three- which would you think is most profitable?
NIEMAN: I personally woule have to think that
operating is the most lucrative. I think you have a
different kind of potential there. As a manufactur-
er, you're locked in on just how much money you'll
be able to make on a margin. And then you have to
fight like hell to maintain your overhead, your labor
costs, your materials: prices on these just continue
to skyrocket, and you have to fight tooth and nail on
every increase. People claim that Bally has always
been way out ahead of all the other pin
manufacturers pricewise, but all we're doing is
trying to make a very basic profit margin on our
products. As for the distributor, he too is locked in
on what he can make: the competition is very keen,
and he can only go so far. The operator is sort of
open-ended. Once he does buy a piece, then the
potential earning power of the machine is limited
only by the traffic it is exposed to.
PLAY METER: You mentioned price a few minutes
ago. Do you mean to say that Bally is the highest
priced pin on the market now?
NIEMAN: My understanding- and it is tough
trying to keep abreast of what everybody else is
charging- is that we have the highest priced
conventional pin on the market.
PLAY METER: Currently, with Night Rider and
with Freedom, you came out with two different
models, an electromechanical and a solid-state, the
latter a bit more expensive than the former. Will
this continue? That is, will you continue to produce
two models of each game at the varying prices?
NIEMAN: I'd say that 1977 is the overlap year, but
that the trend is very definitely toward electronics.
The electronic version of Freedom has gotten a lot
of compliments and the electronic version of Night
Rider has done tremendously well. The dollar
figures are very gratifying. But you've got to move
in stages. We couldn't be making primarily
electromechanical games and then on a specific date
say we're making nothing but electronic games
from now on. It's a very slow crossover, very
difficult, very expensive, but I think it's worth-
while. The trend is toward electronics. I would say
that the number of electromechanical games will be
slowly reduced, but that there will probably always
be a small part of the market that can use an
electromechanical machine.
PLAY METER: On Freedom: could you give us an
idea of run figures, electromechanical vs. electron-
ic?
NIEMAN: On Freedom, we made just a smattering
of electronic games. Night Rider is the one where
we've done big percentages of each. Of the total
run on Freedom, I would say three to five percent
was electronic. But on Night Rider, I would say
about 60 percent are electronic. And that's a
record-breaking run, Night Rider. I can tell you
this, Night Rider is bigger now than Wizard was.
PLAY METER: And the electronic games are
selling as well as the electromechanical games?
There's not a resistance to them, in other words .
NIEMAN: The electronic games are ahead.
PLAY METER: Even though they're more
expensive?
NIEMAN: Yes.
PLAY METER: Why are they more? Many people
thought they would be less.
NIEMAN: I think they might some day be less. I
would liken them to the calculators. When they
first came out, to buy a simple four function desk
top calculator, you would spend $150 to $200; now
you can jog on down to your local food chain store
and pick one up for $9.95. But it took maybe two or
three years for the technology to catch up with the
pricing of the object. We're introducing a brand
new product, one we had a staff of in-house
engineers working on for over two years. And then
you've got the tooling up for the electronic aspect of
it, for example. We sunk a substantial amount of
money into start-up costs. And in the beginning
this is a fair price for Bally to charge. I'm not
saying that down the line, due to technology and
competition, the prices won't come down.
Also when you look at the price increase, you've
got to look at the potential of this machine. It's far
and away proven it can outearn the electromechani-
cal.
Same machine, same location, and the
electronic machine earns more money than the
electromechanical machine.
.
PlAY MEI'ER: So we agree that electronics is the
direction the pin industcy is going. The question is,
"How far?" Atari has come out with The Atarians,
which is bigger and heavier than the standard pin
game, and Atari has indicated that it might come
out with pins with different configurations. How do
you react to that?
NIEMAN: I think you have to classify what Atari
has done so far as novelty items, good, singular,
one-shot deals. When you get away from the
conventional size and shape and you make an
oversize or a round or a God-knows-what, it's
unique, a novel game.
And that's what this
business is essentially, a novelty business. But I
don't think you can come up with three of these
back to back. You can sell the first because it's
novel and it makes money, but you may not be able
to sell the second. I don't think you can continue it
on an ongoing basis, oversize or round or
odd -shaped pinball machines. In essence, what you
have is no longer a pinball machine.
PLAY METER: So you think the conventional size
and shape is here to stay.
NIEMAN: I think it's here to stay as a staple. I'm
not saying that you can't make a bastard piece and
it won't be a success. But I don't think you can sell
the kind of numbers we sell on a conventional when
you go into different shaped games; I think you
limit yourself. I'm not badmouthing it. I just can't
see it on an ongoing basis. Plus, any time you make
a change, you have certain inherent start-up costs.
PLAY METER: So you think Bally games will stay
the same size?
NIEMAN: I think Bally pinball machines as staple
will stay the same size. I'm not shutting the door to
Bally fooling around with some novelty-type games.
PLAY METER: You're an avid player. What's
your favorite game?
NIEMAN: I think the player goes through stages,
and I'm fickle. But right now I'd say Capt.
Fantastic. Before that it was Wizard and in a
couple o{ months it'll be Evel.
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