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Economics of the rise and fall of pinball
Pinball machines
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TEXT OF INTERVIEW
Kai Ryssdal: If you were a teenager in the early 80s, and this is probably more true of men than of women, chances are you spent a lot of time in the arcade becoming familiar with the sound of this:
PINBALL MACHINE: Launch of ball. Ping, ping, ping, ping.
Pinball machines. Used to be they were everywhere. Arcades, movie theaters, bars, but not so much anymore. It turns out that what made the machines such a hit at one point is actually what did them in.
Jeff Ely is a professor of economics at Northwestern University. He wrote about economics of pinball the other day on the blog "Cheap Talk," so we called him up. Good to have you here.
JEFF ELY: Hi.
Ryssdal: I have to tell you I read a fair number of economics blogs, but this is the first one I've seen, posting, about the economics of pinball. Where did this come from?
ELY: Well, I was a pinball player in high school. At some point I noticed that pinball had disappeared. And I had questions about why, ideas about why. I sort of used my training as an economist to think about what were the reasons. And just as a miracle, the other day, I was at a party, and I met this guy who was involved in the design of all these classic pinball machines. And the moment I found that out I just unleashed all these economist questions to them to find out what was going on in their head. And it turns out exactly what was going on in my head was going on in their's, too.
Ryssdal: In this post that you wrote about this, you actually point out two games: A game called "Black Knight" and then something called "High Speed" that are pivotal moments in the history and decline of pinball. Explain.
ELY: OK, so I was 12 when "Black Knight" appeared, in 1980. What I can tell you, my memory of "Black Knight" was that I was at a mall, and I saw these old-style Fenway-Park-scoreboard, analog-buzzing-and-beeping pinball machines pushed to the side to make way for this gleaming thing called "Black Knight" that had this digital voice saying, "Will you play the Black Knight?" And it had multi-mall features, and multimedia, and all of this. And you know, I was only 12, so I couldn't play the game for very long. But it was hard. It basically changed the economics of pinball. Because now with the digital features you could program the high-score threshold -- what you needed to get to get a free game -- on the fly. OK, so you could figure out how many people were playing the game, what their scores were, what the average score was. You could act like a textbook monopolist plotting a demand curve using sort of on-the-fly data generated by these pinball players, and figure out was the high score that would maximize whatever. You know, how many people were plunking quarters into the machine.
Ryssdal: So this machine was adaptive, right? It changed score based on who was playing and their skill levels.
ELY: Exactly. Now the other thing that they did, which was really cute.... You know, there was this old thing called "Match." OK, so for these analog pinball machines, there was this little thing that spun around and if it matched the last two digits of your score, you got a free game. Now with the digital scoring the computer basically just picked it in funny ways to try to get people to play when it needed people to play, and not to play when it didn't. So, for example, if you and your girlfriend had just played a game -- you put two quarters in the machine and neither of you got a free game -- it would very often give one of you a match, so that the other would put in another quarter and keep you playing. There was kinda some basic price theory at work here, and then pure behavioral economics behind the match.
Ryssdal: And then a couple of years later this thing called "High Speed." Where did that come in?
ELY: OK, so "High Speed" was kinda the next generation, taking advantage of these digital features. It was at that point that the game was really, really advanced to the point where beginning pinball players were really discouraged from playing -- if they didn't have those skills that they had learned on these gateway machines like "Black Knight."
Ryssdal: Does this apply with other video games, like, I don't know, like "Pac Man" as an arcade game. Did they do the same thing?
ELY: Video games are purely digital, so you could change the level of difficulty on the fly, as a player was playing. So you had very easy levels that drew in the easy players, and then the level of difficulty increased. Pinball, once you design the machine, it's designed, you can't change it in the play of a given player, and so you either had to target the hardcore players or the beginners. And they took the hardcore route, and that was great for pinball early on, and it eventually spelled its demise.
Ryssdal: Jeff Ely. He teaches economics at Northwestern University. He blogs at a blog called "Cheap Talk." Jeff, thanks a lot.
ELY: Thanks.
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I played in the 60's and early 70's in Philadelphia corner stores. Th machine were set to five balls per play. Price was 5 or 10 cents (can't remember). I restarted in the late 70's early 80's to find...the following 3 balls per game and 50 cent per play...that turned me off...especially 3 ball crap. Now I own Stargate (gotlieb 1995)...I discovered that you can customize most settings...now its set to 5 balls per play and, easier play...teenagers are more interested when they can win!....
One of the points that I think people are alluding to that he missed in mangling pinball history is that the biggest selling pinball machine in history, Addams Family, was in the early 1990's. Without High Speed and similar machines of its period, Pinball would probably have died out in the late 80's. The economist being interviewed is just displaying a the kind of intellectual arrogance freshman college students dude by extrapolating a false overarching theory from limited information. Why are both of the machines he mentioned Steve Ritchie designs? Because he didn't actually research pinball, he's just decided to write an article and do interviews based on something Steve Ritchie said to him at a party he went to for his kid. Catering to the entry player and the hardcore player has always been something that pinball designers have attempted to do, it wasn't until the mid to late 90's they started really failing at it.
Wrong. The facts in the original article and the interview are wrong. Plain and simple.
Black Knight was an early Solid State pinball machine manufactured in 1980 but there were a number of machines manufactured BEFORE Black Knight that were "digital."
The matching function never had the ability to determine that 2 people were playing so we'll match one player in hopes of getting the other to pay again. Match during Black Knight's era was and always has been RANDOM. The operator had no control over when it would hit.
"Replay Percentaging" is what the writer attempted to address. It was not implemented until High Speed - released in 1986 - which came 6 years after Black Knight.
It was a simple mathematical calculation that would alter the replay score based on the score that was acheived in the last game. Better players would have to achieve even higher scores to win free games. Nothing magical about it.
So why the downfall of Pinball? It's simple really. Pinball machines are expensive, they REQUIRE regular maintenance to keep them running properly. Machines that are not running properly don't make money.
Operators place a machine on location and do one thing - they show up once a month to collect the money! Then 6 months later they wonder why the machines income is down. Meanwhile, 1/2 the lights on the playfield are out, a number of switches are out of adjustment, the flippers are so weak that you can't even shoot the ball up the ramp, etc. etc. etc.
This coupled with the fact that more and more powerful computers and gaming systems are readily available to today's youth. For in home use. Today you don't need to go to an "arcade" to play games. These types of gaming locations are scarce.
With only one manufacturer of pinball machines left in business it's inevitable that these symbols American pop-culture will soon be a thing of the past.
The only way to turn it around is to introduce today's youth to the challenge, the wonder, the physical experience of playing pinball. Show them how pinball has so much more to offer then a video game.
Real skills are involved in mastering a pinball machine. Gravity, tact, mathematical angles, the laws of physics, aiming, strategy and playing techniques all play a part in a typical game of pinball. None of this can be achieved from a video game.
I'd never thought about it before, but I think this article is spot-on. I loved playing pinball, but the machines became complex, making them expensive, making the price of the game go from a quarter to fifty cents. Add to that the difficulty of the new games, and it ends up being a lot of money for a little fun. Whenever I see an old, mechanical game that's a quarter, I drop one in and enjoy my time with it. The newer machines just seemed to eat away my allowance.
The real point, as others have sort of stated, is that video games generated far more income than pinball could in a given footprint of lease space. In fact, two video games can reside in the footprint of a pinball game.
As to the interview, it was childish and felt like it was done for a highschool newspaper. This poor fellow really did not know about the cultural aspects of pinball. The commenter on the changing social aspects of human interaction made some very valid points.
But, thanks for the mention of pinball. I appreciate the effort but not so much the content.
I'm inclined it's a natural curve of a innovation bubble. Pinball machines are relatively inexpensive and collect lots of money. People innovate better pinball machines to compete against the other pinball machines. People expect bigger and better. At some point either the receipts start to dwindle or orders from operators dwindle because the new thing is just too expensive. And so as the number of pinball machines goes down it then leads to reduced income from all the other machines. Send in the repo man if they're not paid for, and numbers go down even further.
"Attack from Mars" was a fun pinball comeback in the mid 90s; short lived, though, as its successor did not allow novices such as myself to get too far (I really loved the "multi-ball", with six or seven balls going around the board all at once).
I guess the lesson for video game makers, don't make your video games unreasonably hard to play? I'm talking to you, CAPCOM.
Kai Ryssdal, I was your family dentist,when I practiced in Pleasantville for 37 years.Now teach at
Columbia University College of Dental Medicine.Big change in dentistry root canal treatment way down,patients choose
implants rather than RC,which usually
needs a post&core& a crown to restore.
The theme of pinball figures prominently into a recent piece I composed about the changing economy and US political situation. It is interesting to learn the actual economics behind my metaphor. You can find my piece here on my blog: http://michaelczinkota.blogspot.com/2009/10/pinball.html
Thanks for a great story!
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