Play Meter

-STA TE OF OF THE THE INDUSTRY INDUSTRY------STATE I LOOKIN' GOOD! LOO KIN' GOO D! I by Valerie Valerie Cognevich Cognevich by This State State of ofthe the Industry Industry report report is is This dedicated to to the the hundreds hundreds of of operators operators dedicated from all all around around the the country country who who took took from their valuable valuable time time to to fill fill out out the the their survey forms forms we wesent sentto tothem. them. All All of of survey us talk talk to to our our fellow fellow industry industry members members us andhear hearthe the latest latest gossip gossip and and trends, trends , and a ll in in an an effort effort to to find find out out just just what what is is all going on onin in the the coin-op coin-op industry. industry. Each Each going year Play Play Meter Meter sends sends out out surveys surveys to to year each of ofour our operator operator subscribers subscribers askaskeach ing them themto to let let us us know know aa little little about about ing their businesses. businesses. From From these these honest, honest, their anonymous answers, answers, we we are are able able to to anonymous compile a report on the industry. As compile a report on the industry. As with any any survey, survey, ititisis only only as as good good as as with who take take the the time time to to contribute contribute those who those their data data and and each each year year we we are are their grateful to those we have come to grateful to those we have come to count on fo r responses. As you read count on for responses. As you read through the results , we hope you will through the results, we hope you will a better understanding of where have have a better understanding of where theindustry industry is is now now and and where where itit is is the heading in the future. Knowing what heading in the future. Knowing what thetypical typical operator operator is is doing doing can can only only the help everyone plan for the great help everyone plan for the great lies ahead. ahead. unknown that that lies unknown Of course, as with anyindustry industry Of course, as with any survey , some operators are going to to be be survey, some operators are going doing much better and may have much doing much better and may have much more equipment, equipment, higher higher earnings, earnings, difdifmore ferent mix of equipment , or other ferent mix of equipment, or other variations. However, However, we we have have taken taken a a variations. sample of the general operating comsample of the general operating community and and laid laid itit out out here here for for your your ininmunity spection. Since there is always a spection. Since there is always a margin for for error errorin in representative representative margin samplings , we would like to to caution caution samplings, we would like those who would use these survey those who would use these survey results for for any any legislative legislative purpose. purpose. results Happily , industry gross collections Happily, industry gross collections continued an upward spiral, topping continued an upward spiral, topping last year's $5.4 billion by 19 3 at at $6.4 $6.4 last year's $5.4 billion by 19% billion. Cigarette machine collections billion. Cigarette machine collections would add add another another $70 $70 million million to to that that would total . Though games on location were total. Though games on location were new game game purchases purchases up only only slightly, slightly, new up grew 11 3 to 330,000 from 298,000 grew 11% to 330,000 from 298,000 last year. The number of locations last year. The number of locations grew aa significant significant 20% 203 from from 375,000 375,000 grew to 450,000. In those locations to 450,000. In those locations,, PLAY METER METER 1989 1989 DIRECTORY DIRECTORY 88 PLAY operators reported reported having hav ing 1,750,000 I ,750,000 operators games compared compared to to 1,500,000 1,500,000last last games year. year. Equipment Equipment In aa surprising surprising look look at at what what operators operators In bought during the past year, video bought during the past year, video game purchases did not show game purchases did not show aa tremendous surge. surge . Instead, Instead , operators operators tremendous seemed cautious in doling out money seemed cautious in doling out money for video games. Last year their video for video games. Last year their video game purchases totaled 225 ,000, game purchases totaled 225,000, while this this year year those those new new game game purpurwhile chases nudged up to to 243 ,000. chases nudged up to to 243,000. Dedicated games games made made up up the the bulk bulk of of Dedicated new game purchases at 153 ,000 and new game purchases at 153,000 and kitpurchases purchases followed followed with with 90,000. 90,000. kit For the first time, we separated kits For the first time, we separated kits and dedicated games when aski ng fo r and dedicated games when asking for average weekly gross collections and average weekly gross collections and were startled startled to to find find that that dedicated dedicated were games topped kits by 25 3 in colleccollecgames topped kits by 25% in tions. Dedicated video games averagtions. Dedicated video games averaged $.91 weekly gross collections whi le ed $91 weekly gross collections while conversion kits averaged $68 per conversion kits averaged $68 per week. Even Even though though at at first first glance glance it it week. would seem obvious that dedicated would seem obvious that dedicated games would would earn earn aa better better pay pay back back games and return on investment , comments and return on investment, comments from operators operators were were dominated dominated by by from complaints of dedicated equipment becomplaints of dedicated equipment being way overpriced. ing way overpriced. Despite the the complaints, complaints, video video games games Despite towered over any other equipment, actowered over any other equipment, accounting for roughly 60 3 of machines counting for roughly 60% of machines on routes. routes. As As high high as asitit isis though, though , it's it 's on down from from the the 72% 72 3 reported reported the the down previous year. previous year. Though operators operators seemed seemed to to have have Though droppedback back on on buying buying new new video video dropped games , they they made made up up for foritit with with other other games, types of equipment. The newest additypes of equipment. The newest addition to routes was basketball games tion to routes was basketball games and operators operatorsbought boughtnearly nearly 7,000 7 ,000 of of and them . In In fact, fact, although although basketball basketball them. games are are the the new new trend trend and and were were not not games significant enough enough to to break break down down last last significant year, this year the equipment made up year, this year the equipment made up over I 3 of equipment on routes . over 1% of equipment on routes. About 56% 56 3 of ofthe the operators operators said said About they had added basketball games to they had added basketball games to their routes buying an average of four their routes buying an average of four games and reported average gross colgames and reported average gross collections of $1 49 pe r week. Revenues lections of $149 per week. Revenues generatedby by basketball basketball games games totaled totaled generated $70 million of the $6.4 billion industry $70 million of the $6.4 billion industry total. Just Just as as we we will will see see with with cranes, cranes, total. basketball game purchases should inbasketball game purchases should increase before dropping off. Also, crease before dropping off. Also, fo llowing the the pattern pattern we we have have seen seen following with cranes and merchandisers, the with cranes and merchandisers, the of companies offering basketnumber number of companies offering basketball games games will will probably probablyincrease. increase. The ball The recent AMOA show in Chicago in earearrecent AMOA show in Chicago in ly November November featured featured more more than than 15 15 ly companies producing basketball companies producing basketball games, nearly nearly triple triple the the number numberjust j ust aa games, year ago. year ago. Operators still still found found refuge refuge in in mermerOperators chandising equipment as a steady inchandising equipment as a steady in- ANNUAL GROSS GROSS RECEIPTS RECEIPTS (Billions) (Billions) ANNUAL 10 10 9 9 8 8 -8.9 8.9 8 .2 8.2 - 6.4 6.4 7 7 6 6 4.5 4.5 5 5 4 4 5.4 5.4 -6.4 1987 1987 1988 1988 6.4 - 4.5 4.5 - - 1984 1984 1985 1985 33 - 4.0 4.0 - 2 2 11 1981 1981 1982 1982 1983 1983 1986 1986