Play Meter

Issue: 1978 July 15 - Vol 4 Num 13

Coinman of the Month
MICHAEL MENDELSOHN
Michael Mendelsohn, July's Coinman of the
Month, is 26 years old and is one of the New Breed
in the industry.
Spurred on by the huge success of Pong, he
decided to try his hand at operating coin-operated
amusement devices five years ago. He was in
college at the time, majoring in Business
Administration, but when he saw the opportunity
come open in the coin-op field, he was quick to
jump. He and his father, Seymour, started Games
Unlimited in Apri~ 1979 with only four video
games, and though his father is no longer part of
the firm, Games has grown to a sizable operation of
more than 400 pieces. It speaks weU for the
Mendelsohn business sense.
Headquartered in Los Angeles, Games Unlimited
spreads out far in three directions-to the south
about 125 miles away to Chula Vista, to the north
about 175 miles to San Luis Obispo, and to the east
about 160 miles. His operation is very strong in
video games and unusually strong also in waU
games (since, as he explains it, many of the patrons
in his locations like to play games from their tables).
Video games make up 55 percent of his entire
operation. Wall games and pingames make up
twenty percent apiece, and arcade pieces account
for the remaining five percent of his business.
HI think being a good businessman is more
important than being a good mechanic," claims
Mendelsohn. His suggestion to feUow operators is a
simple one-you're never too old to learn. And,
toward that end, he suggests that taking business
courses at city colleges in the area is a good idea for
today's operators.
His bustnessman's approach to Games Unlimited
8
is reflected in a well-devised plan for landing new
locations. He studies one type of location at a time
and specializes in selling himself to that particular
group of locations. As an example, recently while
he was focustng his energies into the restaurant
market, he embarked on an aU-out drive to canvas
as many restauranteurs as possible at a restaurant
convention. He developed a slick brochure,
sponsored a cocktail party, anillanded several new
contacts. And, of course, he places great emphasis
on referrals-word-of-mouth advertising.
Though he places supreme importance on being a
good businessman, Mendelsohn has by no means
forsaken the service end. In fact, it is his strong
service department which compelled PLAY ME-
TER to interview him for this year's Service Issue.
He employs six service mechanics (his arrange-
ments with them makes for rather interesting
reading), a shop technician, a vice president of
operations who ' supervises the mechanics, a
secretary, and a bookkeeper. Service and main-
tenance is a strong suit with Games. And the
company is keeping up with the changes in the
industry. As he reports in the interview, Games
now does over fifty percent of its own board repair
and plans to be up to seventy-five percent in the
near future.
His wife's name is Barbara. He's an active
participant in baseball, football, skiing, and
racquetbaU (his association with racquetbaU clubs
also helped land him some additional locations).
He's innovative in many of his approaches to the
business, and could supply a good clue to the New
Breed of operators who are finding thetr way into
the industry.
PLAY METER , July. 1978
PLA Y METER: Has olid state technology. in your
opinion. led to an increase or decrease in downtime?
MENDELSOHN: An increa e in downtime initially.
I do think. however, that in the long run it will
cau e u all a decrease in downtime.
PLA Y METER: Do you have any figures which lead
you to the conclusion that solid state technology has
increased downtime?
MENDELSOHN: We have developed a service
ratio for each type of game which is actually a ratio
of how many calls we get on a game to how much
money that type of game makes. Right now, out of
all our games-and that includes mechanical
pin balls, digital pin balls, video games, wall games,
and arcade pieces- digital pinballs have the worst
ratio of service to revenue.
PLAY METER: How did you come up with that
ratio?
MENDELSOHN: It's a two-step formula. First,
you take the amount of service calls for a month on
each type of machine and divide that by the number
of those kinds of games that you have on your
route. Then, in the second step, you divide that
figure by the average amount of revenue that type
of game generates for you each month. For
instance, if you have a hundred ' digital pinball
machines and you have 75 service calls per month,
your figure after the first step would be .75. Then
you take that. 75 and divide that by your average
hare of the take on digital pinball machines for the
month. Let's say that figure is $125, that means you
divide .75 by 12.5. Actually, we should be dividing
by 125, but we reduce that figure to only a tenth so
that we don't have too many decimal points. So, for
the purpose of our ratio, 125 becomes 12.5. The
result is a ratio of the amount of service to how
often that type of game is played. Now this ratio
obviously doesn't show how often the game is being
played; it's not intended to do that. It doesn't give
us a total financial picture of that machine but
rather a service picture of the machine. After all, a
game could have a poor service ratio and still be a
good earner since the more often the game is
played , the more often it will break down.

cOin
operated
~~ystems





Coi n Meters
Coin Chutes
Locks
Timers
Rotary
Switches
• Custom
Designs
PLAY METER: And using this formula, you have
found that digital pinballs have the highest ratio of
service to revenue?
MENDELSOHN: Yes, but you have to bear in mind
that you have increased earnings with digital
pinballs. You have to ' weigh -all this into
consideration. Digital pinballs may have the highest
ratio, but they are also the most played. Digital
pin balls have increased our revenue by twenty-five
to thirty percent. This ratio only gives the service
picture of the machine, not its financial picture.
PLAY METER: Could you give us an example of
what those ratios have been for you?
MENDELSOHN: For this past month, for instance,
digital pinballs had a ratio of .15; mechanical
pinballs, .10; video games, .06; and arcade pieces,
.02. You'll note that the higher the number, the
worse the ratio of service calls per machine. By the
PLAY METER , July, 1978
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