MARKETPLACE
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NEWSLETTER
PAGE 6, MARCH, 1976
Empty
Locations
For many years operators maintained what were labeled, "vs.rehouse locations". Reason
for this label was quite obvious. These were very small stores, like a four or five stool
lunch counter, owned by a widow, who somehow eked out a living serving coffee, her own
home made pies and food. Operators would install an old and much used jukebox on which
they would set a very low minimum guarantee and collect once every two or three weeks.
Like one very well known big city operator back in the '50s advised, "It's better
than having these old machines clutter up my place. Better than having them just stand
there and gather dirt and dust. Better than trade them in for a few bucks. Ye've got
plenty of records laying around. We don't go out of our way. Once every few weeks we
service and collect. Ye get a minimum of $10 a week. That's like having a warehouse
that pays us."
..
To this he added, "A few times we got lucky. The warehouse location became popular
and expanded. We not only installed a new phono but added a few games. Two of our best
locations today", he concluded, "were once warehouse locations." .For example, a new,
large factory was built across the street from one of these warehouse locations. What
had started out as a four stool homey naborhood eatery became a big, bustling busy
restaurant to handle the many factory workers.
There still are a very few "warehouse locations" to be found in big cities and small
towns. But today's high prices, heavy overhead and servicing expense, and even tho these
spots are collected only once every two or three weeks, it's very difficult due to con-
tinuing inflation, to come up with a profit. What's more, the demand for used equip't is
such that, today, the operator is better off selling his used machines than trying to
eke out a profit from these marginal locations.
..
The fact is operators quickly pull their machines out of the marginal locations these
days rather than fight a losing battle. This has opened a void - locations without coin
operated equipment. More operators get calls to install machines than has been the case
in many years. Investigation of the majority of these calls results in the fact some
very efficient big operator or conglomerate pulled the machines. Bought a route and,
after a month or so, wiped out the marginal spots. Those who buy routes today, especially
with vending machines, claim that anywhere from 10% to over 20% of the route will have to
be discarded. They're actually buying the route to obtain certain top spots •
Furthermore, with more and more operators setting up game rooms and mini-arcades,
pulling equip't to help outfit these spots, more locations become empty of machines.
There are estimated to be over 30,000 game rooms and mini-arcades in operation in the
50 states. The figure is expected to reach 50,000 before 1978. This is switching the
industry from dependence on taverns and other locations for greater play action. At the
same time a new era is dawning. An era where the locations will be forced to go along
with the operators' demands for sharing gross income on an equitable basis . With condi-
tions what they are, this year may find more empty locations than at any other time in
the history of this industry.