Classic Mode

Marketplace

Issue: 1974 May 15

Going back to survey made last year wherein operators reported they earned average of
10% profit before taxes, which is almost double the 5.3% to 5.9% America's 100 largest
corporations reported as their profit before taxes, what happens to the gross money that
operators took in prior to splitting on a 50/50 basis with locations? Odds favor loca-
tions by 4 1/2 to 1. In short, locations would be silly to buy their own machines today
when the operator gives, actually gives his locations, $4.50 for every $1 he earns. Here
is why: From every $100 his machine takes in, the location gets $50 and the operator gets
$50 on the 50/50 commission basis. The operator, after deducting all costs and expenses,
according to his own survey report, ends up with 10% profit before taxes or $5 from his
$50. The location can, at the utmost, deduct 10% as his overhead expense for keeping the
machine in his place of business. He deducts $5 from his $50 and winds up with $45 as
his profit before taxes .
Operators on 50/50 must admit they're giving the lion's share of their take away to
their locations. Furthermore, operators know prices, taxes and overhead expenses are
not going down - they're going up - much higher up. The answer is simply that operators
in this service industry must, like all others in every service industry in this nation
including the huge utilities, like electric, gas and telephones, get a "service charge"
of, at the very, very least, $10 off the top of every gross collection and split the
balance on the more equitable 70/30 commission basis - 70!> to the operator - if the op-
erator wants to continue in this business on a progressive and profitable basis this
roaring wild inflationary year of 1974 and for the years of galloping inflation yet ahead.
Isn't it high time, long, long overdue time, to drop a business practise that came into
being with the worst business depression in history during the early '30s? Isn't it high
time to get rid of the antique, outworn and rediculous 50/50 basis of over 40 years ago ?
Now that aluminum penny won't be minted the U.S.Mint, which reports it is producing
35 million copper pennies each day and that demand is for 40 million a day, sees the
country running short of the sales tax pennies and the Mint losing money buying copper
at $1.20 per pound •••• State and local taxes passed $125 million in '73, away up from
'72, but that ain't nothin' yet . State and local taxes already on the way sure to set a
new high record this year of '74 •••• Sincerest thanks to all who commended past issue
of "Marketplace" for publishing some of the letters this newsletter receives in such
outstanding numbers. (In all the years we've been publishing in this industry never has
any publication received as many letters.) ••• Need pictures of the 1935 pinballs of
J.H.Keeney & Co., Chicago, for forthcoming "Pictorial History" edition. If you have any
of these mail quick to: Marketplace, 185 .N. Wabash, Chicago 60601.(Won't be harmed.)
Some moons ago mentioned here the ladies, who have taken over operations on passing
of their husbands, are proving themselves top operators. Charlene Lesnick of Richmond,
Va., Mildred Bunch of Chattanooga,Tenn., June Ball of Marathon,Fla., only a very few of
the many about the nation. We'd like to hear from other of the ladies to get some idea
of the number now active in the industry. (In view of the fact some ladies a bit modest
about reporting in, how's about some of you distribs and operators mailing us their names
and addresses of their firms?) ••• Nev corn sugar substitute may halt any further price
hikes by soft drink bottlers. Hope is there'll be enough to meet demand and that the big
bottlers won't bid the price sky high •••• Very rough news hit the public (4/16/74) that
all price ceilings on food and wages over. Those economists who predicted inflation this
year in two figures, already roaring at 10% and may end up at 15%, may have called the
shot. (Think! Can you continue paying 50% commission to locations and survive?)
•
ID
2·Player CenterShooter
4
David Rosen, chairman of Sega Enterprises, Tokyo,Japan and Burton Slotky, :halrman of
Armac Enterprises, Chicago, Ill., jointly announced (4/5/74) preliminary agre!ment in
principle had been reached for a combination of the tvo firms. Transaction is subject to
approval of boards of directors of both firms as well as Armac's shareholders , There are
about 1,225,000 Armac common shares outstanding. Under terms of agreement Arm~c sharehol-
ders to receive number of Sega shares. Sega is majority owned by Gulf & Western Industries.
Armac is reported to be world's largest producer of billiard tables also much leisuretime
equip't. Sega manufactures and distributes coin machines primarily in Japan. rhis opens
big int'l market for Armac products. Both Rosen and Slotky reported pleased to be join-
ing together •••• Second meet of Ohio Music & Amusement Assn in Columbus (4/5/74) resul-
ted in election of following officers: Don Van Brackel, Pres.; Mel Pearlman, Vice-Pres.,
Legislation; Mel Shone, Vice-Pres., Public Relations; John Elum, Sect•y; Dick George,
Treas.; Directors: Ray Lonsway, Ed Elum, Mayna.rd Hopkins, David George, Eliot De~,
Tony Schiavone, Clarence Neargarder, Jim Schlarb and Bill Levine. Tremendous enthusiasm
generated and membership already expanding at rapid rate. Meeting of officers and direc-
tors will be held in 30 days and belief is this will further stimulate membership.
Remember Charley Katz? Peel sure many will recall the lovable, rotund li t tle Charley
vho traveled all over the country representing various manufacturers. Harry Peair_l of
Miami ,Fla., phoned to advise and very sadly so that Charley nov destitute ancl, ,,,hat is
worse, is going blind. Harry feels many vho will recall Charley Katz may van·~ t 1) send a
fev bucks to help this lovable, little salesman. His address is: 690 Fort VaJhington Ave.,
Nev York, N.Y. 10040. • •• Larry (Gangbuster) Berke, Midway's salesmanager, u.ft1:tr being
told that double 2-Bits chutes on Midway's new gun, "Gangbusters", helping operators to
enjoy greater profits asked in surprise, "For what other reason did this guy thlnk we'd
feature double 25¢ chutes than to assure operators double profits?"
Once upon a time ago when mfrs ran short of ideas for nev games or didn't too much
care for what their engineers presented always turned back to one big favori1e -· the
card game. From reports we've read and heard, playing cards continue big sellers and
card playing still extremely popular with young and old. Could this be the time for a
return to card game? How's about "21" also known as "Black Jack"1 Can be speedy 2-player
or 4-player. First ball shot shows complete hand, of course with all shootin€ for the
"21" hand. Player, instead, gets 18 hand. Decides to stand pat. That's it, only one ball
shot. Either total or cards show on backboard. Next player shoots one ball, ~isses the
" 21", but gets "20". He's the winner. Also only one ball shot. If he va.nts to t r y for
big kill, for "21", shoots second ball. Goes over. Instead of winner, he becomes loser
on 2-player. So far only 3 balls shot by 2 players. Repeat the action for 4-flay·er game.
May all only shoot one ball each. Four players at 2-Bits each adds up to One Buck game.
Speedy play. Popular game. Let engineers work out the details. (So what do you think
of our idea for a speedy card game?)
Magnavox Co. filed suit in Chicago federal district court charging patent inf ringe-
ment of its home TV game, "Odyssey", against Atari,Inc., Bally Mfg.Corp., Empire Dist.,
Inc., Chicago Dynamic Industries and Allied Leisure,Inc. Bally Mfg.Corp. has alr eady
filed suit against Magnavox charging that the supposedly infringed patents are i nvalid.
Magnavox claims to have sold about 90,000 of its "Odyssey" home TV games in 197:3 ••• ·•
All-Tech Industries,Inc., Miami Lakes,Fla., reported sales of over $6.4 million and net
profit of $96,951 for first qua.r t.er ended Jan.31,'74. Justin J. Goldsmith, chairman of
the board reported, "We continued to achieve sales growth and improved earnings. The
achievements were made despite the continuing effect of steadily increasing costs and
e~enses in all areas of operations." ••• Bally's Tom Hata and Midway's Andy Ducay will
field engineer a service school at McKee Dist. Co., Portland,Ore., May 10 and 11, '74.
Advertising Closing Days
All issues of "Marketplace" close on 1oth day of same month. For example , next
May 30, 1974 iasue closes on May 10, 1974. All issues of "Interim News R(po1•t 11
close on 25th of preceding month. Next June 15, 1974 issue closes on May 251.h.
Rush your ad today to: MARKETPLACE, 185 N. WABASH AVE., CHICAGO, ILL. 60(101 ,

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