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After Years of Erosion and Declining Popularity, Midway Game Operators Feel the Worst is Over

6/10/2015

By Timothy Herrick

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Winning a Teddy Bear at the annual fair was once equivalent to a ride on the Ferris Wheel ride or your first corndog of the year. But for more than a  decade, more fairgoers not only leave without a prize, they were not even playing the game. 

What some consider the most challenging segment of the fair industry only got tougher in the 21st century. To try and improve the image of games, revive their popularity and better manage this revenue stream, many fairs have drastically shrunk the number of games on the midway. At the same time, the closeness of fair monitoring of games and the imposition of stricter rules regulating how the games are played, are nearly unprecedented in the history of the fair industry. 

"The game business is still very viable," said Jack Cook, president of Bob's Space Racers, both a manufacturer of games and a game operator at fairs and other outdoor events. "But it has always been a tough business. Games are the last thing people spend on at the fair. After their admission, the food, the rides, they might play a game. When people had less money to spend, the games are what they cut out."

Perfect Storm
A perfect storm of more competition and a growing image problem, combined a recession that took a bite out of attendees with disposable income to spend at the fair, resulted in the erosion of the game segment of the fair industry. 

The most predominant was the change in social trends - from the proliferation of video and computer games to the growing number of casinos - the inescapable fact is that while winning a prize at a game of skill remains an appealing aspect of the whole Americana experience of fair attendance, the actual playing of a game is far from unique. Unlike  riding a Ferris Wheel or eating a corn dog, the brief excitement of risk and reward game playing offers is now readily available, throughout the year, from a multitude of sources. 

As the other game options became more common, the gaming segment of the fair industry was plagued by a perception problem. Instead of dad winning his family a stuffed animal, games were increasingly viewed as often unsavory barkers cajoling fairgoers to play games impossible to win. In addition, there were accounting issues with the games and some operators - fairs and/or midway companies who subcontract with the games. 

The confluence of all these factors forced many fairs to overhaul their game business. "The game business went through a decline," said Cook. "If you cannot run the business properly, you cannot make the shift to the new realities. You can't make money by accident."

Social changes have been the most disruptive factor impacting games at fairs has been changes in society. There are simply more opportunities to play games now, from smart phones to casinos. "The expansion of casinos and gambling, has hurt the game business, but it has also hurt the fair business," said Adam West, president and founder of All State 38, Inc. "Kids have thousands of games on their iPhones.  There's places like Dave & Busters throughout the country.  There is not as much interest in the fair games." 

Cook  pointed out that the erosion of games was not isolated to only fairs.  "Games are losing a big at Amusement Parks, who have cut back on games," he said. "There used to be arcades filled with computer games at every shopping mall, but they've all disappeared too." 

Game Reduction
Games at fairs may not have vanished like Pac-Man and Space Invaders from the local shopping mall, but the reduction in the number of games within the last few years is sobering. For example, at the Florida State Fair earlier this year, there were 25 games, down from 45 in 2014, according to Fred Brown, who as Director of Operations for decades, but now as he eases into semi-retirement, is serving as Concessions Manager and Midway Liaison. 

This reduction a the Florida State Fair has been relentlessly steady- it was 51 games in 2012 - and in 2008, before the full force of the economic downturn was felt in Florida, the fair featured 72 games. In 2015, the Florida State Fair contracted with a new midway provider - Wade Shows - and some of the cutback in games from 2014 to 2015 was can be attributed to a midway redesign, but the fact of the matter is that the games had been slashed year after year prior to this year's fair. 

"The impression was that there were too many games taking up space and they were not busy enough of the time," said Brown. "We had to sit down, decide on the types of games we wanted. Some games were not producing, we didn't want them here."

The Minnesota State Fair has reduced its footprint to 47 - only a few years ago it was 62 - "The theory is that a fewer but better run games," said Jim Sinclair, Deputy General Manager, Minnesota State Fair. "We can pay closer attention to the how the games are run. In general, we can make sure that guests are getting a good value playing games." 

Recession & Retirements
West is one of the younger game operators in the business - he was born in 1985 - and spent several fair seasons managing concessions for carnival companies, including Murphy Brothers Exposition and Wade Shows, before he formed All State 38, Inc. in 2005, which features a total of approximately 16 games, playing about 30 fairs and other events per year. 

West recalls as many as 100 games at the larger fairs when he started out, a market condition he now feels was over-saturated. He admits, "There were probably too many games." 

The recession further fueled the subtraction of games from fairs, as did the fact more operators were retiring than entering the business.  "The economy was not the only reason, there were operators who retired, their children went on to other things, and the recession was the last straw," said West. 

Today, West sees few game operators his own age. The lack of new blood replenishing an industry's profession can also impeded its growth.  "There's a few younger guys," he said. "But there's a lot more guys with gray hair at the conventions, they've been in the business longer than I have and are getting ready to retire." 

"In the bad times, the games were hurt at fairs more than the food or the rides," said Cook. But as the amount of games began to dwindle as spending on games at state and county fairs declined, Cook said that during this same period, games remained a substantial part of smaller outdoor events. "During the recession, games had a strong presence at the smaller, more local fairs, at churches and shopping malls, which have free admission."

Cook admits, "We lost operators when the economy was bad."

"There were game operators who were a little shaky, and fairs started to take a closer look at games," said Chris Walden, of Walden Concessions. "The bad economy hurt, but it wasn't the only reason for game operators leaving the business." 

Walden has 23 years experience in the game segment of the fair industry. In addition to his company - which has six games and some food concessions that play about 25 fairs and other events, mainly in Missouri, Illinois and Kentucky - as either a private contractor or with Tinsley Amusements.  Walden acts as Games Coordinator with the Minnesota State Fair and the Wisconsin State Fair. 

Walden feels that recent years hurt game owners. "It was getting harder to stock the inventory, the costs were higher, and the fuel was high, so we saw a few go out of business," said Walden   "Fairs were also cutting back on the number of games, but I think that has leveled off."

Less Games, Same Revenue
What fairs noticed was that reducing games had either no - or a positive effect - on game revenue. "Fewer operators are generating the same amount of money, said Sinclair. "We are seeing the same gross and we have a more successful throw. Fewer games haven't corroded our bottom line."

As recently as 2011, the Wisconsin State Fair had upwards of 60 games, a number steadily dwindled. Adam Heffron, Director of Event Services, expects to have 29 games this year. "We took the midway in house, and just as we now handpick the rides, we are handpicking the games."

Heffron estimates that the 2015 annual celebration of everything Cheese State Fair required contracts with only 10 game operators. "Now each game owner is not over extended," he said. "We can be positive the owners are onsite and personally involved with their games." 

The reason for this steady reduction over the years, is that "We felt the game revenue was not at the level we expected," said Heffron. "More games did not increase revenue.  We found with further reductions, the revenue stayed the same, and when we booked operators for a certain number of games, from two to four, we could generate a more accurate revenue figure." 

By eliminating games, the fair was able to more closely monitor the section of the fair. "Regardless of the number of games, we look at the gross, and by eliminating five more games, my game gross increased," said Heffron

But the reduction of games at the Wisconsin State Fair Midway was not an action taken in a vacuum. The fair also is now more closely monitoring games, ensuring that certain standards - for example, the basketball toss had to use a regulation rim - were met and "fair play" was achieved for every fairgoer. "It was easier to win, people won more fairly and the rules for playing the game were more concise," said Heffron. 

Operators acknowledged that decreasing the number of games has benefits for the midway. "It has created a better atmosphere," said West. "The games look busier, there is more energy. It makes people want to play when there's more people around a game than spread out among more games."

For the game operator, not only is there now more potential for higher revenues because of the decreased competition for fairgoers, "but we do have lower overhead, less labor cost," said West.  

Image Problems
Consolidating the game section of the midway was also accompanied by fairs realizing that poorly run games undermine the mission of family friendly entertainment. Games are a front line of interaction between the public and the fair; in the 21st century, game employees are neat and clean, often in uniforms, and project the positive image for the fair.  

"The customer experience tends to stand and out when it comes to games," said Tony Cassata,  Operations Manager, Bob Space Racers. "When somebody comes to the fair, and they have a bad experiencing with parking, or feel the ride didn't go long enough or the corn dog wasn't to their liking, they don't blame the fair.  But if they feel they've been ripped off by a game operator, they blame the whole fair."

Stock Throw
To keep the highest percent of fairgoers happy about the game experience is to make sure that a higher percentages of game players are prize winners. In the last few years, more fairs have implemented stricter Stock Throw percentages - how many players will actually win a prize. Stock Throw percentages are generally based on cost of the plush (i.e., prizes won by fairgoers). 

"When you throw out stock, and people know they can win these games, they not only enjoy the experience, they remember you from last year and come back to play every fair," said Walden. 

Ronald E. Burback, president and founder of Funtastic Shows, has been in the carnival business since 1947 and claims that his company is one of the few midway providers who began with games then added rides. His philosophy - which fairs and other gamer operators have adopted - is that he is actually not in the game business. He is in the merchandise business.

"I sell Teddy Bears," he declares. Of course, Funtastic Amusements has a full line of the latest, licensed plush (Sponge Bob is a perennial favorite, but game operators anticipate the dinosaurs from the new Jurassic Park movie to be big sellers), Burback calls all the merchandise Teddy Bears.

The closer monitoring by fairs - and the move by some midway providers to own their own games instead of subcontracting out this segment - has not surprised Burback. "We have always owned the games, because that was the only way I could have complete control," said Burback. "You have fewer problems. I hire local workers to run the games at each fair, so they get paid the same amount no matter who wins and I can throw the merchandise. Selling the Teddy Bears is what matters." 

Stock throw percentages are generally based on cost of the plush (i.e., prizes won by fairgoers). The Minnesota State Fair places another restriction on top of the 25 percent throw, a limit on the wholesale price of the top prize of $50. "Without this limit, the stock throw are percentages without context," said Sinclair. "We want more people to win more prizes, not fewer people winning bigger prizes. If we limit the maximum of the prizes, it means operators will inventory more stock." 

Liberal stock throws are no longer the exception, but the rule among game operators. "The easiest thing for an operator to do was trim the merchandise cost, but that is that worst thing, because for a game to have vitality at the fair, you need a stock throw of 25-30 percent," said Cook. "Fairs are looking more closely at the operators. Fairs want people happy and people are happy when they come to the fair and win a prize."

Like many fairs, Minnesota is also enhancing the game experience for fairgoers, removing even the appearance of chicanery. "We try to eliminate confusion in signage," said Sinclair. "We eliminated double wins." 

As Sinclair explains, in some games, players could accumulate multiple wins for larger prizes, although players usually wound up spending more money and never winning the big prize. "We eliminated those schemes, and now we have a straight forward progression, combining three wins on top of a current prize to trade up." 

Ticketed Games
Some games are also switching from cash to the more easily monitored tickets. "Cash is the most dominant," said Cook, who said that most operators would prefer a shift to tickets. "Everybody would like it to change. More fairs are going to tickets for the games. Operators like that because when people have tickets left over and are ready to leave the fair, they'll play a game. 

According to Sinclair, when the Minnesota State Fair switched from cash to ticket games - "there was apprehension that first year, it was new and operators were reluctant to change. Within 72 hours, the operators were telling me that this is great, it was easier to reconcile when closing out. They just bring the tickets, and weigh them, and are not handling cash, and when people are not handling cash, they don't have to always be in front of the owner of the game. There's less problems."

Sinclair said that revenue increased by 15-20 percent after switching to a ticket system. "It has changed the complexion of the games. With tickets, we discount tickets for games like we discount the rides for promotions."

The new ticketed format for games, Sinclair said, has "broadened" how the fair can promote games, which furthers the popularity of the segment and expands its customer following.  "If we have a game that takes four tickets, during our promotions, we can discount the number of tickets, to say three tickets, and that broadens our games."

Fair Traditions
Game operators insist their business is still tough - plush inventory expenses are rising and margins are thinner for games than other midway concessionaires - but they are optimistic that the worse is over. "We're the low man on the totem pole, but there is a stable percentage of people who go to fairs who like to play games," said Walden.

"Games are a tradition at fairs that people still love," said Burback. "A father winning a Teddy Bear for their kids or a boyfriend winning a prize for their girlfriend, that's what a fair is all about." 

"In life, we don't usually get to win," said West. "When the carnival comes town, it's still a major tradition for families, that hasn't changed. You need to put on more of a show at the game, families want to have a good time at the games. I feel what we sell is fun. At the end of the day, people still want to beat the game." 


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