Pinball licencing 101: how much, why – and Harry Potter
Do you have a licence for that beverage, sir?
Stern does it. JJP does it. Dutch Pinball and Skit-B do it. And now Heighway Pinball does it too. From the very biggest to the newest to the boutiquiest, pinball makers of all sizes are planning new games with licenced themes.
But how much is known about the niche business of pinball licences? How easy are they to get? How much do they cost? And what makes a licence a good one?
To find out, Pavlov Pinball decided to ask an expert. And in the field of pinball licencing there’s arguably only one person to talk to: Roger Sharpe, the pinball player, historian, author and designer who was licencing and marketing director at Williams Bally Midway. He continues to be involved in pinball licencing to this day through his own Chicago-based agency, Sharpe Communications.
So here’s the first burning question that many people are asking: without going into the details of specific licences, how much does a pinball licence cost?
The bottom line, says Sharpe, is that at the very least it has to cover the licensor’s costs: legal, approvals, asset acquisition as well as other business related costs. If it doesn’t at least show some positive financial upside, then the whole thing is a non-starter. But if it does, then it’s potentially game on.
“If you know the business then you can make a deal which is reasonable to both sides, one which doesn’t make it unrealistic for the manufacturer to make a profit,” he says. “There may be guarantees, royalties – there are many ways to make deals that are fair to both sides.”
OK, but how about some real numbers. Some people have talked about per-machine licence payments of $100 to $500. How realistic are those figures?
Sharpe says they are definitely on the high side. “$100 per machine? I have never done a licence at that figure for a pinball machine,” he says. “The profit margins just don’t make sense. All the licences I have done with pinball are for far less. I would find it hard to believe that either Stern or Jersey Jack would ever commit to spend $100 per game.”
But that may not be the case with some of the newer companies that have started up, he adds. “I have heard that some companies have spent triple digits (i.e. over $100 per machine) for a licence when they didn’t need to. This is serious because they could end up pricing themselves out of the marketplace. Next time around, when they negotiate, the studio or agency will want the same as was paid previously and since it tends to be a very small world, working with a different licensor might not result in anything different because everyone knows everyone.”
Pinball machines have a certain sexiness which is unique
An obvious question to ask is the extent to which licence holders are interested in speaking to boutique pinball manufacturers at all. Wouldn’t they rather deal with one of the industry heavyweights, such as Stern or Jersey Jack, which is likely to make thousands of machines rather than a company that may only plan to make a run of 200 or 250 units?
Not necessarily, says Sharpe. “Pinball is something of a speck on these company’s balance sheets,” he points out. “Even back in the day, the amounts that were generated from pinball tended not to be as significant as the money earned from T-shirt sales or action figures. Those dollars really add up.”
So why do they bother licencing their brand to a pinball manufacturer at all if the big bucks are made selling clothing and toys?
This answer to this question is one we all know. It’s because it’s pinball, baby!
“Pinball machines have a certain sexiness which is unique,” says Sharpe. “There is a value to these companies in having a licenced pinball machine – it is an extra add-in to the ancillary promotional mix. The Walking Dead doesn’t need to have a pinball machine, but having a pinball machine as part of that is kind of neat.”
Before granting a licence, the holder will want to know that the company is real and legitimate, and having someone such as himself involved can be vital in securing a deal, Sharpe says. As an example, he says that he helped Heighway Pinball get the Alien licence, despite the company having no product yet on the market. “I knew the people responsible for the Alien licence, and if wasn’t for my involvement, I don’t believe that Andrew would have been able to secure the licence and definitely at the rates I was able to negotiate,” he says.
A licence doesn’t automatically give you credibility, just instantaneous recognition
When it comes to licencing themes to smaller pinball companies, do licence holders care whether a big name designer like Dennis Nordman may be involved in the development of the machine? Sharpe says generally not – although there are exceptions. “With Lucasfilm Licensing, they were really in to pinball, so they were very excited that Mark Ritchie was going to be working on the original Indiana Jones machine,” he says.
Given that a licence is going to cost money – there’s no way around that – then what can a pinball company reasonably hope to gain from paying for one. “It provides a way to distinguish game X from game Y, and it gets you immediate recognition and attention, says Sharpe. “Look at Dutch Pinball with The Big Lebowski, and at the positive response Heighway Pinball received when it unveiled Alien.”
But he points out that a good licence doesn’t guarantee success. “The licence gives you a semblance of credibility whether you are a new or an established company, but you still have to carry it through. A licence doesn’t automatically give you credibility, just instantaneous recognition.”
And to follow through with a great game, you need to have a designer who is really in to the theme, Sharpe warns. “If the designer doesn’t buy into it, it just doesn’t work. But with Star Trek, No Fear and Terminator 2, Steve Ritchie just said ‘this is me.’ And with Elvira, some people were hesitant about the title, but Dennis Nordman loved the idea, and so did Greg Freres. The success of both games proved that the right team could create something wonderful.”
(The story with The Addams Family was slightly different, Sharpe recounts, and Pat Lawlor was initially hesitant about the licence. “It was only when I was able to get Pat the script as well as all the key talent and other assets that he felt comfortable even to proceed and the results were record breaking for pinball,” he says.)
In terms of the actual theme, Sharpe says you have to look at whether it is timeless, or whether – in the case of most feature films, you can ride the coattails of the success that it potentially has before interest falls away.
“You also have to look at a variety of other factors such as who the player base will be,” he explains. “Is the purpose to build a small quantity of games for collectors and enthusiasts or to tap in to commercial operations? If so then the licence needs to be more universal.”
So what about the great Harry Potter question? That would seem to be an ideal licence for almost any pinball company, but rumour has it that the author will never allow a Harry Potter pinball machine. Is that the case?
“J.K. Rowling doesn’t want a pinball machine at the moment. The category is not one she wants to happen,” says Sharpe.
But there’s possible good news for Potter fans.”I am first in line for the licence, and I am waiting for when the timing is right,” he says. “When it is I will see if a particular manufacturer will step up – or I might like to do it myself.”
Most licences are for feature films, TV shows, musicians and bands, cartoon figures, sports or sportsmen, and even the odd car or game (think Monopoly). Does Sharpe see any new avenues for licencing?
For example, in the ’70s Game Plan released two games based on products. One was a Real cigarette brand-themed cocktail table pinball and the other was based on Black Velvet whiskey. And while at Williams Bally Midway, Sharpe looked at making a Budweiser themed machine, though that never got off the ground. So is there any chance that we might see pinball machines with consumer brands (although probably not cigarette brands) in the future?
“Are there other categories of properties that might be suitable? Absolutely,” he says. “We have seen fashion designers tied in with automobiles and a range of other products themed to numerous types of products, so nothing should ever be considered off limits…”
A Victoria Beckham pinball machine? Perish the thought.
Pavlov Pinball related article: Does pinball licencing work?
Feature photo by Rebekah Esme
Money photo by Cooperweb
Elvira photo by pinmonkeypress
Sharpshooter photo by Martin Wiest
The Walking Dead photo: Stern Pinball Inc.
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