nearly what you paying for You don You get some manufactured scarcity but they not putting more in the game They not even giving you a topper people for 20 grand. And that is the other thing. You know, Mia, for years, I've been talking about how pinball machines can cost lots more money and these companies don't realize it, but I've always wanted the money actually to go into the machine so that when you look at a machine that's $15,000. It looks like a $15,000 machine. And this is why right now, when I look at Stern pricing Rush LE at 11.1, I think everyone who's buying one is getting ripped off. I don't care. I don't care how much you love Rush. I don't care how it means a lot to you. And I don't care if it's an emotional purchase. Just look at the game, people. Look what's in it. There's nothing new in it. There's nothing innovative. They took stuff off the shelf and put it in. The art package, everything about it, it's just middle of the road. It's a middle of the road game. Rush looks like it came out 10 years ago. There's nothing that feels modern really about it, but that's what Stern's done. They've realized all we need is IP that millions of people know and make a few thousand of them and then we're on to the next. It's a genius model and they're going to keep raising the prices. The next thing we're going to see is a lot more microtransactions from their Stern Connected and Stern Pinball. I wish I could invest in Stern. I don't want to buy these Sterns at these prices. I don't. I want to invest in the company. If Stern went public, I would buy stock tomorrow. The investors that bought this company and saved Stern way back in the day, Gary has made those men so rich. And when I see people defending Stern, it's weird because people always defend Stern pricing as if they're investors in the company, but we're not. We're customers. And so that is why in a world in which Stern has no real competition, nobody else can effectively or efficiently get games out every year. Stern's going to keep raising the prices. They're not going to put a lot more into these games because they don't have to. And so pinball is going to be a lot harder on our wallets moving forward. And I think that's going to slow down the hobby, but just a little bit, because when you've got 20 million millionaires in America, you've got 56 millionaires globally, 56 million people globally with a million dollars or more, and a lot have a lot more than a million dollars, and you're only making 200 Elvira 40s, and you've only made 500 Guns N' Roses CEs, and there's only 200 Pirates of the Caribbean collector's editions ever, John Youssi why we're not even close to where this is going to go. And the last part I'll make is this. Pinball scalping and pinball flipping and dealers marking up these games will be the new reality. If you're not one of the big distributors, you have to do it. You have to do it. Like if you don't get many LEs, why would you give away your LE for MSRP? If you're only going to get three, why would you sell them for 11.1? Now, some distributors might get 50 or 100 and then they make $1,500, $2,000 on every one they sell. But for the smaller dealers, I mean, you know, it's like when a little car dealership gets the Dodge Demon. This isn't the big Dodge dealership. It's the tiny one, right? In like South Dakota, like they're not going to sell their Demon for MSRP. And so we're going to see more and more of that. And we're going to see more and more of every single LE is already sold out. It's kind of weird, right? When I talk to my distributor friends, they don't have to sell the games, but they still have to, you know, deliver the games and help with maintenance issues and help the customers out with customer service. So distributors are not going away, but man, the prices are going to keep going up and up and up. There's nothing we can do because like I said, to a millionaire, these things aren't even that expensive. And if anybody really wants to, you could go from 10 to 15 and you can make a simple little sacrifice in your life and you could get it. As I said, the silver lining is as the prices get higher, each and every one of us will most likely just wait for dream themes. You can't run out everything, especially with the premium being 9K. It's crazy to me. It is absolutely crazy to me. And that's the ultimate Trojan horse win is that Stern took their volume pins up in price so much now. That's the real Trojan horse is now that the pro is the price the LE used to be. A Stern pro is more expensive than Tron LE was. and nobody seems to realize that. The operator now has to have 6,700 people put a dollar in before they make a single dollar on the game. Very, very smart marketing. It's an interesting hobby. I never get tired of covering it. I never get tired of talking about it. I would love to know what your thoughts are on pricing and I'm gonna read some of your responses on my next show. So hit me up at canadapinball at gmail.com. Happy Thursday, everybody. We'll talk to you soon and thank you again for your contribution and being part of the Canada Club. I love doing this show and I love it even more knowing that this show is going to just the club members. Have an awesome one.