Marketplace

MARKETPLACE
NEWSLETTER
PAGE 4, NOVEMBER, 1975
How
INFLATION
Changed Coinbiz
What cost you $10 in 1974, regardless of the fact
in September, now costs you $15.70 to buy in 1975. In
more for everything you buy, even at this lowest rate
of inflation goes up, before the end of this year, it
over 1974 for whatever you buy.
the rate of inflation fell to 7.6%
short, you're paying well over 50%
of inflation in 1975. When the rate
will cost you a lot more than 50%
What does this mean to you? Simply that you've got to earn over 50% more than you did
in 1974 to break even. If a machine on a certain location brought you $100 in 1974, it
must bring you over $150 this year of 1975 so that you can enjoy as much purchasing power
as you had in 1974. That's what continued galloping inflation has done to your business.
That's also why intelligent operators, who couldn't arrange for a more equitable share
of the gross intake with certain locations have, rather than endure loss, let ' go of those
locations. Operators all over the country report they're surprised at the numbers of calls
they get to place equip't in locations that are bereft of machines. The fact, then, that
operators are pulling out of locations where a decent commission basis can't be arranged,
is much due to economic problems created by inflation.
This is also the reason for the boom in game rooms and mini-arcades that came into
being this year. Operators find they are better off investing in a game room, where they
have a better chance to build profit, rather than continue to fight against heavy odds
just to break even. Continuing galloping inflation has changed the course as well as the
mathods and procedures of the operating business.
"i .
Galloping inflation has also brought into being a new manufacturing era. As prices
soared for all types of games, solid state manufacturers became interested in the coin
machine business. Their entrance zoomed prices even higher. These higher prices have
now attracted the computer makers and new computerized games are making their appearance.
Already a game is being quoted at $10,000. Ot hers will appear in the $2,000 to $3,000
range. From now on and until the new era stabilizes itself many surprises are ahead.
Inflation has brought a new era into being for the industry. To continue ahead with
more assured profitability, operators are featuring 2-Bits play for which "Marketplace"
campaigned for some years. Plus minimum guarantees as high as $35 per week on new phonos.
Plus a ''service charge" off the top of each week's collection. Plus the 1/ 3 - 1/ 3 - 1/ 3 -
operator-location-partnership commission basis . Plus leasing to locations. In fact, plus
ingenious methods of various kinds to s urvive under today's inflationary conditions.
When will it all come to a head? Only when a new and different product, popularly
priced like pinball in the early '30s, comes to market and brings into being a flood
of n ew blood to, once again, boom the industry to the heights it deserves.