Play Meter

- STATE OF THE INDUSTRY Valerie Cognevich Good news and bad news as industry matures T his is the twelfth.yeanhat Play Mete has tracked the course of the coin machine industry. Of course, we don't make up the figures; we depend on our operator/subscribers to let us know how their businesses are doing . A detailed survey form is sent to operators, who are asked to fill it out and return it to us. We deeply appreciate those that take the time to do this and offer our heartfelt thanks . For those who feel that it is not important enough to warrant the time it takes, I can only ask you to reconsider next year. Each operator's statistics do help in the final analysis. We'd like to remind you that these numbers are only averages compiled from the hundreds of surveys we receive. If you are making much less or much more than what you see here, that is to be expected. However, these numbers will give you an idea of what the average operator is doing. We strongly advise any governmental bodies to refrain from using this report for any legal opinions. It is intended for the private use of the coin-op industry. The biggest changes I think many of you will be surprised that the industry gross total has risen significantly from last year. In fact, you may find it a little hard to believe. At a time when more operators, distributors, and manufacturers than ever before are bemoaning the industry, it may seem ironic that this total rose from $7 billion to nearly $8 billion. 10 PLAY METER 1991 Directory However, once you begin to study the numbers, it is apparent that although video games-from purchases to the average weekly gross averages- are down considerably, quite a number of other types of equipment have registered significant jumps. Just one example is redemption equipment, which last year showed a weekly average of $136; this year it jumped a whopping 84 % to $251 ! "I'm finding it hard to get locations because of the poor business practices of previous operators who ran unsupervised arcades. '' In an industry judged fairly-or unfairly, as the case may be with video games- it must be noted that video is simply settling into its own little niche in a much broader industry. This year, which we called one of transition in our "Year in Review" story in December, makes that observation even more striking. While we must concentrate on video games, since nearly all operators answering our survey counted video as their primary equipment, there is a lot more equipment making a heavy impact on the industry . Video Games Video games still account for a hefty percentage of equipment on operators' routes. Last year operators averaged about 233 video games on location, while that number rose 18% to 277 this year. However, purchases dropped 12 %, from 210,000 to 184,000. This would indicate that operators are operating more older equipment than they have in the past. Although purchases have dropped, there are still over a million video games on location. The percentage of kits to dedicated equipment purchases has changed also. In 1988, for example, operators bought 153,000 dedicated games compared to 90 ,000 kits . Last year, just 80,000 dedicated videos were purchased compared to 130,000 kits . This year that ratio has continued to favor kits- I06,000 kits, 77 ,000 new dedicated. Kits have also registered an impressive increase in their average gross collections. For the first time, the average on kits is higher than dedicated games-$85 compared to $73 for dedicated games. Last year dedicated games had a weekly gross averageof$78; kits, $62. The year before that dedicated, $92; kits , $68 . The number of operators buying fewer video games rose from 60 % last year to nearly70 % this year. While43 % ofthem last year cited price as the main reason they were buying less, this year just 30% said price was the reason. Nearly 19 % reported