Stern Bullish Despite Lay-offs

Pinball News Website·article·analyzed·Oct 30, 2008

Analysis

claude-haiku-4-5-20251001 · $0.017

TL;DR

Stern lays off key designers amid 2008 financial crisis but vows to continue 4-games-per-year production schedule.

Summary

In October 2008, Stern Pinball laid off several key employees including designers Dennis Nordman and John Borg, and software engineers Keith Johnson and Dwight Sullivan, in response to the global economic crisis and US Dollar strength affecting overseas sales (50% of revenue). Despite the redundancies, Gary Stern publicly maintained optimism about the company's future, committing to producing four games per year and confirming three titles in various stages of development (CSI, two unannounced games).

Key Claims

Overseas markets represent 50% of Stern's sales revenue
high confidence · Gary Stern statement to Pinball News regarding impact of US Dollar strength on pricing
Dennis Nordman and John Borg were Stern's only in-house game designers at the time
high confidence · Pinball News reporting on redundancies
Stern intended to produce four new pinball machines per year going forward
high confidence · Gary Stern direct quote to Pinball News
CSI was in production sample stage; next game mechanically complete with software partially finished; game after that was laid out
high confidence · Gary Stern disclosure of pipeline status
Gary Stern planned to attend ATEI trade show in January 2009 to promote CSI and potentially other products
high confidence · Gary Stern statement to Pinball News

Notable Quotes

“We have every intention of continuing to build and develop four new pinball machines a year.”
Gary Stern @ October 30, 2008 — Core commitment statement addressing concerns about company viability post-layoffs
“Right now, we're going to make sure pinball exists”
Gary Stern @ October 30, 2008 — Emphatic reassurance about company's mission and survival intentions
“I wouldn't be doing it if he didn't see a future in it”
Gary Stern @ October 30, 2008 — Personal conviction statement addressing business viability concerns
“I'm doing it because I want to be here, because I love pinball and I want to keep at it.”
Gary Stern @ October 30, 2008 — Emotional closing statement emphasizing passion over financial pragmatism

Entities

Gary SternpersonStern PinballcompanyDennis Nordmanperson John Borgperson Keith Johnsonperson Dwight SullivanpersonJoe BlackwellpersonCSI

Signals

?
business_signal: Severe design talent loss raises question about feasibility of four-games-per-year commitment when both in-house designers were laid off and no clear succession plan disclosed beyond 'next three' games
high · Gary Stern 'refused to be drawn on where the design talent would come from for future games beyond those next three'
?
business_signal: Strategic shift toward out-of-house freelance/contract designers suggests potential cost reduction strategy or structural change in design workflow
medium · Gary Stern stated openness to 'using out-of-house freelance or contract designers' and cited Batman, CSI, and 24 as recent examples
?
business_signal: Stern Pinball workforce reduction in response to global financial crisis and US Dollar strength impact on 50% of overseas sales revenue
high · Gary Stern quote: 'given the economic situation in the world and the relative strength of the US Dollar, they had to down-size or right-size the company'
$
market_signal: Stern publicly commits to four-games-per-year production schedule despite economic crisis and workforce reduction, signaling confidence or determination to maintain market presence
high · Gary Stern: 'We have every intention of continuing to build and develop four new pinball machines a year'
?
personnel_signal: Loss of major in-house design talent (Dennis Nordman, John Borg, Keith Johnson, Dwight Sullivan) creates critical knowledge and continuity gap for future game development
high · Both in-house designers and lead software engineers laid off; reported as 'only in-house game designers'

Topics

2008 Financial Crisis Impact on Pinball IndustryprimaryStern Pinball Workforce Reduction and Designer LayoffsprimaryCurrency Exchange Effects on International SalesprimaryGame Design Pipeline and Future ReleasesprimaryIn-House vs. Contract Designer StrategysecondaryStern Pinball Business Viability and Market Outlookprimary

Sentiment

mixed(0.35)— Article reports negative event (significant layoffs of key talent) but frames it with Gary Stern's positive messaging about company future. Underlying concern about industry viability in 2008 recession contrasts with official optimism and commitment statements.

Transcript

raw_text · $0.000

Date: 30th October 2008. After a number of Stern Pinball employees were made redundant yesterday, Gary Stern insisted today that the company is now well positioned for the future and has a good range of games coming up over the next twelve months. The Stern Pinball factory Talking to Pinball News, Gary said that given the economic situation in the world and the relative strength of the US Dollar, they had to "down-size or right-size" the company "to adjust to the marketplace". That recent strength in the Dollar has led to Stern's products increasing in price for overseas markets which make up 50% of the company's sales. When combined with the expected slowdown in domestic sales as nationwide redundancies and budgetary belt-tightening takes its toll, Gary Stern felt it was the right time to reduce the staff size. Accordingly, some of the well-known names at the company were told their positions would be disappearing. Game designers Dennis Nordman and John Borg, software designers Keith P. Johnson and Dwight Sullivan and Director of Technical Support Joe Blackwell were believed to be among those leaving the company. Dennis and John were the only in-house game designers who created games such as Pirates Of The Caribbean and Indiana Jones, while Keith was credited with producing the most comprehensive rules ever found on a pinball machine with games such as The Simpsons Pinball Party and Lord Of The Rings. Gary Stern earlier this month Scotching any suggestions of the redundancies foretelling the company's demise, Gary told Pinball News "We have every intention of continuing" to build and develop four new pinball machines a year. "Right now, we're going to make sure pinball exists", he assured fans. He said CSI was currently on the line for production samples, while the next game is mechanically complete with the software part-way finished and the game after that was layed-out as well. He refused to be drawn on where the design talent would come from for future games beyond those next three, saying it was possible some designers would come back in-house but he wanted to keep the option of using out-of-house freelance or contract designers, just as he had for recent games such as Batman, CSI and the upcoming 24. Gary said he "wouldn't be doing it if he didn't see a future in it" and he intended to be in London in January for the ATEI trade show to promote CSI and possibly other products too. "I'm doing it because I want to be here, because I love pinball and I want to keep at it." Back to the News page Back to the front page