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Episode 828: "The Price of a Stern Premium"

Kaneda's Pinball Podcast (Patreon feed)·podcast_episode·20m 14s·analyzed·Jul 31, 2023
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Analysis

claude-haiku-4-5-20251001 · $0.030

TL;DR

Stern distributor margins, demand softness, and upcoming game pipeline analysis.

Summary

Kaneda discusses the distributor cost structure for Stern Premium machines ($8,000 cost to distributors vs. $9,799 MSRP), explores pricing pressures and demand concerns in the post-COVID market, analyzes recent Venom reception at shows as mixed, and speculates on upcoming releases including rumors of Matrix by Dutch Pinball and He-Man by American Pinball.

Key Claims

  • Distributors pay approximately $8,000 for a Stern Premium machine

    high confidence · Kaneda states this is what he's 'hearing' from industry sources regarding distributor cost

  • Stern Premium MSRP is $9,799 with lowest MAP price of $9,500

    high confidence · Kaneda directly cites Stern's website pricing

  • Stern is ramping up a new factory in August focused on manufacturing capacity

    high confidence · Kaneda states this as known fact, unclear if confirmed or reported rumor

  • Godfather CE (Jersey Jack) was revealed 5 months prior with minimal unboxing reports

    high confidence · Kaneda expresses concern about lack of unboxing videos/content as of early August

  • American Pinball is making Galactic Tank Force Signature Editions for $17,500

    high confidence · Kaneda references these as confirmed products not yet widely unboxed

  • Venom production will be 1,000 units at $13,000 despite lower theme popularity than past releases

    high confidence · Kaneda questions this production decision compared to Stranger Things (500-600 units)

  • Venom reception at Southern Fried Gaming Expo was 'mixed bag'

    medium confidence · Kaneda synthesizes PinSide forum reviews and notes lack of clarity on code mechanics

  • Keith Elwin releases create 'gravitational pull' that overshadow concurrent game releases

    medium confidence · Kaneda's opinion based on market observation, used as reasoning about Pulp Fiction timing

Notable Quotes

  • “It is right on the nail, maybe give or take $100, but $8,000 is a distributor's cost for a premium.”

    Kaneda@ 5:31 — Key pricing revelation that anchors the entire episode's analysis

  • “If you spend $15,000 on this game, you're going to say it's great... then two weeks later you're going to list that pinside post. We know you're lying.”

    Kaneda@ 10:12 — Commentary on collector psychology and secondary market behavior

  • “FOMO is not dead. It's just dead on themes that you have no FOMO for.”

    Kaneda@ 8:53 — Reframes the 'FOMO is dead' narrative circulating in community

  • “When Jaws comes out and Jaws Super Ali comes out, watch people fight over each other to get a $25,000 version of Jaws.”

    Kaneda@ 14:09 — Prediction about strong future demand for specific licensed IP

  • “If they made a Barbie pinball machine, it would crush. Barbie pinball would sell more than Venom.”

    Kaneda@ 15:38 — Strong opinion on IP appeal and market demographics

  • “Roger Sharp is working with Dutch Pinball. A Dutch Pinball, the Matrix.”

    Kaneda@ 17:56 — Rumor about upcoming Dutch Pinball title with noted designer involvement

Entities

Stern Pinball Inc.companyJersey Jack PinballcompanyAmerican PinballcompanyDutch PinballcompanySpooky PinballcompanyChicago Gaming CompanycompanyPedretti GamingcompanyPlanetary

Signals

  • $

    market_signal: Distributor cost for Stern Premium is approximately $8,000 with MSRP of $9,799, creating ~$1,800 margin opportunity; lowest MAP is $9,500, suggesting tighter margins than previously assumed

    high · Kaneda cites $8,000 as distributor cost from industry sources; directly references Stern website pricing of $9,799

  • ?

    business_signal: Stern is ramping new factory in August; capacity increase typically signals demand expectations, but timing raises questions about post-COVID demand sustainability

    medium · Kaneda states 'Stern is ramping up a new factory in August' and frames capacity increase as risky if demand has softened

  • ~

    sentiment_shift: Community perception of recent Stern/Spooky themes as 'lackluster' over past two years; FOMO is being reframed as selective by theme rather than dead

    high · Kaneda: 'we've had two years of somewhat lackluster themes in pinball'; 'FOMO is not dead. It's just dead on themes that you have no FOMO for'

  • ?

    product_strategy: Stern increasing production volumes (e.g., 1,000 Venom units) despite lower theme popularity relative to historical releases like Stranger Things (~500-600 units)

    high · Kaneda questions: 'With a game like Venom, they're still going to make 1,000 Venoms at $13,000? Did they even make 1,000 Star Wars? Did they even make close to a thousand Stranger Things?'

  • ?

    gameplay_signal: Venom at Southern Fried Gaming Expo received mixed feedback; speed-focused gameplay noted; premium mechs beyond ball lock not impressive; code mechanics unclear from show play

Topics

Distributor pricing and margin structureprimaryPost-COVID demand softness and inflation impactprimaryManufacturing capacity expansion (Stern new factory)primaryVenom reception and gameplay mechanics criticismprimaryUpcoming game pipeline and release timing strategyprimaryTheme licensing strategy and IP selectionsecondaryFOMO dynamics and collector psychologysecondaryDesigner market dominance (Keith Elwin effect)secondary

Sentiment

mixed(0.45)— Kaneda is analytical and pragmatic rather than excited or pessimistic. He accepts pricing reality while questioning demand sustainability. Critical of recent theme quality but optimistic about future IP (Jaws, Matrix potential). Frustrated with unboxing delays and collector behavior but not hostile. Tone is conversational and sometimes humorous rather than emotionally charged.

Transcript

groq_whisper · $0.061

0:00
Cause I'm just kidding, anywhere else I'd be a tank Is it my destiny to live and die a life of blood for charity? I said, I said, I said, I said, I said, I said, I said, I said Ah, welcome to Canada's Pinball Podcast everybody It's a brand new week, we get to talk about pinball Let's do a podcast about pinball right now, shall we? Alright, so the topic on this episode is going to be how much is a Stern machine cost to a distributor?
0:34
Now look, I opened this up on Patreon. A lot of you made a lot of guesses. How much money does it cost a distributor to buy a Stern premium? We're going to talk about that on this episode. But before I give you the number, this is not new. All of us know that distributors are making some money on top of what Stern is charging them for a game. It's been going on this way since the dawn of the distribution model. Now, Stern likes this model. This model is not going away.
1:05
Anyone who's saying rumors that Stern might sell games directly, guess what? They already sell games directly. They already sell accessories directly. You can also get a cutting board from Stern Pinball because it's a lifestyle brand. There's no way Stern Pinball is gonna turn over its super successful business model and then want to deal with thousands of customers. That's why they use distributors, because they don't want to deal with the headaches of a very complex electromechanical device
1:37
that they sell thousands of around the world. They simply let the distributors handle all of the incoming calls of anyone who has an issue with their product. It's super smart. It's not going away. Even though Stern is ramping up a new factory in August, the majority of that factory that they're ramping up is gonna go into the most important part of their business, which is manufacturing. Now, we're gonna talk about manufacturing and what's gonna happen when Stern increases its capacity
company
Kanedaperson
Keith Elwinperson
Roger Sharpperson
Barry (Dutch Pinball owner/lead)person
Venomgame
Godfather CEgame
Galactic Tank Forcegame
Pulp Fictiongame
Jawsgame
Big Lebowskigame
Southern Fried Gaming Expoevent
Chicago Expoevent

high · Kaneda synthesizes PinSide reviews: 'it's a mixed bag', 'some people like it... some people love the speed', 'you don't hear people talking about the doppelganger' or 'the lab'

  • ?

    product_concern: Godfather CE (revealed ~5 months prior) and Galactic Tank Force have seen minimal unboxing content; extended wait creates information vacuum affecting secondary products

    high · Kaneda: 'Where are the Godfather CEs?... This game was revealed... five months since the game was revealed... I just want to see it unboxed'

  • ?

    rumor_hype: Rumor that American Pinball has secured He-Man license; larger audience appeal vs. Tank Force; expected to compete with Venom and Godfather for distributor orders

    medium · Kaneda: 'rumors out there that American Pinball has He-Man. They most likely have the He-Man license... much larger audience of He-Man fans out there than Galactic Tank Force fans'

  • ?

    rumor_hype: Strong rumor that Dutch Pinball is developing Matrix as next title with designer Roger Sharp; positioned as high-impact dream theme to counter current Stern/JJP releases

    medium · Kaneda: 'I hear the Matrix is the next game from Dutch Pinball. I'm really feeling good about it. Roger Sharp is working with Dutch Pinball'

  • ?

    machine_intel: Kaneda speculates Spooky's next three releases are Looney Tunes, The Princess Bride, and Texas Chainsaw Massacre based on Bugs' statement about three licensed games in development

    low · Kaneda: 'Bugs said they have three licensed games that they're working on. I think it's going to be Looney Tunes... Princess Bride... Texas Chainsaw Massacre'

  • ?

    business_signal: Rumor that Chicago Gaming Company is moving away from Williams/Bally remakes toward original titles; possible falling out with Rick over at Planetary fueling team-up with Pedretti Gaming

    low · Kaneda: 'Chicago Gaming Company might be done with remakes... I think there's been a falling out between CGC and Rick over at Planetary'

  • ?

    product_strategy: Keith Elwin releases function as market gravitational singularities that overshadow concurrent game launches; strategic consideration for release timing across industry

    medium · Kaneda: 'When Keith Elwin releases a game, it is like a black hole... it will create a gravitational pull that will suck everything towards his pin'

  • ?

    community_signal: PinSide community exhibits positive bias: honest negative reviews get downvoted while enthusiastic reviews receive immediate engagement; affects perception of game reception

    high · Kaneda observes PinSide Venom thread: 'If you jump on any new machine and say it's amazing, you'll get 20 upvotes immediately... if someone doesn't like the game... you'll get downvoted'

    • 2:07
    because increasing capacity is something you normally do to meet demand. Now, look, it's a really tricky move in the world of business because sometimes you can increase your capacity to fill demand that is no longer there. And I think everyone's starting to wonder, no one knows for sure, But we're all starting to wonder, is the demand to buy pinball machines in 2023 as strong as it was in 2021 when we were heading into COVID? And COVID created a little bit of a bubble of people's demand for items like this that went into your home because we were all home and we were all bored and we didn't lose our money and the recession didn't really hit.
    2:49
    But coming out of it now, as I was saying on my last show, inflation is real. Higher interest rates are real. Everywhere you go, it's not just pinball machines. Everywhere you go, you're getting hit with a higher dollar amount. I mean, I went to the grocery store with Brenda today. We just got like four items, four or five items, 50 bucks, 50 bucks for a couple of pieces of fish and some bread and some muffins for Killian, $50. It's crazy how much everything costs. But obviously food is more important than pinball, so we got it.
    3:21
    So here's what I want everybody to do. As you listen to this show, I want you all to keep in mind a few things. Nobody's making you buy any games. You shouldn't get really, really angry in pinball because the way I look at pinball nowadays, it's real simple. I'm actually at peace with the entire hobby. Do I think the prices are high? Yes. Do I like these high prices? No. Am I going to stop buying pinball machines? No. I will buy again. But at these prices, it's real simple. You're only going to buy a game if it checks all of the boxes that you want in a pinball machine.
    3:56
    And the most important box is usually the theme itself. Like we really need to see some great themes for this much money. And I think what we're all experiencing is not the death of FOMO. I just think we're experiencing two years of somewhat lackluster themes in pinball. And so we've had two years of lackluster themes, and we've had the prices go through the roof. And we've also had the capacity increase. Remember, Stern used to make only 500 LEs. And then they would be very selective when they would make more than 500 based on the demand for the game.
    4:31
    And it's really surprising to me. With a game like Venom, they're still going to make 1,000 Venoms at $13,000? Did they even make 1,000 Star Wars? Did they even make a thousand Stranger Things? No, they didn't even make close to a thousand Stranger Things. I think Stranger Things was another of like five or 600 and that was it, which is a much more popular theme than Venom. And so that's happening in the marketplace right now. The capacity of games has gone up and the price has gone up and the theme has been somewhat mediocre Okay so I not telling you anything new So let talk about if I a distributor and I want to order a premium from
    5:09
    Stern, guess how much money, guess how much money I need to spend to get that game into my inventory. I saw a lot of ranges, everything from like 6,500. You people are crazy that said 6,500, all the way up to almost $9,000. It's not that low and it's not that high. Here's what I'm hearing it costs a distributor who wants to buy a premium. It is right on the nail, maybe give or take $100, but $8,000 is a distributor's cost for a premium. Now, a premium right now from Stern on its website is $9,799.
    5:45
    So just looking at those two numbers, there is a ballpark of $1,800 to be made from a distributor if he can find buyers for that much, if he can find a buyer at $9,800. Here is the lowest map price a dealer can sell the game for though. Are you ready for it? The lowest map price that a dealer can sell a game for, a premium game, is $9,500. And you will see dealers actually list a premium machines for $9,499.
    6:19
    So there you have it. This doesn't make me mad. This isn't anything brand new. We knew dealers were making margins on all these games. If they're making roughly $1,500 on every premium, how much do you think they're making on every LE? If I was a guessing man, I would probably say somewhere between $2,000 and $2,500 on every LE sold. It's not a terrible business to be in, but as we've seen lately, it's a lot harder for these dealers to sell these games at $9,800. dollars. It's a lot harder to find $13,000 LE buyers if the theme is something like Venom.
    6:54
    So if Stern is asking $8,000, here's a question for everybody out there. How much do you think it costs Stern to actually make a pinball machine? You know, what's the cost to Stern pinball? I don't know this answer. Typically, a manufacturing company wants to be somewhere around 50%. You know, the cost to them will be somewhat like 50% less than what they sell the product for. So do you think a Stern Bomb on a game is around $4,000? I think it might be a little bit higher than that.
    7:24
    Let's just say hypothetically, a Stern Bomb on a premium is $5,000, okay? So you're telling me if you buy an LE of that game and the Bomb on an LE is not really that much higher than a premium, I think that's what's creating some more pause in people. You're spending $8,000 more on the product than the product itself costs to make. And there's no way to cut out the middleman, right? You can't really cut out the middleman. You gotta buy from the distro. You know, when Stern sells you the game directly, they're not selling it to you for $8,000.
    7:56
    Now, how many of you out there who can work on your games, how many of you out there who wouldn't call the distributor if you had an issue because you would try to fix it yourself, how many of you out there would rather just spend $8,000 on a premium? Just spend $10,000 on an LE. It's never gonna happen. I still think we do need distributors in pinball because as I was saying earlier, a lot of stuff can happen with these games and these companies are not equipped internally to handle thousands of customers all over the globe. But the price discussion is an interesting one.
    8:27
    And for each and every one of us, as I was saying on my last episode, it's up to you. You need to be able to see the value in a game. Like if Top Gun came out tomorrow, that would instantly catapult me into I have to own this game. if akira came out i would buy it if it was twenty thousand dollars for an ellie of akira i would buy it i wouldn't even think twice about it and that's where we're at so for people saying like fomo is dead it's not dead it's just dead on themes that you have no fomo for and guess what
    8:59
    that's a good thing you shouldn't be buying every game you shouldn't be buying these 400 pound devices just to dabble on them because you're curious about a new game. Those days are over. Those days are dead. You could do that four or five years ago. You can't do that anymore. And there's nothing wrong with that because there are hundreds of thousands of pinball machines out in the world. You can find something that works for you. You don't only have to buy new in box. All right. So speaking of new in box, let's talk a little bit about the industry.
    9:31
    New in box, where are the Godfather CEs? Does anybody have this game in America? I'm waiting for these things to be unboxed. I really am. I'm not saying it facetiously. I just want to see where all the Godfather CEs are. This game was revealed in March, April, May, June, July, August. We're now five months since the game was revealed. Almost half a year, Jersey Jack is making its most expensive buyer's weight for the game. I just want to see it unboxed. I saw like one unboxed but surely there must be truckloads of Godfather CEs on their way to people this week in August Because I just want to see what people think of the game who own it
    10:12
    Now, we all know, like, if you spend $15,000 on this game, you're going to say it's great. You're going to say it's awesome. It's got that just one more game feel. And then two weeks later, when you list it, you're going to list that pin side post. Like, I'm really sad to see this go, but I got a free up room. We know you're lying. and just sell the game. Don't give us your sob story. Don't say you're sad to see it go. Just put it up for sale and shut up and take someone's money. Okay, so where are the godfathers? We're waiting on those CEs.
    10:42
    Where are these Galactic Tank Force signature editions for $17,500? You would think that American Pinball would make those versions first. Like lock in as many of those $17,500 orders as you possibly can. and then you'd want those people to do your first unboxings and say, hey, look how beautiful it is. Look at the 3D translate. You know, people putting whiskey in their thermoses and getting drunk because you're gonna have to put whiskey in your thermos and chug it to just get over the fact that you just bought a $17,500 tank force.
    11:15
    But where are they? No thermoses. When are we gonna see the Galactic Tank Force thermoses? I hope we see them before September, but it's a slow burn. And now the rumors out there that American Pinball has He-Man. They most likely have the He-Man license. And now that people know this, even if you're not a huge fan of He-Man, I can tell you to 100% certainty, there is a much larger audience of He-Man fans out there than Galactic Tank Force fans. It's just not going to have the orders rolling in, especially now that distributors have
    11:49
    to really decide like how many Venoms do I order? How many Tank Forces? How many Godfathers? if you're a distributor and you carry all of these companies, the safest bet is going to be the Stern machine. Now, speaking of Venom, even though customers are not going to get this game for about two months, we saw a lot of people play the game at Southern Fried Gaming Expo this past weekend. And I was reading the pin side thread. It's really hard reading people's feedback. Here's what's interesting. If someone doesn't like the game and you just put up an honest review,
    12:20
    I played the game and I don't like it, you'll get downvoted or very few people will upvote you. If you jump on any new machine and say it's amazing, you'll get 20 upvotes immediately. And that's good. You know, look, I get it. We're in pinball. People want to have fun. They want to hear people say positive stuff about the game. But after reading everybody's reviews, I would say it's a mixed bag. I think some people like it. I think some people love the speed of the game. I don't think anyone really knows what's going on in the game from a code perspective. And that's just because it's at a show.
    12:51
    When you play a pinball machine at a show, you have no idea what's going. You're just flipping. You're getting a sense of the gameplay. You're getting a sense of the lights, of the artwork, of the music, of the call outs. But you can't really follow and immerse yourself in a pinball machine at a show. It's a mixed bag review. Some people are saying the Pro is really barren and embarrassing. Even though the Premium has a lot more mechs, I'm also not hearing from people that the mechs do a lot. The one mech I keep hearing people call out the most is also in the Pro. It's those ball lock that releases the ball super quickly.
    13:23
    So, you know, so it actually creates faster gameplay if the ball was just going up the ramp and around the wire forms. That's the one thing I hear everybody talking about, right? You don't hear people talking about the doppelganger. You don't hear people talking about the lab. You don't really hear people talking about the other stuff because none of the other mechs are really that impressive. It seems to be a game about speed, about speed, and about speed. But I think for a lot of you out there who maybe have a Foo Fighters or have an Avengers, do you really need this? I think that's the verdict on Venom.
    13:55
    I think what's happening right now, too, is people are taking their feelings on Venom and they're projecting it across the entire pinball landscape. People saying FOMO's dead, no one's going to buy at these prices. It's not true. It's just Venom. When Jaws comes out and Jaws Super Ali comes out, watch people fight over each other to get a $25,000 version of Jaws. It's going to happen. And I'm just going to sit back smoking a cigar and say, I told you so. So what else is happening in the pinball world right now? Something else I was thinking about is Pulp Fiction hype going to be able to last this long?
    14:27
    Is it going to be old news by the time the game comes out? My worry about Pulp Fiction is this. It's real simple. It's the same worry I have with Elton John. It's the same worry I have with everybody else planning something at the end of the year. When Keith Elwin releases a game, it is like a black hole. It is a black hole of pinball enthusiasm. it will create a gravitational pull that will suck everything towards his pin. So if you're planning on releasing a game anytime near a Keith Elwin pin, good luck, good luck. It's not gonna work out for you.
    14:59
    If I was a marketer sitting in a pinball company's office and we were thinking about when to release a game, I don wanna release a game anywhere near a Keith Elwin machine It the same way like in the movie industry right It like when Tom Cruise puts out a movie he has so much power at the box office where if your movie comes out on top of his you probably not going to do too well unless you're Barbie. I saw Barbie. It was good. I saw Barbie. It was good. I did enjoy it. It is a 90 minute modern feminism speech, but you know what? So what? It didn't offend me.
    15:30
    Even though they treat men like they're these troglodytes, I think it's just, you know, It's just making up for all the times we've treated women horribly. Look, I'm just going to say it again. If they made a Barbie pinball machine, it would crush. Barbie pinball would sell more than Venom. It would sell more than Galactic Tank Force. It would sell more than The Godfather. It would sell more than Foo Fighters. Trust me on this. Every single family where there's a woman who has some control over that family and there's pinball machines in the home and you're telling me there's a Barbie pinball machine, we're getting it.
    16:00
    So getting back to Pulp Fiction, it's going to come out. They're going to ship this game, this single level game with like six songs and not a ton of mechs. It's a super cool pin. I understand why it's sold out because the theme is amazing, but it's going to come out right when Jaws comes out. The LE is going to be made right when they're making Jaws. I don't know, right? And that's the other thing too now. It's just harder to buy two machines on top of each other. Most of us, if we buy a pinball machine, right? We want to buy a dream theme.
    16:31
    We're going to spend the money. We want to spend it, but we don't want to spend it too often now because now you really, really have to dive into that piggy bank. So August is going to be a little bit of a down month and then things are really going to pick up in the fall. I think by the end of the year, we're going to see a new game from Jersey Jack. We're going to see Pedretti Gaming. I think they're going to announce they're remaking Big Bang Bar at Chicago Expo. We're not going to see a new game from Spooky just yet. It's probably going to be Looney Tunes. Bugs said they have three licensed games that they're working on.
    17:03
    I think it's going to be Looney Tunes. I think it's going to be The Princess Bride. And I think it's going to be Texas Chainsaw Massacre. Okay. You know, and that's really it. I also heard that Chicago Gaming Company might be done with remakes. So they are going to start doing more original titles. It doesn't mean they're not going to do licensed games, but they're not going to be remaking the old Bally Williams games. I think there's been a falling out between CGC and Rick over at Planetary. And that's why I think you're going to see Rick and Planetary team up with like Pedretti Gaming
    17:34
    and anyone else who has manufacturing. Now, let me end this show with another rumor I'm hearing. And this is a good one. This theme has been rumored forever. It's the Matrix. Now, look, I hear that Jersey Jack does not have the Matrix. The same way they probably don't have Harry Potter. I hear the Matrix is the next game from Dutch Pinball. I'm really feeling good about it. Roger Sharp is working with Dutch Pinball. a Dutch pinball, the Matrix. See, this is the thing. If Barry just announced he had it now,
    18:04
    I mean, think about that. I mean, he won't do it. But if Barry said, we have the Matrix and it's next. And he said, look, you could spend $13,000 on these empty Stern LEs. You could spend $15,000 on a Jersey Jack machine. But if I were you, I would wait until you see what we're doing with the Matrix. If he said that now and he said, look, it's going to take us a little over a year to get the game out. We really hope everybody loves their big Lebowskis, but we're going to take it up even another level with the Matrix.
    18:37
    That would make me pause. That would make me wait and see. Just knowing that it's out there, a dream theme is being made by a company that has really been the only company that's brought the Baldy Williams magic back in modern times. I mean, I mean, come on, people. Look at that game. Look at what's in that game. It's embarrassing if you put a Big Lebowski for $13,000 next to a Venom for $13,000. Oh, but Chris, it doesn't have role-playing game code, and you can't continue where you left off with your Stern Insider Connected,
    19:11
    and they're not selling you lifestyle apparel. Everybody, thank you for being a member of the Kaneda Club. I think today or tomorrow, you're going to get your little bill for Kaneda's Pinball Podcast. I mean it when I say it. I'm so happy for all of your support. I'm so happy to have you here. We're going to keep doing great podcasts every week. We're going to keep doing Saturday Morning Spectacular. If you caught the last one, it was fire. It was fire. We still can't get Cengiz back. He's still holding out. We're going to get him. I'm like John Cusack holding up the boom box.
    19:43
    We're going to get that guy back into the mix. Later, everybody. Check me out. Yeah, I'm just kidding. Baby, I am.