Episode 1024: "Scalping Helps NIB Sales"

Kaneda's Pinball Podcast (Patreon feed)·podcast_episode·19m 37s·held·Nov 20, 2024

Analysis

claude-haiku-4-5-20251001 · $0.028

TL;DR

Kaneda argues scalping and machine appreciation are necessary to sustain NIB pinball sales.

Summary

Kaneda argues that a healthy secondary market where machines appreciate in value is essential for sustaining new in-box pinball sales. He criticizes Jersey Jack's redemption arcade strategy and defends scalping as economically necessary, claiming that if machines consistently lose value, collectors will stop buying new games and the industry will collapse. He uses Metallica (LE) as the only recent example of a machine that gained value.

Key Claims

Only one machine in the last four years has been 'scalpable' (able to flip for profit): Metallica LE Remastered. Jaws, James Bond, Foo Fighters, Venom, James Bond 60th, and no Spooky or Jersey Jack games achieved this.
high confidence · Kaneda, discussing market trends in Metallica LE secondary market context
If new in-box sales dry up, pinball as an industry will fail and become only about restoring classic machines.
high confidence · Kaneda's core economic argument about industry sustainability
Jersey Jack Pinball's redemption arcade initiative is misaligned with their target market and Jack Guarnari's vision has always been to bring JJP machines to redemption games.
medium confidence · Kaneda discussing IAPA announcements and attributing motivation to Jack Guarnari
Godfather LE buyers are only getting ~$9,000 on secondary market despite $12,000-$15,000 retail pricing.
medium confidence · Kaneda discussing secondary market depreciation examples
Metallica LE accessories cost approximately $2,400 total for complete accessorization, with a single topper being ~$1,000.
high confidence · Kaneda discussing recent Metallica accessory pricing announcements
Godzilla LE machines sold for $18,000-$19,000 during COVID peak, and there are fewer Metallica LEs made than Godzillas.
medium confidence · Kaneda comparing historical pricing and production run sizes

Notable Quotes

“If new in-box sales dry up, pinball as we know it will be done. It will become a hobby in which we buy games that have already been made and it'll just be about restoring the classic games.”
Kaneda @ ~5:00 — Core thesis about industry viability dependent on NIB sales
“The only time that has happened in the last four years is Metallica LE Remastered. Jaws wasn't selling for over $13. James Bond wasn't. Foo Fighters wasn't. Venom wasn't. Not a single game.”
Kaneda @ ~7:30 — Specific claim about scarcity of appreciating machines
“I don't understand why Jersey Jack is even applying any effort or resources to this endeavor.”
Kaneda @ ~2:30 — Direct criticism of JJP's business strategy pivot
“The thing most people want to redeem in the world of pinball is a return on their investment when they buy your $12,000 to $15,000 game.”
Kaneda @ ~3:30 — Reframes redemption concept to critique pricing strategy
“If you destroy that [secondhand market], I'm telling you, you're just gonna destroy the entire hobby because nothing is gonna go up in value.”
Kaneda @ ~15:00 — Warning about unintended consequences of opposing scalping
“You're an old toy for old men. That is what you are. And everyone's going to get old. The next generation of old men that are going to be into pinball... It's going to be Killian and Cassian.”
Kaneda @ ~27:00 — Commentary on demographic and growth strategy
“I've scalped many games over the years and let me tell you who buys my games from me. Multi-millionaires. They don't even blink when they write a check.”
Kaneda @ ~18:00 — Personal anecdote challenging moral arguments against flipping
“When this hobby finally wakes up and looks at itself in the mirror, you got to go more nostalgic themes. You got to create a world under glass. You got to make magic.”

Entities

KanedapersonJack GuarnaripersonJersey Jack PinballcompanyStern PinballcompanyMetallica LE RemasteredgameMetallica LEgameGodfather CEgameGodzilla LEgame

Signals

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market_signal: Widespread and consistent depreciation of new pinball machines on secondary market, with Metallica LE Remastered being anomaly. Most games losing $3K-$5K in value within months of release.
high · Kaneda explicitly states only Metallica LE in 4 years has appreciated; cites Godfather depreciation to $9K from $12-15K retail; notes Jaws, James Bond, Foo Fighters, Venom, James Bond 60th all depreciated
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sentiment_shift: Community now actively shaming and downvoting secondary market flippers, marking departure from historical acceptance of resale premiums. User listing Metallica LE for $17K received 15-18 downvotes.
high · Kaneda notes 15-18 thumbs downs on Metallica listing; contrasts with Ghostbusters LE era where resale was normalized; describes current backlash as unprecedented vitriol
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product_strategy: Stern pursuing aggressive version tiering (Pro/Elite/Premium/LE) with significant accessory upselling. Metallica Premium + accessories approaching $13K before markup.
high · Kaneda states Metallica accessories total ~$2,400; single topper $1,000; premiums with full accessories nearing $13K; calls pricing 'bonkers'
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industry_signal: Host argues current pricing and depreciation trajectory threatens NIB sales viability. If machines cannot hold value, collectors will exit market and manufacturers will fail.
high · Core thesis: 'If new in-box sales dry up, pinball as we know it will be done.' Repeated warnings about cascading market collapse if depreciation continues
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product_concern: Jersey Jack Pinball's redemption arcade strategy fundamentally misaligned with $12-15K machine price point and complex rulesets. Consumers seeking quick-play ticket games, not deep strategic games.

Transcript

groq_whisper · $0.059

0:00

Old habit's out. Old soldiers just fade away. Old habit's out. Hard as that November rain. If I had a pinball company, I would make sure that every single move I did was targeting the individual that I know wants to buy a pinball machine. I would put all of my company resources into creating the best possible products that would make those people, when they see what I've developed, have to hand over their money because I made exactly something that they've been waiting for. That is the brief I feel like that should be on the wall of every single pinball company. And yet time and time again, we see moves like we saw today at IAPA. Jersey Jack Pinball is now trying to bring their super expensive pinball machines into the world of redemption games. They would like people to play pinball and go to locations and play a pinball game to get back tickets to trade in those tickets for some cheap gifts. What about $12,000 to $15,000 pinball machines aligns with the behavior of people that go to redemption arcades? People want to play some skeeball. They might want to do some pop a shot, you know, those fun, quick games where you get some tickets, but the games themselves are super approachable, super easy. Who's going to go play pinball machines that are so complex? Who's going to try to get deep into Elton John or The Godfather or Toy Story 4 for the chance to win some redemption tickets. It doesn't really make much sense. And I just don't understand why Jersey Jack is even applying any effort or resources to this endeavor. And then when I hear from Jack Guarnari that turning pinball into a redemption game and turning Jersey Jack pinball machines into redemption games has always been a dream of his since he started this company. I don't know people. I really don't know anymore really what motivates these owners, really what motivates these people at the helm of these pinball companies. What I can tell you is this. The thing most people want to redeem in the world of pinball is a return on their investment when they buy your $12,000 to $15,000 game. If I buy a $15,000 Godfather, I would like to redeem somewhere near maybe $13,000 for my investment. You know what people are getting for their Godfather CEs? More like $9,000. And there's this war going on in pinball against the secondhand value of games. I'm seeing it everywhere. A dude just listed a Metallica LE, the new one, the Metallica Remastered LE. He listed it for $17,000.

3:23

That gentleman is getting thumbs down by everybody. Negative like 15 or 18 thumbs downs on his post. He has a game. He bought something that has more demand than supply. He's supposed to just give it away, right? He's supposed to do what with it now? Say he wants to sell it. For whatever reason, he wants to sell it. Now, look, I know what you're saying. Well, Kaneda, if he just wants to get out and get his money back, nobody would have a problem with that. Okay, so he should sell it for what? $13,000? That's what everybody would love him to do. I want to take a counter argument to this whole thing. I want to play devil's advocate. If we want this hobby, if we want this hobby to survive, I mean this, like as a new in box hobby, because remember, if people stop buying new in-box games, all of these pinball companies are gonna go out of business. Let me repeat that. If new in-box sales dry up, pinball as we know it will be done. It will become a hobby in which we buy games that have already been made and it'll just be about restoring the classic games and keeping the games that are in the market running, But there will be no new in box pinball machines. There will be no pinball companies thriving if nobody buys new in box. And new in box sales are going to plummet and tank catastrophically if no new in box games hold any value And also new in box sales are going to suffer people And I just going to say this They going to suffer if no new in box game ever goes up in value. If every single game that comes out goes down in value by a significant amount of money, what do you think that's going to do to the pinball market over the next five years. What do you think that's going to do to all the people that used to buy new in box games and either get out for a minimal loss or actually get out with a little bit of a gain? You know, there's only been one machine in the last four years. I mean, this one machine that has actually been scalpable, right? Is that a phrase scalpable where you could actually flip it for more money than you bought it for. And the only time that has happened in the last four years is Metallica LE Remastered. Jaws wasn't selling for over $13. James Bond wasn't. Foo Fighters wasn't. Venom wasn't. James Bond 60th wasn't. No Spooky Game was. Heck, no Jersey Jack game was. Not a single game. And when you have a large portion of this hobby, and when you have a large demographic of this hobby who consider themselves to be collectors. Think about that for a minute. So then collecting is just dead. There's no reason to collect any of these games. I mean it. There's no reason to collect these games because if they don't hold any value whatsoever for collectors, then you might as well just get the premium. And then heck, why stop there? You might as well just get the pro every single game it's the same exact experience on the pro as it is on the other games for the most part right there's some mechanical things here and there but the software is identical in every single game there is no game that removes any of the real sort of feel and emotion and experience from the game when you buy the cheapest version of the game so i don't know you know i'm just sitting here at night. Brenda's flying to Ireland and I'm thinking about this hobby. I'm looking at these Metallica accessories. They just got dropped on us today. A thousand dollars for one of the cheapest looking toppers ever. Expression lighting kit is expensive. Side armor, shooter knobs. I think if you bought everything, someone who bought all of it, it was something like $2,400 for everything to accessorize a Metallica premium. You know, now we've got like premiums with everything on it are getting close to $13,000. It's just kind of crazy. And I don't know about you, but I've just been feeling like, man, like where'd the fun go? Like where's the enthusiasm around these games? And at these prices, it's all just gone kind of bonkers. And I just felt a little bit like it was refreshing to see, well, finally a game where there's more demand than supply.

7:57

Finally a game where, like, people were fighting to get their hands on it. We haven't seen that in four years. But the problem nowadays is when Stern did that, now everyone's angry. Everyone doesn't want that. Everyone wants to thumbs down anyone who wants to scalp that machine. And, look, I've been in this hobby for 12 years. And if you got a Ghostbusters LE and you got it for sticker and you sold it for a couple thousand over sticker, you weren't getting yelled at by everybody. There wasn't this vitriol like there is now. And I don't understand it because, you know, you used to get a Ghostbusters for like $8,500 and then you would scalp it for $10,500 and everybody won. Well, now that the LEs are $13,000, add a couple more grand onto the scalp price and $17,000. In terms of like the ratio you want over sticker for the game, it's kind of the same. Now look, do I think this guy's going to sell that Metallica for $17,000? Yes, I do. Absolutely. Because you know what? Someone's doing the math. And someone's looking at the damn premium, all the accessories, and is like, well, am I going to drop $13,000 on an unlimited run game? If I spend $17,000 on this LE, at least it's going to probably hold value better than the premium. And I think Metallica LEs, because it's such a popular theme, I don't think you're ever going to see one for $13,000. You're not. I just don't ever think it's going to go that low. And people, remember, I saw Godzilla LEs. Godzilla LEs were We're going for $18,000 to $19,000 during the height of COVID. Godzilla, there's a thousand of them. And there's half as many Metallicas. Now yes Godzilla might be the best game of all time but now they made so many of them And I would argue maybe the black and white is the nicest version of Godzilla And Stern is teasing that they're never going to make it again. They're going to make it again. But my point being is this. If we go to war against the secondhand market in pinball, and we get angry that people want to sell their machines for more than they paid for them, we will inadvertently destroy this hobby we will it'll be over they might as well then just make one version of a game and then you might as well just go to a damn arcade and play it you might as well just stop losing thousands of dollars on every single new in box game because the candle has to burn both ways if you're going to lose three to four thousand dollars on every single Stern Elite. If you're going to lose $5,000 on every single Jersey Jack CE you buy, then you got to be able to make $3,000 to $5,000 on the super hot titles that actually have the demand. And I don't think people should come out with their pitchforks when those moments happen. If you grab a Harry Potter CE and it sells out on day one, yeah, your Harry Potter CE might be worth $20,000. And yeah, you might want to sell it. And you know the reason the guy might want to sell it? Because he might have lost $5,000 on Godfather. He might have lost $4,000 on Toy Story. And he just wants to recoup. He just wants to recoup some of that loss. And he's not allowed to do it Because the price police will come out, these moral high horse people, and come after anybody that wants to do what they want with the game they bought. And I'm sorry, ladies and gentlemen, but if you get a game fair and square from a dealer or a distro, you got on a list and you bought the game. It's yours to do what you want to do with it. Don't listen to anybody else. And it annoys me. It annoys me. Should I sell my house? When I go to sell this house, should I sell it? it for what I paid for it because it's not fair that I made money off of it. Oh, but if the guy unboxes the Metallica and plays it for a few months, then he's allowed to sell it for $17,000. Is that the rule? That you have to unbox it and play it? Right? Like all these distributors do when they have their friends stream the games and it's like, yeah, we're not going to scalp games. We're just going to open them up. You can't scalp anything, but they have to open up the games to sell them below map pricing. It's all stupid. This hobby needs to wake up. Games that are a year old, you should be able to get them on sale, advertised from a dealer. Games that are super popular and have gone up in price, let people sell them for what the market will bear. If you destroy that, I'm telling you, you're just gonna destroy the entire hobby because nothing is gonna go up in value. Everyone is gonna avoid new in-box pinball. and when everyone starts avoiding new in box pinball, then what happens, right? What's gonna happen to these companies? And I don't know how you don't avoid new in box pinball because at these prices, it's all stupid. Everyone's losing so much money. And maybe you're just so wealthy and I know some of you are, but most of you are not. Most of you cannot afford to buy these things and lose this much money on every single game. And you absolutely know it. That's where I'm at right now, people. we need stuff to go up in value. We need stuff to go up in value to counteract the stuff that's lost so much value. You know, when I gave away my Metallica at MSRP, I knew I left a lot of money on the table. And if I tried to sell it for more money because I lost a lot of money in other areas, I wasn't allowed to because I'm a public figure, right? I got to do what's right. And when you try to apply like this morality to these super expensive games, when you look at the medium income of the average person on planet Earth and you look at how many people are suffering out there in the world and you look at how many people can't afford their groceries or their mortgages or their car payments, you're going to come at somebody who's going to make a profit on a pinball machine as someone who's a bad individual. Let me tell you this right now. I've scalped many games over the years and let me tell you who buys my games from me. Multi-millionaires. They don't even blink when they write a check for like 18 for that or 22 for that. You know, every time I've sold a game, most of the people who bought them, they're not on pin side. They had no idea the game was even coming out They just a fan of the theme and they have disposable income They not upset They were just happy to get one And it does bring up this entitlement issue it like well pinball fans who really wanted the game they feel entitled to getting one well let me tell you something then get on a list then build a relationship with a dealer and a distro then figure out what you need to do to get your hands on a game if you're just going to kick and scream when someone gets one because they have a relationship and even if that person just wants to buy it to flip it. So what? So what? How are you going to stop that? If these companies really wanted to stop that, then they could, but they don't want to. It's healthy. I'm telling you right now, it seems like a terrible thing, but it's healthy to have a secondhand market where people are flipping these things for more money. Watch what's going to happen. It's all going to go away. It kind of all has gone away. Metallica has been the only game, as I said, in four years that actually went up in value. And I'm looking at now, there's thousands of you out there, thousands of you out there that have bought pinball machines, new in box. And yeah, they're bringing you joy. They're bringing you pleasure. But a lot of you out there are going to get bored of those games. And when you go to move them on to get the new, new in box games, which are so expensive to begin with, it's going to sting like never before. And every year that this goes on, more and more people are going to stop buying new in-box games. And we're not going to go out and play pinball to get redemption tickets. I have no idea what goes on inside the head of Jack Guarnari. If I could like morph into Jack Guarnari for a year, you know, like T-1000, like Terminator style, I would change a lot of things with this company. I would go get themes people want. I would stop making so many versions of his games. I would stop pricing himself out of the market. There's so many things this company should be doing differently. But you know, what do I know? I'm just watching what happens out there. I mean, they're seemingly very excited about this redemption thing. I mean, come on, guys. I mean, look at IAPA for a minute, like IAPA and pinball, like pinball is like this old thing showing up at IAPA. And it's so outdated, Like it's so outdated. Like just embrace what you are. You're an old toy for old men. That is what you are. And look, everyone's going to get old. And the next generation of old men that are going to be into pinball because you have to be an old man to make enough money to buy these damn games. Guess who it's going to be? It's going to be Killian and Cassian. It's going to be your children when they grow up. That's the next generation of pinball. And if they want to expand pinball right now, it's not doing what they're doing now. The way you expand pinball right now is you get people like us to invite a friend into the hobby. And you find a way to incentivize people to make that invite to a friend. So if you bring someone in and create a new in-box pinball buyer, we're going to give you some discount on the next game you buy. Do they try stuff like that? I've never seen a single pinball company reward someone for bringing somebody new into pinball. They don't even know how to grow. They don't even know how to measure growth. They just think if they do like contemporary themes, new people are going to buy pinball. It's not going to work. They don't have the money. When this hobby finally wakes up and looks at itself in the mirror, you got to go more nostalgic themes. You got to create a world under glass. You got to make magic and you got to give us everything now for this much money. It's that simple. I don't want to go into Dave and Buster's and see a bunch of Jersey Jack games. That's not going to do it. That's not going to do anything for your product. Nobody who goes into Dave and Buster's goes home later that night and says, honey, I had so much fun on that game. Hey, do we have $15,000 lying around to go buy one? No, they got a few redemption tickets and they walked out with like a rubber eraser. everybody canada's pinball podcast thanks for the support have a good night i lost my voice oh So we start to fade away Oh, how we start And how we end up To be our own Oh, how we start Oh, so did I just fade away