Episode 123: Jerry Power of Player One with special co-host Ryan C.

Pinball Profile·podcast_episode·14m 40s·held·Apr 22, 2018

Analysis

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TL;DR

Player One discusses pinball distribution, operator economics, and location strategies in Toronto market.

Summary

Jeff Lee hosts Pinball Profile with guest Ryan C. (from Head-to-Head2Head Pinball) interviewing Jerry Power of Player One, a major pinball distributor and arcade operator in Toronto. The discussion covers Player One expansion after Cineplex acquisition, the challenges of operating pinball machines profitably alongside redemption games, operator perspectives on location placement and maintenance, and advice for aspiring pinball operators.

Key Claims

Player One was taken over by Cineplex about two years ago and has expanded to a new facility at 6420 Viscount Road in Mississauga
high confidence · Jerry Power, Player One owner, stated directly in interview
Redemption games generate better economic returns than pinball machines in mixed-game locations due to economies of scale
high confidence · Jerry Power explained the business reality that pinball may only represent bottom 10-50 of earning games in a 50-game location
Pinball 2000 era machines had more advanced operator analytics (earnings graphs, time-of-day breakdowns) than current modern pinball systems
medium confidence · Jerry Power stated: 'Pinball 2000 was, I think, still more advanced than what we have now... would tell you what time of the day is the machine making the most money'
Ryan C. started routing pinball machines about six months ago at an already-established pinball location
high confidence · Ryan C. stated in interview response about operator experience
Specialized pinball-focused venues (barcades) are more profitable for operators than mixed-game locations with redemption games
high confidence · Jerry Power discussed how venues like Silver Ball Saloon, Cabin Fever, and Tilt outperform rec rooms with mixed game types
Jerry Power entered the pinball business in 1975 at $3/hour with his own truck
high confidence · Jerry Power stated directly in response to initial question about entering pinball
New pinball machines maintain or increase in resale value, making them good financial investments
high confidence · Both Jerry Power and Ryan C. confirmed that machines 'will keep its value and probably go up' when properly maintained

Notable Quotes

“It was by mistake. I went down for an interview on my way to another place and stopped in. And the guy said, fill out an interview sheet. Can you tell us what a schematic looks like? And you can start tomorrow. $3 an hour and you get your own truck.”
Jerry Power @ Early in episode — Origin story of how Jerry Power entered the pinball business in 1975, establishing his long industry tenure
“The problem we run into is economies of scale just don't facilitate having more pinballs in a location. If we have 50 games in a location, pinballs may draw on the bottom 10 or bottom 50.”
Jerry Power @ Mid-episode business discussion — Core explanation of why operators struggle with pinball profitability vs. redemption games
“So I think Pinball 2000 was, I think, still more advanced than what we have now, where it would tell you what time of the day is the machine making the most money, when errors popped up, and it would give you a graph of your earnings.”
Jerry Power @ Technology discussion section — Highlights gap in modern operator analytics compared to older systems, potential improvement area for manufacturers
“I guess most of it comes from the bar staff not being pinball people... the communication where I can put my number on there and say, please call if there's any issue. But people always assume that someone else is going to call for them and no one seems to message.”
Ryan C. @ Operator challenges discussion — Identifies key operational challenge for small operators: communication failures with venue staff
“If you're trying to make money off people that are sitting there drinking alcohol, right, you need to keep them there, right? And what keeps people there? A good conversation, right? But if you have something that they can play... that's going to keep people there longer.”
Ryan C. @ Sales pitch section — Articulates the core value proposition for placing pinball in bars: customer retention
“It's a steel ball, rubber, plastic, and glass rolling on wood. Something will happen, but if you clean it and look after it properly, you're going to make money.”
Jerry Power — Distills pinball maintenance philosophy for new operators entering the business

Entities

Jeff LeepersonRyan C.personJerry PowerpersonPlayer OnecompanyCineplexcompanyHead to Head Pinball Podcastorganization Pinball ProfileorganizationSilver Ball Saloonvenue

Signals

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operational_signal: Pinball machines struggle to generate adequate ROI in mixed-game venues (bars, rec rooms) due to economies of scale; redemption games dominate profitability in locations with 50+ machines. Maintenance time constraints (2 hours per machine) make it difficult to justify operational allocation.
high · Jerry Power: 'The problem we run into is economies of scale just don't facilitate having more pinballs in a location... if people don't play it, it's not earning and we don't make money on it.'
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operational_signal: Communication failures between operators and venue staff (bartenders, managers) lead to unreported maintenance issues. Venue staff often fail to report broken flippers, rubber wear, and other damage.
high · Ryan C.: 'bar staff not being pinball people... they say no, no, everything's fine. And then I rock up there and a flip is broken... people always assume that someone else is going to call for them'
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venue_signal: Specialized pinball-focused venues (barcades) are growing in Greater Toronto Area and beyond. Venues like Silver Ball Saloon, Cabin Fever, Tilt, and New Place Pin-Up Arcade outperform mixed-game locations. Operators who are hands-on and present regularly achieve better maintenance and profitability.
high · Jerry Power discussed venue operators like Robin (Cabin Fever), Dan/Evan (Tilt), and Che Kernu who 'can get into the locations, clean all the games herself' and are 'there 24-7'
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business_signal: Player One was acquired by Cineplex Entertainment approximately 2 years ago and has since expanded to larger facility in Mississauga. Expansion reflects corporate strategy to integrate pinball with rec room and redemption game operations across multiple venues.
high · Jerry Power: 'We were taken over by Cineplex about two years ago, and we've expanded and moved into a new facility up at 6420 Viscount Road in Mississauga.'

Transcript

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0:00

It's time for another Pinball Profile. I'm your host, Jeff Teolas, here with a special guest, Ryan C. Hey, Ryan. G'day, mate. How are you going? He's here in Toronto, so I'm going to teach him how to do an interview process. I know you've got some questions. So let's get somebody who knows a little bit about pinball and pinball sales. We've got Jerry Power from Player One here. How are you? Fantastic. How are you? Okay, so Ryan does a podcast called Head-to-Head Pinball. It's really, really funny. Not a lot of good quality content. So much from Ryan. Martin's fantastic. I wish Martin was here, but he'll be here in July. I'll introduce you to them. But let's talk about your history in pinball. I'm going to let Ryan ask the first question. I already know what it's going to be. Jerry, how did you get into pinball? It was by mistake. It was a mistake. I went down for an interview on my way to another place and stopped in. And the guy said, fill out an interview sheet. Can you tell us what a schematic looks like? And you can start tomorrow. $3 an hour and you get your own truck. $3 an hour. Sounds good, right? It sounds fantastic. Ryan, second question. I'll even give it to you. I have no idea what you're going to ask.

1:08

I don't know. All right. See, when you go to events, and you were at Texas, you could throw out your phone and ask some questions. But you're saying you're tired. I'm very tired. I've had the same amount of sleep you have. You're Jeff Teal, as I said. You're the big red. It means nothing. It does. Come on. Top 100 ranked IFBA player? Whatever that is. You've been smack talking this entire time we've been here. Listen, I might have won a few dollars here at Player One, but all right, I'll take it over from here, Ryan. I think it was only a dollar that you're up, just for anybody who's listening, okay? I don't know the currencies. An Australian dollar worth more than a Canadian? It's about the same. It's about the same? Yeah. You should have went U.S. You just came back from New York, darn it. You buy two sheep. So for those who know Player One, you probably knew Palladium beforehand, but there's been some changes in the last year. Do you want to talk about the changes? Most of the changes are really just corporate. We were taken over by Cineplex about two years ago, and we've expanded and moved into a new facility up at 6420 Viscount Road in Mississauga. That's a plug. It's right by the airport, too. I picked up Ryan and came right here. It's just a walk away. That's exactly what it is. And since then, we've expanded, and we're trying to get back into the pinball world a little bit easier than, I guess, what people would have wanted. So hopefully, you know, small steps. We hope to do a lot more over the next year or so. Much bigger facility here at Player One, and a lot of people come here, obviously, to buy their new games. And you certainly have a great catalog. We have a nice little view of the showroom in the back. and also, too, the Redemption games and some of the other things, too, that you see at rec rooms, which are popping up all over Canada, and some of the existing playrooms. All the Cineplex theaters the same way. So that's kind of one of our ventures that goes into it. It's another part of our business, one of many ventures that we get into. Now, pinball players are obviously looking for places to play pinball, but from a business standpoint. We're open Monday to Friday, 9 to 5. And all games are on free play. That's right. And I do kick you out at 5. What time is it? It's almost 6 o'clock. But anyway, Jerry, here's the thing. The reality of the business side of pinball is when you have choices of redemption games and pinball and foosball and bubble hockey and video games, it's tougher for pinball machines to make returns compared to the redemption game. Is that a fair statement? Very accurate. The problem we run into is economies of scale just don't facilitate having more pinballs in a location. If we have 50 games in a location, pinballs may draw on the bottom 10 or bottom 50. We understand both sides of it. If a game is not well maintained, people won't want to play it. But by the same token, if people don't play it, it's not earning and we don't make money on it. So it tough to get in there every week and clean a pinball every two weeks the way it should We working on how we figure that out But until we do it tough to keep putting pinballs out and operating them and trying to make an economic return that makes sense to put more pinballs into a place So go easy on us guys on your bashing of our sites a bit. Oh, yeah. Don't worry. You know what? Just a lot of times you do get scared. Pay no attention to pin side. That's rule number one. Yeah. But a lot of them, we understand that, yes, the pinballs are dirty and stuff that's there. It's tough to go in and spend two hours on a pinball. and that's all the time you have to do a whole arcade. That's the key. You've got one of those claw games. What's your maintenance on that? Filling up with stuffed animals, right? It's pretty much it. That's it. Okay. Now, Ryan is a bit of an operator in Australia too. So tell us about your pinball machines on location and the difficulties you have as an operator. I guess most... In English, please. If that was, sorry. I think most of it comes from the bar staff not being pinball people, I guess. So if I ring them up and say, hey, I'm going to come and do a collection, what do I need to bring? Is anything broken? And they say, no, no, everything's fine. And then I rock up there and a flip is broken or something like that. So I guess it's the communication where I can put my number on there and say, please call if there's any issue. But people always assume that someone else is going to call for them and no one seems to message. The machines are pretty reliable anyway, but they do need constant cleaning. Rubbers break all the time. And if it's a sling, then the machine isn't going to earn money and going to operate properly if something as simple as a 50-cent rubber is broken. I haven't been to Australia, but I assume anything goes. So do they smoke in the pubs there? 100% not. Oh, okay. Okay, good. Wow. It's illegal. It's the one law they do. Okay, that's good. Now, maybe there's an app for a manufacturer to do is when there is an error, to have something that goes back onto your phone so you can at least see if you've got a switch or error, something that's broken. They're never going to be able to, I guess, tell... On mic, maybe? That's another little tip there, kid. Whenever you're talking, make sure the microphone's on. Go ahead.

5:35

They're never going to be able to monitor if a rubber is broken, but 100% with the newer Spike system, it's basically running a Linux kernel, and with JJP's machines as well, there's no reason why they can't not only let you know if there's an error, but also give you operator profits and let you know. So I think Pinball 2000 was, I think, still more advanced than what we have now, where it would tell you what time of the day is the machine making the most money, when errors popped up, and it would give you a graph of your earnings. And I'm not a big-time operator, but that kind of stuff would make me more excited. And, you know, it'd be easier to know what's working and what isn't, right? If you had more statistics. I mean, would you be able to get some proper data, or would you go to somebody like Martin who's a little more clever? Well, I mean, it would be good data for people that run the bar as well. I mean, I guess they know when they're earning money from alcohol sales. But if people stop playing their pinball machines at a certain time, then they know that they might change their operating hours based on that. Because maybe their pinball machine, when the dollars go in, that aligns with alcohol being purchased. I'm excited to see the growth of the barcades that are popping up. Ryan and I have a mutual friend in Bruce Nightingale, who operates the Silver Ball Saloon. Hello, Bruce. In Rochester, New York, 22 amazing pins, new and old. And that's been a big part of his bar. You know people here in the greater Toronto area like Dan Beeson and Che Kernu. He's got New Place Pin-Up Arcade in Waterloo. We've got Dan with Tilt and some of the games he has at Cabin Fever. So those are primarily unlike a lot of the rec rooms and other redemption type places primarily pinball Do you think it easier for an operator to go one way or another Like is it hard to do both I mean, when I look at the rec rooms and some of these other places, you might see one or two pins there. But the majority of those people are flocking to the redemption games. Whereas something that is unique, like a specific pinball arcade, is going to be a lot better. I mean, obviously, you're not comparing it to redemption games. but that's where the people are going to go if they want to play pinball versus a rec room. For value-added service, you're probably going to go more towards redemption and merchandising than you will pinball. If you're a good pinball player, we've seen you guys dominate for, well, I've seen you sit for a half hour on a game. Ryan was there for two or three minutes as well. Oh, he's waiting for me. But the problem we run into is we would starve to death if you came into our arcade. But on the flip side of it, somebody who's not familiar with pinball that drops $3 in for two games may be finished in under a minute. So back in the heyday, these machines would go to the arcades. Obviously, that has switched, and now we're seeing the collectors, especially when companies like Stern have the Pro, the Premium, the LE, and the collectors, that's obviously the bulk of your business. It's a fair share of it. I think still more people are buying Pros, just the fact that that's the entry level that's there. But if you go on the street, you go somewhere like Cabin Fever, they have all Premiums and LEs down there. She's got nine games, and Robin does a fantastic job. She has a nice little niche because she can get into the locations, clean all the games herself, and she's got hands-on. Dan does the same at Till. Yeah, those are on the corner. Yeah, just down the street. Dan's not, he does the same thing with Dan and Evan. Che has Pablos and pin-up. He'll do the same thing there. Because he's there 24-7, he can look after the games. Our techs are going in once every two or three days to do the major maintenance. Okay, everybody listening to Pinball Profile is a big pinball fan. I'm going to ask the same question to both of you. All right. Ryan, again, I hope you're taking notes, but here's a good question. If you had a bunch of machines and you're listening to Pinball Profile and you were trying to think, okay, you know what, there are no locations. What is some good advice to maybe go into a bar, into a restaurant, some sort of pub, and say, I've got one or two machines, I wouldn't mind putting it in there. That obviously happened to you about four years ago when you first got in there. What's some good advice for people, as long as they're not in the Melbourne area because they're cutting into your turf. What's some good advice you could give? Well, no. Okay, I've only started Siding Machines about six months ago. Oh, really? Yeah, and it was at a pinball place already, so it was well established. But it is something that I might try and work on. So I guess the sales pitch is if you're trying to make money off people that are sitting there drinking alcohol, right, you need to keep them there, right? And what keeps people there? A good conversation, right? But if you have something that they can play and it's one player playing one person drinking, that's going to keep people there longer. So, when machines are expensive, you can blab on about how expensive they are and how there's no upfront cost to them. And basically, they just pay for electricity and they receive a profit share from it. So, the sales pitch is there. But the biggest downside, I guess, for them is the space, the real estate that it takes up in the bar. So, you have to kind of convince them that it's not going to take away from their sales. Same question to you, Jerry. If someone's thinking about putting pins that they own or they're going to come here to Player One and purchase some and maybe put them into place, some suggestions you would have? I would say take a few minutes. Learn from somebody who's experienced. We'll sit you through it. I just started much the same as Ryan. I got into it in 75. I might have a year or two on them. 75, that's a coincidence. That's a coincidence. That's his IQ. Go on. Oh, nice. Almost my age. Not too bad. So basically, that would be the thing to do. I mean, they are profitable machines. If you look after them you maintain them properly People need to understand it started off with guys like Jerry and Jeff going out buying a pinball putting it in a bar When it broke down you put it in your truck bought it back to the shop brought it back out when it was fixed Great that everybody got them in their house, but it's a steel ball, rubber, plastic, and glass rolling on wood. Something will happen, but if you clean it and look after it properly, you're going to make money. And also too, coin drop aside, let's look at the economy of pinball machines lately. You buy a machine, new in box, you buy a machine that, for the most part, is only going to maintain its price or go up. This is something that is good advice. If you're looking to get your first pinball machine, the best thing I can say is it will keep its value and probably go up. Agree, Ryan? 100%. I guess if you're buying machines for on-site, the Pro is probably the better one that makes more financial sense. But if you buy in the second-hand market, I've got my Hobbit LE on-site, and yeah, it's earning good money. Okay. Most locations, I mean, we talked about cabin fever with the VLEs, but yeah, do you agree that it's probably better to put a pro into a pub or a bar or an arcade? I think pros, the CEs certainly that are out now by Planetary Pinball, they're the direction no different than certainly the dialed-ins. If you're doing the standard model that's there, less moving parts, still a fun game to play. That's really the entry level that's on. Just make sure you go out every week or two and just maintain it. Just keep it clean and keep it level. It'll do you good money. And at the end of it, don't forget, you can still bring it home. That's true, yeah. So I think you're taking it to the dump. And, you know, it was not the case in the old days. Sadly, it was. A lot of them did wind up in the dumpsters. We know companies that sold and just kind of threw it all in the dumpster and dragged it off because it wasn't worth having a guy come in and beat him up for a couple hundred dollars to take it. Speaking of dump, Ryan, it's been great talking to you, and I appreciate you coming in.