The birth of the first viable electronic interactive entertainment industry in 1972 resulted from the convergence of two separate forces: computer technology that was finally becoming cheap enough to incorporate into a mass market entertainment product thanks to advances in integrated circuits, and a coin-operated entertainment business with well developed manufacturing and distribution channels across the United States, Western Europe, East Asia, and South America. In the period before cost-effective large-scale integration, an affordable, feature-rich home video game remained a nonviable proposition (yes, there was the Magnavox Odyssey, to be discussed later, but it was primitive and arguably did not deliver a good cost-to-game-play ratio), but the coin-op industry represented an outlet into which a company could sell a $1000-$2000 product to an operator for use by the general public, who would help the operator recoup his costs one quarter at a time. Therefore, to fully understand the dawn of the video game age, it is helpful to pause and look back on the first hundred years of coin-operated entertainment, roughly spanning the period from 1871 to 1971.
NOTE: And here we are again with a historical interlude, which will cover the history of coin-operated amusements in six parts. The information in this post is largely drawn from Automatic Pleasures by Nic Costa, Arcade 1: Illustrated Historical Guide to Arcade Machines by Richard Bueschel and Steve Gronowski, and an article entitled “The Penny Arcade” in the March 15, 1947 issue of Billboard Magazine.
The Birth of Coin-Op
The Miser, a coin-operated working model created by John Dennison
In its broadest definition, the coin-operated machine industry encompasses all those automatic devices that provide a commodity or service in exchange for currency inserted into a slot or feeder. The industry is usually subdivided along the lines of the service rendered, whether it be vending an item, playing music, offering the opportunity to win a cash prize, or providing a few moments of entertainment. The idea of inserting a coin into a slot in order to receive a commodity first occurred as early as the first century of the common era when renowned mathematician Hero of Alexandria published plans for a device that would dispense holy water at Egyptian temples. The first coin-operated vending device to enter general use was the “honour box,” a small wooden or metal box with a spring-loaded lid that would open when a coin was inserted, which first appeared in England around 1615 and became popular in that country by the eighteenth century. The name of the device derived from the need to trust that a patron would only take a pinch of snuff for his coin, as these devices were incapable of regulating delivery. Due to the difficulties inherent in policing the use of these early coin-operated devices, a wider automatic vending industry did not develop until the dawn of the Industrial Revolution.
In 1822, bookseller Richard Carlisle took the first halting steps towards a practical coin-operated vending machine. A professed radical, Carlisle often ran afoul of the British authorities for selling prohibited and proscribed books, subjecting both himself and his assistants to prosecution. Carlisle’s solution was a contraption added to the front of his shop featuring a coin slot and a dial. A patron would insert a coin and select the book he wanted by turning the dial to the appropriate title, after which the item would be delivered through a chute. This was not a fully automatic device, however, as the book was placed into the chute by hand by one of Carlisle’s assistants. The idea was that if a buyer did not know who actually provided the book, no one could be placed on trial for selling seditious literature. Unfortunately for Carlisle, the ploy did not work.
By the 1830s, further advances in mechanical technology led to the introduction of the first honour boxes in England that automatically regulated the delivery of snuff, which was provided in a paper package and delivered through a coin-regulated drawer. Following the introduction of the first postage stamps to the United Kingdom in 1840, an inventor named Simeon Denham took his own crack at the vending machine with a device that automatically cut a stamp from a roll and delivered it to the customer upon the insertion of a penny. The machine was patented in 1857, the first coin-operated machine with that distinction, but it proved unsuccessful and never entered mass production. In the end, the first successful coin-operated devices would not be vending machines, but rather amusements.
In the mechanical age, viable coin-operated entertainment required sophisticated clockwork mechanisms powered by some combination of pulleys, springs, levers, and gears. Archaeological evidence demonstrates that the Ancient Greeks possessed a sophisticated understanding of the necessary clockwork, but much of this knowledge was lost in Europe during the early Middle Ages and would not be fully recovered until the fourteenth century after being reintroduced from the Islamic world. By the eighteenth century, clock makers were beginning to expand their art beyond time keeping devices with such celebrated creations as Frenchman Jacques de Vaucanson’s mechanical flute player crafted in 1738 and a series of automata created by Swiss clock maker Pierre Jacquet-Droz between 1768 and 1774. While these machines were largely created on the Continent, however, they were primarily displayed in Britain, which held a fascination with all things mechanical as the Industrial Revolution took hold. Public exhibition of automata commenced on the island nation in 1772 with the establishment of the Coxes Museum in London by James Cox. By the 1830s, exhibitions could be as large as 200 machines, and by the 1860s automata began appearing not just in permanent exhibitions, but in travelling shows as well.
The automata of the late eighteenth and early nineteenth centuries required an attendant to operate, but they eventually evolved to incorporate coin control. The earliest known machine of this type was a fortune telling device patented by J. Parkes in 1867. Fortune tellers were a popular staple of fairs, so Parkes developed a machine that would provide a disk with a question on it for a penny. The patron would then insert the disk into a slot, thus sending it down a runway peppered with holes. Each disk was a different diameter, so it would only go down a particular hole, causing an appropriate fortune to print on a ticket vended to the patron. Parkes apparently never publicized his invention, so the first widely exhibited coin-operated amusement was a device developed by Henry Davidson and first displayed in 1871 in which a mechanical chimney sweep would jump from the chimney of a house when a penny was inserted. This machine was the first of the so-called “working models,” which were particularly popular in Britain and consisted of figures that would come to life and perform actions when a coin was inserted. Davidson booked his machine into every agricultural and industrial fair he could and soon spawned many imitators.
The first recorded individual able to make a living entirely through the manufacture of coin-operated machines was a Leeds mechanic named John Dennison. In May 1875, Dennison displayed his first working models, demonstrations of a drilling machine and a hand lathe, at the Yorkshire Exhibition, which were well received by the public. He soon began building both mechanical fortune teller machines and working model dioramas for installation at exhibitions, fairs, and bazaars. By 1882, Dennison had been joined by a host of other manufacturers as working models became a popular diversion. In the early 1890s, Dennison struck a deal with the Blackpool Tower Company — formed to build a replica of the Eiffel Tower in the English coastal resort town of Blackpool — to supply his working models to the tower exclusively from its opening in 1894. This arrangement afforded Dennison a steady income for the rest of his life and continued long after his death in 1924 until his daughters finally sold their interest in the venture to Blackpool Tower in 1944. The tower continued to operate the original machines until 1963.
John Dennison was a successful manufacturer and operator of coin machines, but he was not much of an entrepreneur. While his business was profitable, he never mass produced his working models or sold them to other concerns: every piece was custom built and operated by him and/or his family. Therefore, while he played a critical role in the spread and acceptance of coin-operated amusements, he failed to jump start a full-fledged industry. It would fall to others to bring con-operated devices fully into the mainstream, most notably an inventor named Percival Everitt.
A Mills Novelty Company coin-operated shocker built c. 1900. Such machines were popular for decades after first being developed in 1886.
Little known today, Everitt deserves more than any other individual the title “father of the coin-op industry,” for no man did more to spread coin-operated technology around the world both through his patented designs and the many companies he established to sell them. Everitt entered the industry on the back of one of the newest crazes in Europe: the postcard. First developed in Austria in roughly 1869, the picture postcard soon became a staple as a convenient way to send a message home from abroad or to keep as a memento of a trip. In 1874, the Treaty of Bern established the General Postal Union with a mandate to coordinate postal policies among the treaty’s twenty-two signatories. This led to the standardization of postcard size and cost, making them particularly well-suited to coin control. In 1883, Everitt and a partner, John Sandeman, introduced a cast-iron machine in London that vended a postcard for a penny. In 1885, Everitt introduced an improved model and established the Post Card and Stamped Envelope Supply Company, which placed over one hundred post card vending machines around London. In November 1887, Everitt established another company, the Sweetmeat Automatic Delivery Company (SADC), that played a decisive role in the spread of the vending machine. Starting from a base of 1,500 machines around London, SADC quickly opened branch offices in Birmingham and Manchester and signed agreements with 31 companies to supply its machines with commodities such as quinine, chocolate, chewing gum, cigarettes, matches, and perfume. By 1901, the company sported a market capitalization of £1.5 million and had placed at least one machine in nearly all of Britain’s more than 7,000 railway stations in addition to many public houses, hotels, and shops.
Everitt did not just concern himself with vending machines. In 1884, he patented a coin-operated scale that could measure a person’s weight and then established the Weighing Machine Company the next year to sell this invention. The coin-operated weighing machine quickly became a sensation and could be found in all manner of public places. Other than the vending machine, no coin-operated machine of the 1880s or early 1890s approached the scale in popularity, and for many people the weighing machine was their first exposure to coin-operated amusements. In the wake of the success of the coin-operated scale, Everitt led a host of British inventors that turned their attention to the various attractions found in bars and saloons, which often featured devices such as grip, punch, and lung testers that patrons could use to settle arguments about who was stronger, but did little to increase revenue for bar owners aside from a small amount of custom from the losers buying drinks for the winners. Sensing an opportunity, these men began designing coin activated testers, thereby allowing owners to monetize these contests. Important inventors besides Everitt included Richard Page, who patented the first strength testing machine in 1885, and William Oliver, who, like Everitt patented machines in a wide variety of fields, including one of the first successful electric shock machines in 1886. At the time, electric shocks were considered to have great health benefits, and machines that delivered a jolt of electricity to the patron were perhaps the third most popular coin-operated devices of the period after vending machines and scales. By 1890, all manner of coin-operated testers could be found in bars, saloons, and taverns, but, shockers aside, these devices held limited appeal for the general public. At the same time, however, another technological marvel of the late nineteenth century soon paved the way for the first venues solely devoted to coin-operated amusements.
The Dawn of the Arcade
William Smith’s locomotive working model, the earliest known coin-operated amusement produced in the United States
While the genesis of the coin-operated machine industry occurred in Great Britain, it was in the rapidly industrializing United States that the modern arcade industry first took shape. Many of the earliest coin-operated machines in the U.S. were either introduced by British inventors or modeled after their creations, and once again Percival Everitt led the way. Frustrated by the fierce competition and relatively scarce capital in England, Everitt leaned on family connections to come to the U.S. in 1885 and secured an agreement with one of the country’s only exporters, E. & T. Fairbanks Company of St. Johnsbury, Vermont, to sell his coin-operated weighing machine in North America. The next year, he set up the Automatic Selling Machine Company in New York City to sell his penny postcard vendors at street car stations.
Everitt’s activities in New York soon attracted the attention of another entrepreneur named Thomas Adams. A Staten Island native, Adams had attempted several professions before becoming a photographer in the 1860s and taking on an unusual boarder in his home, former Mexican President Antonio López de Santa Anna. As Adams’s photography career stalled, Santa Anna suggested that he try establishing a business based around the natural gum produced by the chicle plant, which Santa Anna could acquire cheaply from friends in Mexico and which had the potential to become a snythetic rubber substitute. While Adams’s attempts to manufacture rubber products from chicle failed, he soon came to realize that he could add sugar to the substance to produce a kind of chewing gum, a candy that had existed the United States since 1848 but had never caught on in a big way. First going on sale in February 1871 for a penny a piece, Adams’s chicle gum launched the modern chewing gum industry and led to the formation of Adams, Sons, and Company in 1876. When Adams encountered Everitt’s vending machines, he quickly secured the American patent rights from the inventor, adapted them to vend his Tutti Frutti gum, and began installing them in New York City rail stations in 1888. While the Adams machine was not the first gum vendor introduced in New York and sources differ on how successful they were, their introduction appears to have helped provide a catalyst for massive expansion in the design and operation of coin-operated devices in the United States.
In amusements, the United States began by following the same basic pattern as the United Kingdom, starting with working models and then moving into testers and electric shockers at bars and saloons. Unlike in Britain, however, American working models focused less on dioramas of events and more on the new industrial machines that were transforming the nation. The first of these devices, indeed the first known American coin-operated amusement, was a model train created by William Smith of Providence, Rhode Island, in 1885, which sported an actual engine powered by a wet cell battery that came to life upon the insertion of a nickel. Smith placed his trains in several East Coast railway stations as well as the Coney Island Amusement Park. Train and steamboat models by Smith and others were soon popular around the country, but it was another American invention, the phonograph, that would birth the arcade.
Thomas Edison poses with his phonograph
As early as 1807, scientists had discovered it was possible to trace the vibrations made by objects such as tuning forks, but it was not until 1857 that Frenchman Édouard-Léon Scott de Martinville created a device that could record soundwaves. Called the Phonautograph, Martinville’s device worked by linking a parchment diaphragm to a bristle that would trace a line through a thin coating of soot onto a sheet of paper wrapped around a metallic cylinder when it detected vibrations. This device could not actually play back recordings, but in 1877 American inventor Thomas Edison, while working to automate the playback of telegraph messages, devised a system using an electromagnet that would record the vibrations on a tinfoil-covered cylinder in a manner that would allow playback by another machine. These tinfoil recordings were extremely fragile, however, and rarely lasted long. Edison abandoned work on the phonograph soon after due to an inability to find investors to improve it further, but Edison’s rival, Alexander Graham Bell, soon commissioned his own recording project at his Volta Laboratories, where by 1881 Charles Tainter and Chichester Bell had created an improved version called the Graphophone and developed a cylinder created out of wax, which could be played over one hundred times before wearing out. In 1886, Bell formed the Volta Graphophone Company to continue developing sound recording technology. By the next year, Bell had enticed a group of Philadelphia businessmen to establish the American Graphophone Company to market and sell the device. In 1888, a businessman named Jesse Lippincott, who had recently purchased both the American Graphophone Company and the Edison Speaking Phonograph Company to consolidate all the important sound recording and playback patents, established the North American Phonograph Company to serve as the exclusive seller of phonographs in North America. He proceeded to divide the country into territories that he assigned to local franchises. The phonograph soon attracted wide interest, but it remained a complicated and expensive piece of technology that remained out of the reach of the working class, making it a perfect candidate for coin-operated control.
The first known coin-operated phonograph was patented in 1888 in Britain by electrical engineer Charles Adams Randall, who called his machine the Automatic Parlophone. The first known coin-operated phonograph in the United States was installed at San Francisco’s Palais Royal Saloon in November 1889 by Louis Glass of the Pacific Phonograph Company — one of Lippincott’s many franchisees — and before long this device joined the testing machines in bars, saloons, and railway terminals across the country, allowing patrons to insert a nickel in a coin slot to hear a song or brief recorded message. While bars and saloons were perfect venues for testers, however, they were less than ideal for phonographs. While coin acceptor technology was improving, too many patrons were still able to “slug” the unsupervised machines by using buttons or washers in place of coins to earn a free play, and they could often be rough on them as well, causing frequent breakdowns. Furthermore, the cylinders needed to be changed out constantly to hold patron interest, while the largest potential audience, women and children, had limited access to the devices because they did not frequent bars. As a result, these early venues for the machines were unsuited to providing the level of care, maintenance, and exposure necessary to maximize the profits from this new form of amusement. The man who ultimately provided the solution to these problems was James Andem, the president of the Ohio Phonograph Company.
Born in Massachusetts in 1842, James Lambert Andem grew up in New York City. After serving in the Union Army during the Civil War and rising to the rank of first lieutenant, Andem entered the stenographer’s trade. Moving to Washington, D.C., Andem was an early adopter of the Volta Graphophone to help with creating transcripts of court and legislative proceedings. When North American Phonograph began dividing the country into sales territories, Andem decided to take Ohio and established the Ohio Phonograph Company in 1888.
In 1890, Andem responded to the inherent problems in operating coin-operated phonographs by opening storefront locations in Cleveland and Cincinnati featuring a dozen phonographs grouped together, allowing an attendant to monitor and maintain the machines and giving patrons a clean, women and children-friendly environment in which they could listen to a series of melodies in rapid succession. Andem opened his Cincinnati location in a building called the Emery Arcade, which may be the origin of the term “arcade” referring to a coin-operated amusement facility, though it is also possible that the use of the term “arcade” in this manner merely evolved because coin-operated businesses became a fixture of the big-city shopping arcades that were a precursor of the modern shopping mall. In Britain, where facilities grouping together various coin-operated amusements became common in the mid 1890s, the venues tended to be referred to as “automatic shops” instead.
The Mutoscope, the prime attraction of the early penny arcade.
By 1893, there were over 100 phonograph parlors located in big cities around the United States, but the start of a depression that year nearly killed the business. In the meantime, however, Edison had hit on another new idea in 1888, a device that could display moving pictures. At the time, stereo scope viewers, in which a person examined a picture through a special eyepiece that made it appear three dimensional, had been popular for some time, and had first incorporated a coin slot two years earlier in 1886. In fact, the same year Edison decided to explore moving pictures, a German named C. Bach introduced a viewer called the Kalloscope that proved one of the most popular, and most imitated, coin machines of the late nineteenth century. In this device, a series of pictures were placed on a chain inside a wooden box, and the user could rotate through the series by turning a knob. By the 1890s, stereo viewers incorporated motors that automated the movement of the pictures. Edison’s idea was the next logical step, in which the pictures cycled so quickly as to give the illusion of seamless, real-time movement.
While the initial idea of a motion picture machine belonged to Edison, building on earlier work by pioneers such as Coleman Sellers and Eadweard Muybridge, the majority of the actual work of creating the device was performed by one of his most talented employees, William Dickson. Born in France in 1860 to Scottish parents, Dickson spent his formative years in Britain. As a teenager, Dickson became fascinated with Edison and his inventions and even wrote him a letter offering his services. Therefore, after his family immigrated to the United States in 1879, Dickson traveled to Edison’s electrical equipment factory in New York City in 1881 and charmed the inventor into giving him a job. Two years later, Dickson had risen to manager of the Electrical Testing Department, and by 1886 he had become a personal research assistant to Edison. By 1892, Dickson had responded to the moving picture challenge by creating the Kinetoscope, a device that allowed a patron to peer through a window on a cabinet to view a series of still photos presented in rapid succession on a strip of perforated celluloid film to give the illusion of movement. In 1893, Edison formed a partnership with a banker named Norman Raff to commercialize the device, who established the Kinetoscope Company as its exclusive North American distributor. Raff also helped organize the first public display of the new technology, which made its debut at the 1893 World’s Fair.
The Holland brothers, two Canadian businessmen who became the East Coast agents for the Kinetoscope Company, opened the first Kinetoscope parlor on April 14, 1894, in New York City with ten machines each showing a different movie. The device proved a smash hit as the parlor averaged $1,400 a week over the course of its first year of operations. The Hollands expanded to other cities, sold international franchises in Europe, and were joined in the market by other entrepreneurs as the coin-op industry revived, but because the earlier phonograph parlors had secured more advantageous locations, the two forms of entertainment soon combined to form one unified arcade industry.
In 1894, Dickson came up with a new motion picture concept in which the photographs were mounted on separate cards attached to a wheel similar to a rolodex that the patron turned with a handcrank, giving him a small measure of control over the speed of the play through and the ability to return to an earlier portion of the show or stop on a specific frame if so desired. Edison appeared disinterested in pursuing this concept, so Dickson contacted another inventor named Herman Casler, a friend who had collaborated with Edison on an electrically powered mining drill. Casler saw potential in the concept and worked with his friend Henry Marvin to create a working model, which they patented as the Mutoscope in November 1894. Dickson, Casler, Marvin, and investor Elias Koopman established the K.M.C.D. Syndicate to exploit the new technology before the end of the year, although Dickson’s involvement was initially kept a secret for legal reasons since he still worked for Edison. In April 1895, however, Edison dismissed his talented assistant after a falling out involving unauthorized consulting work with Grey and Otway Latham, Kinetoscope operators that wanted to build their own motion picture camera. Dickson briefly joined the Lathams’ business, but he disliked working for the brothers and soon focused his attention on K.M.C.D., which morphed into the American Mutoscope Company in October 1895. In 1896, American Mutoscope opened parlors in New York, Washington, Philadelphia, and Baltimore to showcase the new machine with the intent of selling franchises for Mutoscope operation. When no one would meet the company’s asking price, however, it was forced to operate the parlors itself. The Mutoscope proved immediately and immensely popular, however, and the parlors easily paid for themselves within the first year. The Mutoscope remained the backbone of the arcade industry for the next three decades.
The next major breakthrough in arcade operation originated with a Buffalo entrepreneur named Mitchell Mark, who opened his first Kinetoscope parlor in 1894. In 1901, Mark’s arcade took in a record $35,000 for the year due to increased tourism in Buffalo as it hosted the Pan-American Exposition, driving Mark to explore new avenues of maintaining high volume patronage. Mark decided the best way to increase traffic was to lower the cost of using his machines from a nickel to a penny and then relocate to an area with heavy pedestrian traffic to ensure constant turnover. When Mark’s new business model proved successful, he opened a new arcade in uptown New York City that made enough money for him to move into a building on Union Square in 1903, at the time one of the city’s busiest thoroughfares. From this business, Mark created the Automatic Vaudeville Company of roughly thirty-five arcades. As word of Mark’s success spread throughout the country, other operators lowered the price to use their machines as well, and the penny arcade was born.
By the first decade of the twentieth century, the basic parameters of the arcade business for the next quarter century had been established. During this period, the main purpose of the arcade was to present novel experiences rather than games, acting as a sort of mechanical counterpart to the Vaudeville show. Coin-operated scales and mechanical fortune tellers would typically be placed in front of the arcade to attract business along with the latest phonograph recordings and Mutoscope shows. Inside would be additional phonographs and Mutoscopes, strength, grip, and lung testers, shockers, food vending machines dispensing gum, candy, and nuts, card dispensers featuring celebrity pictures, jokes, horoscopes, etc., machines that vended small items such as scented handkerchiefs and perfume, and a player piano for background music. As is always the case with novelties, constant rotation of products was essential to maintain customer appeal, so arcade chains like the Automatic Vaudeville Company quickly grew to dominate the business since they could rotate a group of machines between several locations, and sometimes get away with a second rotation if the machines had been gone from a location long enough to be considered new again. Unable to compete with this rate of turnover, independent operators often turned to racier Mutoscope stories featuring strip shows and other lewd behaviors to attract patrons. Despite this seedy fringe element, however, women and children were the primary patrons of coin-op businesses, and the penny arcade briefly represented the primary source of inexpensive mass-market entertainment in the big cities of the United States.
Herbert Mills (l) and Arthur Caille, founders of the two most important coin-op amusement companies of the early 20th century
The production of arcade amusement equipment began as a cottage industry, with inventors in various towns and cities setting up small manufacturing operations to produce their coin-operated devices. With the rising popularity of the Mutoscope in the late 1890s, the coin-operated amusement industry became a big business and one of the primary forms of entertainment for an immigrant working class clientele that lacked the money to attend the theater or similar attractions. As a result, the manufacture of arcade machines soon consolidated around a few large firms offering a full range of amusement equipment. By the early twentieth century, four companies had emerged as the leading manufacturers of coin-operated amusement equipment: Rosenfield Manufacturing, Watling Manufacturing, Caille Brothers, and the Mills Novelty Company.
Born in California in 1867, William Rosenfield moved back east to his mother’s hometown of New York City with his family as a young boy. Mechanically adept, Rosenfield spent five years designing plumbing fittings before joining with a group of investors to establish the Amusement Machine Company in Jersey City in 1890. The company soon became one of the largest producers of trade stimulators and countertop gambling machines in the country, but by 1896 this business was starting to wane, so the founders decided it was time to cash out. Together with his sister, Bertha, and an investor named Francis Gribbins, Rosenfield raised $10,000 to establish his own maker of toys, tools, and mechanical novelties in September 1896 as the Rosenfield Manufacturing Company. Starting with the same gambling machines he had built at the Amusement Machine Company, by 1900 Rosenfield offered a full line of testers, shockers, peep shows, and vending machines and claimed to be the largest equipment manufacturer in the Eastern United States. The main driver of the company’s business, however, was the Illustrated Song Machine, which Rosenfield himself designed in 1899 and combined a Kinetoscope with a phonograph to provide a soundtrack.
Born in Edinburgh, Scotland, in 1862, Tom Watling came to the United States as a boy and entered the coin-op business as an operator in Cincinnati in 1889 in partnership with his older brother, John. Three years later, the Watlings moved to Chicago to serve as regional sales managers for German-American industrialist Daniel Schall, like Rosenfield an early gambling machine pioneer. In 1901, the Watling brothers incorporated as the Watling Manufacturing Company and purchased D.N. Schall and Company to manufacture their own machines. Watling was active in both trade stimulators and slot machines, but it made its real mark as the leading producer of coin-operated scales, still a popular device in the early twentieth century.
The Caille brothers, Adolph and Arthur, were natives of Detroit, where their father, Joseph, worked as a cabinetmaker. Younger brother Arthur, born in 1867, exhibited great mechanical aptitude from an early age and first made his mark in 1889 by inventing a cash carrier system, a close relative of the cash register in which money was transferred to a cashier’s desk through a wire-based transit system. In 1893, he began designing coin-operated slot machines, and in 1897 he opened the Caille Company in Detroit to produce vending machines, trade stimulators, and slot machines. Older brother Adolph, born in 1863, followed his father into the cabinetmaker’s trade, but also found himself drawn to coin machines. In 1899, he established the Caille-Schiemer Company to produce floor model gambling machines. In July 1901, the brothers combined their business ventures as the Caille Brothers Company, and a full line of testers, shockers, and peep shows soon followed. By 1904, the success of Caille Brothers made it the largest employer in the city of Detroit. Indeed, when Detroit’s automobile industry began growing just a few years later, many of its first employees were poached from the Caille Brothers operation.
The Owl Lifter, the first coin-operated tester produced by the Mills Novelty Company
As important as Rosenfield, Watling, and Caille Brothers were to the development of the U.S. coin-op industry, no company proved more successful than the Mills Novelty Company established by Herbert Mills in Chicago, a city which, thanks in large part to the success of Mills, soon became the center of the industry. Herbert’s father, Mortimer, was born in Canada in 1838, but on a trip to De Witt, Iowa, to visit an uncle he met American Kate Fuller and married the sixteen-year-old in 1866. The couple remained in De Witt until 1878, when they moved to Chicago. A prolific inventor, Mortimer claimed to have over 400 patents in his name, the most profitable of which was a gate for railway crossings he developed in 1884. In 1891, Mortimer patented a coin-operated cigar vending machine and soon after entered the coin-op industry by establishing the M.B.M. Cigar Vending Machine Company.
Mortimer fathered thirteen children with Kate, but none were more successful than Herbert, who was born in De Witt in 1870. Industrious from a young age, Herbert took employment as a “news butcher” — a person who sold newspapers and snacks on trains — at fifteen, and in 1893 he ran a peanut concession at the Chicago World’s Fair. Herbert initially entered the coin-op industry as an operator of vending machines before Mortimer signed over the M.B.M. Cigar Vending Machine Company to him in June 1897, which Herbert renamed the Mills Novelty Company.
At the time of the sale, Mortimer had been working on a new all mechanical floor model slot machine he hoped would revolutionize the business. Released by Mills in late 1897 as the Mills Owl, the machine became an unprecedented success that sold tens of thousands of units, bringing the new company instant success. In 1899, Mills moved into coin-operated amusements with the release of the Owl Lifter, a popular strength tester. Through a combination of internal development (often performed by Mortimer) and buyouts of manufacturing rights from other inventors, Mills soon offered a full line of coin-operated amusements backed by aggressive advertising and heavy investment in penny arcades to become the principle driver of the industry in the first years of the twentieth century. In 1904, Mills ran a large penny arcade at the St. Louis World’s Fair, demonstrating both the power of the company and the triumph of the industry it led. The success of that industry ultimately proved short-lived, however.
While vending and novelty machines both had their place in the early penny arcade, the backbone of the operation remained the phonographs, Kinetoscopes, and Mutoscopes that enticed patrons with sights and sounds they could experience nowhere else. By 1905, however, the introduction of cheap spring motors had finally put the phonograph within the reach of working class families, while the rise of the Nickelodeon cinema provided a new way to watch films, which could now be projected on a screen for a more impressive — and cost effective — viewing experience. At first, arcades tried to co-opt the new motion picture business by installing movie projectors in lofts above their main business areas, but by 1907 the movie theater operators had established themselves as a completely separate enterprise, and arcades were no longer the principle venue for audiovisual entertainment. The focus of arcades therefore shifted to racy peep shows that could not be found in the more respectable motion picture houses, but these shows did not bring in enough patrons to maintain high rent locations. Soon relegated to poorer areas, the surviving penny arcades quickly gained a reputation for being dirty, poorly maintained, dimly lit, and lacking in adequate ventilation. As the coin-operated amusement industry began to decline, however, a new coin-operated industry began to emerge around games of chance.