Coin-Op History

Historical Interlude: The History of Coin-op Part 6, A Technological Revolution

By 1965, the coin-operated amusement industry was running out of steam.  In 1954, the United States Census Bureau estimated the average revenue generated by amusement machines on location in the United States at $722 per machine.  By 1963, the Census Bureau estimated that the average revenue per machine had fallen to $639 despite nearly a decade of inflation and the widespread adoption of dime play.  No major new product categories had emerged since the spread of shuffle alleys, bumper pool, Dale guns, and two-player pinball in the mid-1950s, while the combination of dwindling markets and consolidation had whittled down the number of manufacturers in Chicago to just five.  Furthermore, the inability of operators to recoup the cost of newer machines set to dime play and the resistance of the general public to a higher cost per play had forced the manufacturers to often sell their machines at a loss, resulting in drastic cutbacks to R&D.  While Midway continued to explore avenues to enhancing its novelty pieces and Williams continued to innovate in pinball, most new machines coming out of Chicago were basically identical to the machines that had come out the year before save maybe a small new gameplay feature or a new theme in the cabinet art or backglass.  An increasing interest in pinball in Europe, particularly after France legalized the game in 1961, helped sustain sales for the surviving manufacturers, but without new game concepts, the long-term future of the industry began to look grim.

But once again coin-operated amusements did not die.  Across the Pacific, a newly resurgent Japan, riding the wave of an economic miracle, discovered coin-operated amusements and fell instantly in love.  At first merely importers of American products, in the mid 1960s local firms slowly turned to designing their own machines.  Bigger, flashier, and more expensive than the arcade pieces coming out of Chicago, the leading Japanese cabinets inspired a wave of technological innovation in the coin-operated games industry that breathed new life into the moribund American manufacturers.  And in this rejuvenated arcade climate, in which distributors and operators were newly aware of the potential of advanced displays, unique control schemes, and sophisticated sound, the commercial video game was born.

This is the final post in a six-part series briefly chronicling the coin-operated amusement business from its origins in 1870 to just before the introduction of the first coin-operated video game.  Principle sources for this post include The Ultimate History of Video Games by Steven Kent, Winning Pachinko: The Game of Japanese Pinball by Eric Sedensky, Arcade Mania: The Turbo-Charged World of Japan’s Game Centers by Brian Ashcraft, the dissertation Game Centers: A Historical and Cultural Analysis of Japan’s Video Amusement Establishments by Eric Eickhorst, the article “Entertainment Empire of the Rising Sun: A Conversation With Sega Founder David Rosen” by Steven Kent, the article “Firm Seeks Right Button for a 2d Space Invaders” in the November 29, 1981, edition of the Chicago Tribune, the article “Lots O’Fun” in the January 15-22, 1982, issue of Event, numerous articles in Billboard Magazine, the court case Bromley v. Commissioner, 23 T.C.M. 1936 (1964), Report No. 92-418 of the United States Senate, “Fraud and Corruption in Management of Military Club Systems” (1971), a series of Twitter posts from the official account of Taito detailing the early history of the company, an obituary for Michael Kogan printed in the March 1984 issue of Replay Magazine, an interview with Masaya Nakamura in the January 1977 issue of Play Meter magazine, the article “Pac-Man creator bites into County Hall” in the August 31, 1997, edition of the Sunday Times, the 1985 article “Namco: Maker of the Video Age” in the Journal of Japanese Trade & Industry, interviews with several Kasco employees translated under the title “Kasco and the Electro-Mechanical Golden Age” and hosted at shmuplations.com, and the blog All In Color For a Quarter maintained by Keith Smith.

The Birth of Coin-Op in Japan

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The Masamura ALL-15, which helped revolutionize pachinko

The emergence of a coin-operated industry in Japan was a slow process complicated by the depletion of Japanese industry as a result of World War II. Before the war, Japan had just begun taking its first steps in the field through a unique game called pachinko. Like pinball, pachinko evolved out of bagatelle, which first reached Japan around 1924, perhaps through a child’s toy version of the game imported from the United States called the Corinth Game. The game soon became common in candy stores across Japan, with children able to win candy or pieces of fruit for high scores, and gained the name “Pachi-Pachi” after the onomatopoeia describing the clicking of small objects such as the balls in the game.   Before long, the game spread to markets as well, where adults would play for the chance to win prizes such as soap or cigarettes. The narrow tents and stalls in Japanese markets were not well suited to bagatelle tables, so by 1926 operators were introducing vertically oriented cabinets to reduce their footprint, perhaps taking inspiration from the allwin games popular in Europe.  These gambling devices, pioneered in 1900 in Germany with the Heureka, call on the player to press a lever to launch a small ball onto a circular track in the hopes that it will land in a scoring hole so he may win a prize.  The vertical orientation, spring-loaded lever, and circular track of the allwin were all features incorporated into the modified bagatelle game the Japanese were now calling pachinko, a combination of the aforementioned “pachi” and “ko,” the Japanese word for ball. As the new game grew in popularity, Japan’s first dedicated pachinko parlor opened in Nagoya in 1930, but just as the game appeared ready to hit a rapid growth phase, the government halted production of all machines in 1937 due to Japan’s need for resources to support its war with China. In 1938, the government went a step further and ordered the closure of all the pachinko parlors in the nation. They would remain closed for the duration of what quickly spiraled into World War II.

In 1946, pachinko returned to Nagoya and from there began spreading across the country once more, but the game did not really take off until a series of important innovations by Shoichi Masamura. Like the earliest pinball games, pachinko before and immediately after World War II was a relatively static game in which the player launched a ball that moved through a nest of pins and perhaps entered a scoring hole.  In 1948, Masamura introduced spinners and additional pins on his machines to create a layout known as the “Positive Gage Forest,” allowing balls to bounce around the playfield and creating additional opportunities for them to land in a scoring hole. In the mid 1930s, pachinko manufacturers had developed a form of score keeping in which the machine would automatically eject a ball whenever the player successfully scored, which could be exchanged for a prize. In 1949, Masamura took this concept a step further with the introduction of the ALL-10, which paid out ten balls instead of one.  The next year, he upped the total to fifteen in his ALL-15 machine to establish a standard that lasted for three decades.

The impact of pachinko on post-war Japan was unlike any coin-operated machine phenomenon the world had seen to that point.  By playing the game, Japanese citizens were able to win everything from soap to vegetables to cigarettes, all of which were in incredibly short supply after World War II.  Therefore, the number of pachinko parlors in the country expanded rapidly to a peak of 70,000 in 1953 housing over two million machines taking in over $42 million per month, more than all the department stores in Japan combined.  After the government began regulating the industry more closely in 1954, the number of parlors dropped rapidly to a low of 8,000 housing half a million machines in 1956.  The introduction of lighting and electrically powered “tulip” scoring pockets in 1960 helped revive interest in the game again, which continued to grow steadily in popularity over the next two decades.

While profitable in the early 1950s, the pachinko industry had more in common with America’s coin-operated gambling business than with its amusement business and did not represent a wider adoption of coin-operated equipment in Japan. Before World War II coin-operated amusements were just beginning to penetrate the country in the early 1930s as the first dedicated game centers began to appear.  The pioneer in this field was Kaichi Endo, a purveyor of automatic signs, vending machines, and rocking horses.  In 1931, Endo approached the Matsuya department store in Asakusa with a plan to create an amusement venue on the roof of the store combining activities like roller skating, archery, and cycling, with equipment like rocking horses, coin-operated testers, and peep shows.  Endo dubbed his new entertainment venue “Sports Land.”  Sports Land proved successful, and before long most of Japan’s major department stores incorporated rooftop amusement spaces into their business.

World War II signaled the end of Japan’s first coin-operated amusement industry.  While a small number of refurbished arcade machines entered the local economy in the late 1940s and early 1950s, the Japanese people were still desperately trying to recover from the complete devastation of the War and had neither the free time nor the disposable income to engage in most leisure activities. At the same time, however, the United States military began significantly increasing its presence in the country due to the outbreak of hostilities in Korea. This attracted several businessmen interested in providing entertainment for the American servicemen in the country, including influential American distributor Irving Bromberg.

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Marty Bromley (l) and Irving Bromberg, who built a vast coin-op empire under the name Service Games

Born in 1899 to Russian Jewish immigrants like so many of the early pinball magnates, Bromberg worked as a glass salesman as a young man and then served as president of the Greenpoint Motor Car Corp. in Brooklyn from 1923 to 1930 before leaving to establish a vending machine distributor called the Irving Bromberg Company.  When Leo Berman decided to sell the early pingame Bingo nationally, he traveled to New York to interest Bromberg in selling the game in the city.  At the time, Bromberg had no storefront of his own, so he contacted his friend Hymie Budin, who sold items for vending machines, and got permission to display Bingo in his storefront.  After some initial difficulty generating interest in the game, Bromberg caught the attention of Bill Shorke, one of the last great penny arcade moguls from the turn of the century, and sales took off.  In 1932, Bromberg became a distributor for Bally pins, which helped him grow to become one of the largest distributors on the East Coast and open branch offices in New York City, Boston, and Washington, D.C.  Around March 1933, Bromberg moved to Los Angeles to become the first Bally distributor on the West Coast, and he must have enjoyed his new home, because in July he sold his New York and Brooklyn offices (and probably his Boston and Washington operations as well) to focus on the Los Angeles market.  He retained ties with New York, however, which became vitally important when Harry Williams developed Contact.  Bromberg provided the first national distribution for the game by shipping tables into the New York area, thus playing a critical role in the spread of this highly influential pin game.  Bromberg continued to run his company in Los Angeles until he sold out to another distributor in 1946, possibly because he was becoming more involved in a new venture set up in partnership with his son, Marty.

Martin Jerome Bromberg was born in 1919 and operated his first coin-op machines while still a student before entering the family business after graduating high school.  In 1940, Marty, who later changed his last name to Bromley, expanded the business by forming a partnership called Standard Games in Honolulu, Hawaii, with his father and friends Glen Hensen and James Humpert to operate slot machines and other coin-operated equipment on American military bases in the territory. Inducted into the Navy after the outbreak of World War II, Bromley worked at a Pearl Harbor shipyard so he could be placed on the inactive duty list and continue to run the Standard Games operation through the end of the war. In 1945, Bromley and Bromberg sold off Standard Games, after which they joined with Humpert to establish a new company in Honolulu to continue their coin-op business called Service Games.

In 1951, Service Games faced a serious threat to its business activities with the passage of the Johnson Act, which not only limited the sale of coin-operated gambling devices, but also banned their operation on military bases within the United States.   Stuck with a stock of suddenly worthless slot machines, Bromberg and Bromley decided to send a company salesman named Richard Stewart and a company mechanic named Raymond Lemaire to Japan to establish a company that would buy the equipment from Service Games and operate it at American military bases in the country, which were not subject to the ban. The duo established a partnership called Lemaire & Stewart for this purpose in May 1952. When this business proved successful, Stewart, Lemaire, Bromley, Bromberg, and Humpert formed a new Service Games company in September 1953 as a Panamanian Corporation with Irving Bromberg as president and Dick Stewart as general manager with the sole purpose of purchasing coin-operated equipment from Chicago firms like Gottlieb, Bally, and United and shipping it to Lemaire and Stewart’s partnership, now incorporated as Japan Service Games, so they could operate the machines in the officers’ clubs and open messes of U.S. military bases not just in Japan, but also in Korea, the Philippines, and Guam.  The original Service Games in Hawaii also remained a going concern until the Brombergs sold it in 1961.

In 1953, a second company followed Service Games into the Far Eastern military base market, the Cosdel Amusement Machine Company founded by a former U.S. Navy pilot named Kenneth Cole who chose to settle in Japan after the War, which became a distributor of coin-operated amusements and Wurlitzer jukeboxes to bases not only in Japan, but also in Okinawa, Korea, Taiwan, and Hong Kong before ultimately shifting its focus to the record business.  As companies like Service Games and Cosdel brought an increasing amount of coin-operated equipment into Asia, a new Japanese coin-operated industry began to take hold as machines originally intended for U.S. military bases began migrating into the local economy through the work of entrepreneurs like Russian businessman Mike Kogan.

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Mike Kogan, the founder of the Taito Trading Company

Born into a Jewish family in Odessa, Ukraine, in January 1920, Michael Kogan fled with the rest of his family to Harbin, Manchuria, soon after to escape the Russian Civil War. When Japan occupied the region in 1931, Kogan and other Jewish refugees endured anti-Semitism from Japanese soldiers, but they were also afforded unique opportunities after a small group of military leaders led by Norihiro Yasue bought into anti-Semitic conspiracy literature describing Jewish control of world finance and media and believed Japan should harness the expertise of Jewish refugees in Manchuria to further develop Japan. While Yasue ultimately never realized his so-called Fugu Plan, the brief pro-Jewish sentiment his ideas generated gave Kogan the opportunity to study economics at the prestigious Waseda University beginning in 1939. The outbreak of World War II stranded Kogan in Japan, but in 1944 he was finally able to get out of the country and join his father in Shanghai. Once there, he founded a trading company that operated under the name Taitung –which translates to “Far East” in English and “Taito” in Japanese — specializing in floor coverings, hog bristles, and natural hair wigs.  Kogan relocated to Tianjin in 1946, and then to Tokyo in 1950 after the communist takeover of China.  Kogan was forced to liquidate his business in the move, but he established a new trading company in 1950 called Taito Yoko, which incorporated as the Taito Trading Company in 1953.  At Taito, Kogan distilled the first vodka ever produced in Japan and took his first steps into the coin-op industry by importing and distributing a popular line of peanut vending machines and a less successful line of perfume machines.

In 1954, Kogan led Taito into the jukebox business. Unable to secure a license to import machines from the United States because they were classified as luxury items by the Ministry of Industry and Trade, Kogan instead turned to U.S. military bases to purchase broken-down used machines and salvaged parts from three or four of them at a time to cobble together working units.   The jukebox business was not very lucrative at first, but once Taito began mixing in traditional Japanese records with American popular music sales began to climb until there were over 1,500 jukeboxes on location in Japan by 1960. In 1956, Taito even developed the first jukebox designed and built entirely in Japan, but quickly abandoned plans for production of the model when Kogan discovered that relatively muted demand made it more economical to continue purchasing American machines. As the Japanese economy improved, Taito finally secured a deal to become the official Japanese distributor of AMI jukeboxes in 1958, ending its reliance on refurbished machines. A deal with Seeburg to become the exclusive Japanese agent for the company in 1962 further solidified its position as one of the top jukebox companies in the nation.

At the same time Taito began exposing Japan to the jukebox, an American named David Rosen began laying the groundwork for a new company that would finally bring a full-fledged coin-operated amusement industry to the country. A Korean War veteran, Rosen’s tour of duty with the United States Air Force from 1949 to 1952 took him across Asia from Shanghai to Okinawa, but he spent the majority of his service in Japan. Rosen quickly fell in love with the country and also realized there was great economic opportunity in the nation despite the complete economic collapse brought on by the war because the inhabitants were too industrious to stay down for long. As a result, Rosen took advantage of a developing trade in portrait painting by establishing a business called Rosen Enterprises in 1951 that arranged for photos in the United States to be sent to Japan to be made into portraits. Upon leaving the Air Force, Rosen returned home to New York with the intention of finishing his degree while furthering the interests of his portrait business in his native country.  The business proved unsuccessful, however, so Rosen dropped out of school and returned to Japan in 1954 to transform Rosen Enterprises into a trading company that exported products like paintings, sculptures, and woodcrafts and manufactured small items like cigarette lighters and money clips for the domestic market.

At the time Rosen returned to Japan, the country was still recovering from the devastation of World War II, and every citizen required an ID card for rice rations, railway passes, school applications, and employment. Therefore, there was a brisk trade in photographs for ID cards, which usually cost 250 yen and took 2-3 days to develop. Rosen realized that he could import photomat booths from the United States that were not only cheaper, but also developed the film nearly instantaneously. After testing the photomats, however, Rosen realized that modifications would have to be made because the photos would fade within two years due to inadequate temperature controls, making them useless for official IDs. To solve this problem, Rosen modified the photomats so that a person inside the booth actually developed the film and monitored the temperature, allowing for the creation of photos that would last four to five years. Importing his first booths in early 1954, Rosen soon had a massive hit on his hands as people began waiting in line for over an hour to pay 150 yen to have a picture taken that would be developed within two minutes. Before long, Rosen’s booths, marketed under the Photorama brand name, could be found in over one hundred locations around the country. Rosen’s success soon caused a small international incident as traditional photo studios began staging protests over unfair American business practices, leading him to establish a franchise system. Rosen licensed his technology and supplied film to a group of franchisees that opened another hundred locations, but opening up his system also led to competition from other businesses that began deeply cutting into Rosen’s profits. Therefore, while Rosen kept his Photorama business going into the early 1960s, he began looking for new avenues to expand.

By 1956, the Japanese economy was showing signs of revival, and for the first time since the War Japanese citizens were beginning to have both leisure time and disposable income.   Rosen therefore decided to enter the business of what the Japanese Ministry of International Trade and Industry called luxury goods, which required an import license that until recently had been nearly impossible to acquire. Rejecting the currently popular entertainments of pachinko, dance studios, bars, and cabarets, Rosen decided to focus on coin-op games and negotiated a license to bring in $100,000 worth of merchandise and then acquired older games at a relatively cheap price from distributors in the United States who had accepted the games as trade-ins for newer product and then just piled them in warehouses with no idea what to do with them. Rosen concentrated on gun games like Seeburg’s Coon Hunt and Shoot the Bear because owning a firearm was illegal in Japan and these games gave the public an outlet for target shooting.  Rosen leveraged good relations forged during his Photorama days with the Toho and Shochiku movie theater chains to place “gun corners” in their establishments. The success Rosen experienced with these first locations allowed him to negotiate a new license for another $200,000 worth of equipment the next year, setting the stage for massive growth in the Japanese coin-operated amusement sector.

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Dave Rosen, the father of the Japanese coin-operated amusement business

By 1960, Rosen Enterprises had established at least one movie theater arcade in every major city in Japan, but it was Taito that ultimately took the lead in the new industry, opening Japan’s first large game center near Ureoku Station in Osaka in 1960, which contained over forty shooting games and pinball tables, and becoming the Japanese distributor for Gottlieb pinball machines in 1963.  David Rosen, meanwhile, continued to look for other avenues through which to expand his business.  A purchased indoor computer golf game failed because the Japanese considered golf an outdoor game, while a slot car business created only a brief fad, but Rosen experienced another success when he decided to establish a bowling alley in Japan. By this point, bowling had been popular in the United States for just over a decade and had reached American military bases in Japan by 1952, but the game had never penetrated the local economy save for a single location in Tokyo that catered to American servicemen.  To change this, Rosen decided to place his alley in the Shinjuku district of Tokyo, a popular entertainment area that would guarantee high turnover, and secured space for fourteen lanes in this crowded area by approaching the president of one of the movie theater chains with which he already did business and reaching an agreement to place the alley over one of his movie theaters. Rosen’s alley ended up setting business records as the Japanese embraced bowling as a pastime.

As Rosen’s alley began to take off, the two largest U.S. bowling firms, AMF and Brunswick, partnered with Japanese firms C. Itoh and Mitsui respectively in 1961 and ultimately captured over two-thirds of the domestic bowling business between them.  Consequently, bowling alley operation never became an important component of the Rosen Enterprises business.  Bowling alleys did, however, become a prime venue for arcade games, so as the number of locations in the country grew into the hundreds and then into the thousands, coin-operated amusements became ubiquitous across the nation. A retail boom in the late 1960s contributed further growth to the industry.  As the number of shopping malls, department stores, and supermarkets exploded in the latter half of the decade, they often agreed to host game centers adjacent to their retail spaces or in their rooftop gardens, giving the games even greater exposure.

With demand for arcade games high by the middle of the 1960s, Japanese coin-op firms turned to building their own products for the first time.  Taito once again led the way by establishing a new subsidiary called Pacific Amusements Limited in 1963. Pioneering efforts by the company in the years following the establishment of Pacific included an early pachisuro machine, a type of slot machine derived from pachinko, to coincide with the 1964 Tokyo Olympics, and Japan’s first crane machine, the Crown 602, which became an instant hit when deployed in 1965 and inaugurated a product category that has been popular in Japanese game centers ever since. Before long, dozens of small companies were following Taito’s lead by setting up their own manufacturing operations.

The Service Games Complex

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The board of directors of Sega Enterprises, Ltd. Dick Stewart is seated at the head of the table.  Immediately to his left is David Rosen, and next to him is Ray Lemaire.

While Taito and Rosen Enterprises focused on the Japanese market, Marty Bromley and Irving Bromberg took steps to turn the country’s other large coin-operated amusement provider, Service Games, into an international coin-op empire.  Since 1952, the father and son duo had been funneling amusement equipment into the Far East from Panama-based Service Games to Service Games of Japan.  Now, they prepared to reverse this process by bringing equipment produced in Japan to the rest of the world.  In 1956, a new wholly-owned subsidiary of Service Games was organized in Panama called Club Specialty Overseas, Inc. (CSOI) to serve as a financial clearinghouse for the global operation and to serve as the middle man between Service Games manufacturing and distribution operations.  Then, in 1957, Service Games Nevada was incorporated to give the company a presence in the U.S. market and to serve as a final assembly point for slot machines to circumvent a law requiring that machines bought by the government had to be American made.  The same year, the company bought a never-before-used Mills tooling set from Bell-O-Matic — for whom it already served as an official distributor in the Far East — and began manufacturing replacement parts and modified Mills designs in Japan.  These machines were then funneled through Service Games Nevada and CSOI to Service Games Japan and Service Games Korea in the Far East and another Bromley distributor called Firm Westlee in West Germany for distribution to American military bases.  Service Games marketed both its Mills-produced slots and the machines it manufactured itself under the brand name Sega, a contraction of the company name.

As the Service Games complex expanded its operations, it soon attracted intense scrutiny from both the U.S. and Japanese governments.  Starting in 1954, the company continually faced accusations of smuggling, fraud, bribery, tax evasion, coercion, and intimidation in its quest to become the largest supplier of coin-operated equipment to the United States Armed Forces around the world.  The charges rarely stuck, but there were consequences.  In 1959, the Navy banned Service Games from all its bases in Japan, followed by a complete ban in the Philippines the next year.  In 1961, the U.S. Civil Administration of Okinawa fined Service Games for smuggling, fraud, bribery, and tax evasion.  In 1963, the Air Force banned Service Games from all its bases worldwide.

Perhaps due to so many government investigations tarnishing the Service Games name, Bromley reorganized his web of businesses in the early 1960s.  First, on May 31, 1960, Service Games Japan was terminated and two new companies were formed to replace it.  Nihon Goraku Bussan KK, literally Japanese Amusement Products Company, Inc., which also did business as Utamatic Inc., was led by Dick Stewart and managed the Service Games operating business in Japan, while Nihon Kikai Seizo KK, literally Japanese Machine Manufacturers Company, Inc., which also did business as Sega Inc., continued the Service Games manufacturing operation under Ray Lemaire.  The same year, Firm Westlee changed its name to Standard Equipment & Service, while Service Games Korea became Establishment Garlan.  Finally, in 1962 Service Games Panama was dissolved and superseded by CSOI, which became the new heart of the Service Games complex and expanded aggressively into Southeast Asia and England to complement its business in Japan, Korea, Taiwan, and West Germany.  Controversy continued to plague the company, however, culminating in a Congressional investigation in 1971 focused on activities in South Vietnam, where Service Games had cornered the coin-operated machine market in the late 1960s through an intermediary named William Crum and his company Sarl Electronics, allegedly helped by widespread bribery of military personnel.

In Japan, Nihon Goraku Bussan and Nihon Kikai Seizo played a key role in the growth of the local coin-operated machine industry.  Like Taito, Nihon Goraku Bussan became a major supplier of machines for the domestic market, with a particular focus on jukeboxes.  Though it did not run its own arcades, the company imported Rockola jukeboxes and amusements manufactured by Bally and Williams, while also distributing Sega machines produced by its sister company, Nihon Kikai Seizo, which now offered a diverse range of slot machines.  In 1960, Nihon Goraku Bussan developed the first Japanese-designed jukebox to actually enter production, the Sega 1000, which was manufactured by Nihon Kikai Seizo.  As both companies continued to flourish, they became one company again in June 1964 when Nihon Goraku Bussan absorbed Nihon Kikai Seizo.  By 1965, Nihon Goraku Bussan had placed over 3,000 jukeboxes on location and opened branch offices all over Japan.

As Nihon Goraku Bussan and Taito grew in size and scope, a wave of new companies entered the market, and rival firms captured the new bowling business, David Rosen watched as his prime position in the Japanese arcade industry began to dissipate. His rivalry with Japan’s other two large coin-op enterpries always remained friendly, however, so in 1964 he proposed a merger with Nihon Goraku Bussan to create a company that could remain atop the increasingly competitive Japanese coin-op industry.  On July 1, 1965, Nihon Goraku Bussan acquired Rosen Enterprises and changed its name Sega Enterprises, Ltd.  Rosen became the CEO and managing director of the company, while Dick Stewart became president, and Ray Lemaire took the title director of production and planning. Under Rosen, the combined company began phasing out slot machine production and equipment sales and leasing to military bases so that it could focus on a new primary objective: becoming the top coin-operated amusement company in Japan to facilitate becoming a publicly traded corporation.

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Periscope, Sega’s first international hit, adapted from a similar game created by the Nakamura Manufacturing Company

By the time, Rosen instigated the creation of Sega, he had long since moved from importing used games to bringing the latest products over to Japan, but was growing increasingly frustrated with the stagnation taking hold in Chicago.  He therefore decided to take advantage of the Service Games jukebox and slot machine factory to follow the lead of Taito by manufacturing his own product.  Rosen sensed he could find a niche for Sega in the mid-range novelty market, which had virtually disappeared in the United States.  In 1967, Sega became the first foreign manufacturer to join the MOA and completed a deal with Williams to introduce its games in the West.  Rosen’s plans changed, however, thanks to an impressive new game from one of his competitors, the Nakamura Manufacturing Company.

Born in 1925 in the Kanda District of Tokyo, Masaya Nakamura was the son of a handcrafted shotgun manufacturer who’s business was destroyed in World War II.  The elder Nakamura salvaged what he could from the rubble and opened a gun repair shop in the same Matsuya Department store that had once housed the first Japanese game center on its roof.  Meanwhile, Masaya attended Yokohama State University, but could not find a job in the depressed Japanese economy after graduating with a degree in shipbuilding in 1948.  He therefore worked in his father’s store performing a variety of odd jobs from sweeping the floors to bicycling around the city to hang advertising posters of his own design.  Over time, the Nakamuras transitioned from repairing old rifles to selling brand new air guns, but looming new restrictions on gun ownership and shooting soon threatened the business.  The inventive Nakamura decided to modify the guns into children’s pop guns, which brought the family into the toy business.

With the family’s new focus on toys, Masaya Nakamura soon turned his attention to other forms of children’s entertainment. In the 1950s, rooftop amusement spaces were making a comeback in Japan, but despite being the site of the very first before the war, Matsuya still did not have one. Nakamura therefore purchased two crank-operated mechanical horse rides and received permission to place them in the rooftop garden of the store. Seeing the potential for a new industry, he subsequently established the Nakamura Manufacturing Company in 1955 with just two employees and roughly $1,200 in financing to produce mechanical horse rides for amusement spaces.

Operating rides was initially a side business for Nakamura Manufacturing, but in 1963 Nakamura accepted a contract to build a rooftop amusement park for the flagship location of Japan’s premiere department store chain, Mitsukoshi, located in the Nihonbashi District of Tokyo.  In addition to horse rides, Nakamura added a 3D sound and picture viewing machine, a pond out of which children could scoop goldfish, and an elaborate amusement machine called the “Roadway Ride.”  Based on the success of this venue, Mitsukoshi decided to add rooftop amusement parks to all its locations, and Nakamura was soon operating ten facilities across Japan.

By 1966, Nakamura had emerged as one of Japan’s premiere operators of coin-operated amusements, but faced new challenges in a changing market.  As the Japanese industry rapidly expanded, manufacturers proved unable to keep up with increasing demand, while larger companies like Taito and Sega that served as both operators and manufacturers were beginning to invade Nakamura’s traditional stronghold of department store play areas.  Nakamura responded by opening a new factory that year in the Ota-ku district of Tokyo and secured a license from the Walt Disney Company to use its characters on his projects.  Initially, the factory just produced kiddie rides, many of which were modeled on Walt Disney characters, but Nakamura soon turned his attention to more elaborate coin-operated amusements beginning with a game called Periscope.

A target shooting game, Periscope broke new ground in the genre with a gigantic cabinet featuring a plexiglass ocean and plastic ships on a motorized carriage, great electronic sound effects, and an innovative control scheme in which up to three players peered through actual periscopes to target and destroy the ships with torpedoes represented by points of light that traveled across the fake waters.  A far more expensive game than the typical $695 machine of the time, Periscope proved a hard sell at first, but the game soon became a hit when arcade operators realized that it could bring in sustained earnings far in excess of most coin-operated games.

When Dave Rosen at Sega noticed the game began drawing attention from distributors in the United States and Europe, he decided to manufacture a version of Periscope for foreign markets.  After showing the game at conventions in the United States in Europe in late 1967, however, he quickly realized that it was too large and expensive for export, so he had a single-player unit designed. Still coming in at roughly $1295 when the typical arcade piece would sell for half that amount, however, distributors complained that no one would be able to make money on the game. Sega responded by advising them to sell it on quarter play. Released internationally in March 1968, Periscope revolutionized the coin-op industry as the public proved willing to embrace quarter play for such a sophisticated entertainment experience. Too large even in its smaller form for typical street locations, Periscope nevertheless found a home in retail establishments like department stores and shopping malls that would never typically host coin-operated amusements.

With revenues increasing rapidly at Sega thanks to Periscope and the continued growth of the jukebox business — in which Sega had captured just under half of the market with 5,000 machines on location by 1967 — Rosen’s dream of going public suddenly appeared feasible. The company retained an underwriter to begin work on an initial public offering, but ultimately decided the hurdles would be too great. Not only would Sega have been the first American company to go public in Japan since World War II, but it would have also been the first coin-operated amusement company to ever go public in the nation. Rosen and his partners therefore began a search for a Western company that could help take Sega public in the United States and ended up selling to Gulf & Western in 1969, where CEO Charles Bludhorn was on a massive acquisition spree that made the company one of the largest conglomerates in the world. Between June 1969 and January 1970, Gulf & Western purchased 80% of the stock of Sega Enterprises — the entire company save Ray Lemaire’s 20% stake — for a total price of $9,977,043.  Bromley and Stewart ended their direct involvement with the company at that point, while Rosen became chairman and CEO of Sega.

Realistic Games

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Chicago Coin’s Speedway, perhaps the biggest coin-op amusement hit of the 1960s.

With Periscope proving a major hit despite its technical complexity and high price per play, the game spearheaded a revival of the moribund novelty game manufacturing business through a new category labelled “realistic games” in the trade press that incorporated advanced special effects to provide a closer simulation of the real world than previous arcade pieces.  For example, Dale gun games began incorporating electronic sound effects to provide more realistic gunshots and explosions, while Sega produced an elaborate flight game in which the player controls a helicopter spinning on a metal arm attached to a plastic mountain that incorporates an 8-track player to provide the sound of the engine and rotor, which actually changes tempo to match the speed of the helicopter.  The most important of the realistic games, however, were a new wave of driving games spearheaded by a Japanese manufacturer called Kasco.

Established in 1955 by engineer Kenzou Furukawa under the name Kansei Seiki
Seisakusho and incorporated three years later, Kasco’s first product was a magic lantern device called the “Stereo Talkie” intended to help guide shoppers around the stores of the Hankyu Department chain. As rooftop amusement spaces became popular in Japan, Furukawa repurposed the Stereo Talkie as a picture viewer amusement device called the “Viewbox” that displayed images from Japanese folktales and small comic strips, often accompanied by music. Like Nakamura Manufacturing, Kasco began installing and maintaining kiddie rides in rooftop gardens and transitioned into importing, operating, and manufacturing other types of coin-operated amusements such as a new driving game that would transform what had largely been a niche game type into the arcade’s premiere attraction.

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Drive Mobile (1941), the first popular coin-operated driving game in the United States

The first coin-operated driving games — like so many of the early coin-op technologies — were developed in Britain.  The earliest known patent for such a game was filed in 1928 by Algernon Evans, though it appears this game was never built.  In 1931, another British inventor named Mark Myers patented a game called Road Test that featured a model car set atop a metal drum with a road painted on it that would constantly shift to the left and right as it rotated.  The player had to use an actual steering wheel to keep the car centered on the road.  In 1941, International Mutoscope introduced the driving game to the United States with a similar concept called Drive Mobile that added a lighted backglass to keep track of the player’s progress across a map of the United States, with the player scoring more points the longer he is able to remain on the road.  The concept proved popular, so Mutoscope released a two-player version called Cross Country Race in 1948 and a deluxe version with a sit-down cabinet, Drive Yourself, in 1954.  Driving games became one of the staples of the 1950s and 1960s fun spot, with most either using the rotating drum method or slot cars like those found in a toy racing set.  They were generally overshadowed by other arcade pieces, however, and few models were designed.

In 1969, Kasco introduced a new driving game called Indy 500. The game’s elaborate
cabinet featured a circular racetrack and several cars painted on individual rotating discs that were illuminated by a lamp, providing striking, colorful graphics and allowing the game to detect collisions between the vehicles. The player therefore not only had to keep his car on the track, but he also had to avoid the other cars to avoid a crash that brought his vehicle to a halt.  Electronic sound provided both the steady hum of the car engines and the sounds of impact.  Far more realistic and exhilarating than any driving game released before, it became a smash hit in Japan with sales of over 2,000 units.

With Indy 500 proving so successful, Kasco licensed the design to leading novelty game producer Chicago Coin for release in the United States.  Dubbed Speedway, the game became the biggest smash hit the industry had seen in years, selling over 10,000 units.  The game also played a critical role in the growth of quarter play:  Chicago Coin wanted to set the machine to one play per quarter just like Sega’s Periscope, but operators initially balked and asked for two plays per quarter.  Chicago Coin therefore tested the game both ways and discovered both models received roughly equal play, which meant the quarter play machine took in twice the money since a single coin bought half the playtime.  Speedway consequently shipped with one play per quarter, cementing a new price point that would persist for over twenty years.

In 1969, Sega scored another major hit in the U.S. with Missile.  Continuing to push state of the art graphical effects, the game features a rotating filmstrip displaying silhouettes of jet planes that is projected onto the back of the cabinet to create the illusion that waves of bombers are flying towards the player.  As the planes move across the cabinet, a wiper blade travels along a circuit board containing a series of contacts.  The player must shoot down the planes by aiming his missile using two buttons to rotate it left or right, then firing by pressing a button on top of a
joystick. The missile is attached to its own wiper that passes over a series of contacts, and if both the player’s missile and the wiper tied to the movement of the bombers on the filmstrip are touching the same contact when the player presses the button, a circuit is completed to register a hit and a solenoid pulls a different slide in front of the projector displaying a red explosion graphic.

By 1970, a slew of manufactures both old and new were rushing to emulate the cartoon-like graphics and realistic sound effects of Speedway and Missile, setting off a technological arms race to provide new arcade experiences unlike any the public had experienced in an arcade before.  As a result, the early 1970s were perhaps the best opportunity since the Great Depression for a clever inventor with a slick new product to break into the industry despite having little working capital and/or no previous track record with coin-operated amusements.  In other words, there would probably never be a better time for Nolan Bushnell and Ted Dabney to introduce the first video arcade game.

Historical Interlude: The History of Coin-op Part 5, Consolidation and Stagnation

During the Depression the coin-operated amusement business flourished by virtue of being cheap.  With every last cent precious, a pinball machine that could provide a few minutes entertainment for a mere penny was the closest thing to a luxury many people could afford.  In the 1950s, however, the economy was booming, the population was growing and dispersing, and there were many new activities to occupy the time of the prosperous suburban middle class.  As a result, coin-operated games morphed from the star attraction of the Sportland to a mere sideshow at a fun spot or department store playland.

Immediately after World War II, it appeared that the coin-operated amusement industry was poised to enter another boom period as manufacturers entered the post-war era with both better equipment and larger manufacturing capacity due to wartime innovations and operators needed to replace roughly ninety percent of the estimated 5,000,000 pinball machines, coin-operated games, vending machines, and jukeboxes in operation at the start of the war. Instead, operators drove themselves to near bankruptcy in 1946 and 1947 trying to replace old machines, while manufacturers continued to increase production through the end of the decade only to discover that distributors and operators could no longer afford to buy from them. As demand for new games fell, the industry began to consolidate as the 1950s progressed until by 1965 what had been over a dozen major manufacturers at the end of World War II were whittled down to just five.  While the remaining manufacturers still released a constant stream of product in the 1950s and early 1960s, many of these games began to lack originality, with companies merely incorporating minor changes into existing concepts each year.  This placed the industry in danger of stagnating entirely by the middle of the 1960s.

This is the penultimate chapter in a six-part examination of the coin-operated games industry before the dawn of the video game era.  Principle sources this time around include Pinball 1: Illustrated Historical Guide to Pinball Machines by Richard Bueschel, The History of Coin-Operated Phonographs. 1888-1998 by Gert Almind, Special When Lit: A Visual and Anecdotal History of Pinball by Edward Trapunski, King of the Slots: William “Si” Redd by Jack Harpster, Bally: The World’s Game Maker by Christian Martels, the article “A Profits Jackpot in Slot Machines” in the March 13, 1977, edition of the New York Times, the article “Gaming Giant Has Checkered Past, Local Ties” in the July 15, 1979, edition of the Boca Raton News, the article “The Seeburg’s Term It Automatic Record Playing, But the Public Calls It the Jukebox” in The American Swedish Monthly, the article “Money in the Box” in the October 27, 1958, edition of Time Magazine, numerous articles from the 1950s and 1960s in Billboard Magazine, the Internet Pinball Machine Database, Bally’s official history from its (now defunct) company website, In re Bally’s Casino Application, 10 N.J.A.R. 356 (1981), and the research and personal recollections of British operator and coin machine historian Freddy Bailey.

The Rise of the Jukebox

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The Wurlitzer Model 24 (1937), one of the most successful jukeboxes before World War II

Coin-operated music machines were a mainstay of arcades from the very beginning, with phonographs in particular being one of the major draws of the earliest amusement parlors of the 1890s.  After the phonograph came down in price enough that practically anyone could afford one, it largely disappeared from the arcade scene, but other musical devices took its place.  Perhaps the most popular machines in the early 1900s were the coin-operated player pianos and organs.  These could be quite elaborate at times, as epitomized by the Mills Violano Virtuoso, invented by Henry Sandell, which combined a self-playing violin and piano in a single large cabinet and sold between 4,000 and 5,000 units between 1911 and 1930.  The advent of electrical recording, however, pioneered at Western Electric in 1924, greatly increased the quality of recorded music while also allowing the playback of recordings to be amplified.  This posed a significant threat to the instrument manufacturers, a challenge first answered by the Automatic Musical Instrument Company (AMI).

AMI began life as two closely linked companies in 1909, the National Piano Manufacturing Company, which built coin-operated musical instruments, and the National Automatic Music Company, which operated them.  Its most prominent product in its early years was a player piano that could automatically switch between eight different music rolls, and by the mid 1920s the companies had around 8,500 machines on location.  In 1925, the two companies merged into one corporate entity, but did not adopt the name AMI until 1927.  That same year, AMI introduced the National Automatic Selection Phonograph, a record player hooked up to a loudspeaker and a selector that could switch between ten records.  The AMI unit was not the first multi-selection record machine, but it was the first device to combine a record player, a selector, loudspeaker amplification, and a coin slot.  By 1930, 12,000 Automatic Selection Phonographs had been installed, and a new segment of the coin-op industry was born.

In the 1930s, several prominent coin-op manufacturers tried their luck at the Jukebox business including Mills and Rockola, but the leading company was Wurlitzer, a musical instrument manufacturer founded by Rudolph Wurlitzer in 1853 in Cincinnati, Ohio.  Starting as an importer of European Instruments, the company became a major manufacturer by supplying instruments to the United States Army during the American Civil War.  When the first fairground organs began to appear in the 1890s, Wurlitzer invested in one of the early manufacturers, the North Tonawanda Barrel Organ Factory, in 1897.  In 1909, Wurlitzer bought the company outright, shifted all production to New York, and developed an organ for motion picture houses that proved highly successful after being released the next year.  With electrical recording paving the way for “talkies” in the cinema and thereby making theater organs redundant, Wurlitzer nearly went out of business in the late 1920s and turned to jukeboxes through purchasing the Simplex Manufacturing Company in 1933, which had developed a multi-selection unit.  Simplex owner Homer Capehart became the general manager of Wurlitzer and guided the company back to success.  By 1936, Wurlitzer had placed 44,000 jukeboxes on location, and the company continued to dominate the market until the late 1940s, when it was dethroned by the J.P. Seeburg Corporation.

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The Seeburg M-100A,which revolutionized the jukebox business in 1948

Born in Gothenburg, Sweden, in 1871, Justus Sjoberg completed a course of study at the Chalmers Technical Institute and then immigrated to the United States in 1887.  In the U.S., he took classes at a Chicago night school, studied technical subjects at the Lewis Institute, and took drawing and design classes at the Chicago Art Institute.  When he became a naturalized U.S. citizen in 1892, he changed his last name to Seeburg.  Seeburg’s first job in the United States was at the C.S. Smith & company piano factory in Chicago, where he learned the musical instrument manufacturing trade.  Several years later, he became the superintendent at another piano maker, the Cable Company, before joining with a partner to establish the Kurtz-Seeburg Corporation in Rockford, Illinos, to manufacture piano actions.  In 1902, he returned to Chicago to establish the J.P. Seeburg Piano Company, which enjoyed great success as a manufacturer of coin-operated pianos and theater organs.

When AMI debuted the National Automatic Selector Phonograph, Seeburg responded in 1928 with its own eight-record machine, changed its name to J.P. Seeburg Corporation to distance itself from its musical instrument roots, and switched its focus to the jukebox business. The Depression hit Seeburg hard, however, and forced the company into receivership in 1931. In response, Justus expanded his company into nearly every device that could be based around a coin slot, including vending machines, washing machines, parking meters, and arcade pieces like the Rayolite gun games, which restored the company’s financial situation by 1934.  That same year, Justus entered semi-retirement and his son, Noel Marshall Seeburg, took over as president.  Seeburg remained number two in jukeboxes until 1948, when it deployed the M-100A, the first jukebox able to play one hundred different selections.  Arriving just before the advent of high quality multi-track tape recording technology, the introduction of the small and durable 45 rpm record, and the explosive popularity of Rock ‘n’ Roll, the 100A completely transformed the coin-operated machine industry and allowed Seeburg to corner 70% of the jukebox market by 1960.

By the mid-1950s, over 500,000 jukeboxes had been installed across the United States, and the sale and operation of coin-operated music and games, largely separate before World War II, consolidated around the music distributors and operators, who placed an emphasis on jukeboxes installed at bar and tavern locations, leaving comparably little room for less profitable classes of machines.  This power shift is perhaps best reflected by changes in the trade organizations of the period.  The coin-operated machine industry first organized nationally during the resurgence of the late 1920s, rallying around the first industry trade magazine, Automatic Age, which started publishing in 1925, and the first nationwide trade organization, the National Vending Machine Operators Association, established in 1926 through the efforts of Chicago coin-operated scale manufacturer and operator E.H. Funke.  The association held the first national coin machine trade show that February at the Great Northern Hotel in Chicago, which became an annual tradition.  The show took place in Chicago in even-numbered years and another major city like Cleveland or Detroit in odd-numbered years, but in 1931 the manufacturers revolted, tired of paying freight to bring their products to other cities when they were nearly all located in Chicago already.  These companies therefore banded together to create the National Association of Coin Operated Machine Manufacturers — later shortened to Coin Machine Industries (CMI) — which hosted an increasingly lavish and well attended coin machine show at the Sherman Hotel in Chicago through the rest of the 1930s.

After World War II, CMI fell apart.  The vending machine trade came into its own during World War II as factories installed food and drink machines to help workers keep up their strength while churning out military equipment.  Feeling their oats, the manufacturers of those machines broke away to form the National Automatic Merchandising Association and launched their own show in 1946, which routinely outdrew the CMI coin show in the late 1940s.  That left amusements and jukeboxes for CMI, but the jukebox makers never liked exhibiting at the coin show because they were forced to turn down the volume of their machines and had a difficult time selling them to potential customers.  The jukebox makers increasingly retreated to private suites in neighboring downtown hotels to show their products, and as the jukebox grew ever more influential in American daily life, the companies involved in the business increasingly felt they no longer needed the CMI.

Two events cemented the end of CMI.  First, the organization announced in 1949 that it would no longer represent companies like Bally that produced payout machines.  In protest, Bally president Ray Moloney organized a new trade organization, the American Coin Machine Manufacturers Association (ACMMA), which announced its own trade show set for May 1950.  Meanwhile, jukebox route operators George Miller of Oakland, California, and Al Denver of New York City forged a loose collection of state and local operators associations into an alliance called the Music Operators of America (MOA) in 1948 to combat efforts to eliminate the traditional music royalty exemption afforded to jukeboxes.  In 1950, the MOA decided to stage its own trade show in November, and CMI, which now stood for Coin Machine Institute, cancelled its show that June when it became clear that distributors and operators did not want to attend another convention so soon after the ACMMA show and were far more interested in clustering around the jukebox and record companies at the MOA convention later in the year.  The short-lived ACMMA disbanded in 1951, while CMI tried one more time to stage a show in 1952, but the show floor was largely filled with purveyors of kiddie rides, and attendance was poor.  As CMI floundered before the onslaught of the jukebox, the industry it represented also began to shrink.

Death and Turmoil in Amusements

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J. Frank Meyer, who led the Exhibit Supply Company into coin-operated machines

In August 1948, Jack Keeney, the pioneering head of J.H. Keeney and Company, passed away not long after suffering a debilitating stroke.  J. Frank Meyer, the man who turned the Exhibit Supply Company into a coin-op powerhouse, died that November, just a few months after his trusted sales manager Perc Smith.  In 1953, Dick Hood passed, and the Hood family relinquished control of H.C. Evans and Company for the first time.  In 1956, William Rabkin, founder of the constantly innovating International Mutoscope, died in a fall from the window of his sixth floor apartment, possibly due to a dizzy spell brought on by high blood pressure.  Once vital contributors to a thriving coin-operated amusement business, these companies bereft of their founders and/or primary movers soon looked for greener pastures.  International Mutoscope ceased manufacturing games not long after the death of its founder, while H.C. Evans attempted to enter the surging jukebox business by purchasing the Mills phonograph division in 1948 and failed so miserably that the company was forced to close in 1955.  J.H. Keeney chose to focus on vending machines and slots and slowly decreased its amusement output before releasing its last pinball game in 1963, while even Exhibit Supply, which under Meyer had blossomed into the leading amusement manufacturer of the 1920s, chose to focus on other areas of manufacturing.

During World War II, Exhibit had developed a new switch, the electro-snap, that proved so useful that the company created a subsidiary called the Electro-Snap and Switch Manufacturing Company to continue selling switches to the military after the war.  By 1957, the switch business completely overshadowed Exhibit’s dwindling amusement business, so the company chose to end amusement equipment manufacturing and give the factory space over to Electro-Snap.  This led to the resignation of company president Sam Lewis, one of a series of short-lived caretakers to run the company after Meyer’s death, and the appointment of arcade division head Chester Gore to run the company.  As Exhibit card vendors continued to be popular, Gore moved the company to a larger factory in 1960 to commence manufacturing of card machines again, but it never returned to other amusements.  Gore continued to run the company until selling out to a man named Paul Marchout in 1979, who was only interested in the name and effectively shut the company down.

The most shocking industry death of the decade occurred on February 26, 1958, when Ray Moloney, president of the Lion Manufacturing Company and its Bally subsidiary, died suddenly of a heart attack at fifty-eight.  From the launch of Ballyhoo in 1932, Moloney had built Bally into one of the largest and most important coin-operated amusement companies, a fully integrated manufacturer of slot machines, payout pinball machines, shuffle alleys, kiddie rides, and various other arcade pieces.  Bally not only manufactured coin-operated machines, but through a host of subsidiaries such as the Grand Woodworking Company, Como Manufacturing Company, Ravenwood Screw Machine Corporation, Comar Electric Company, and Marlin Electric Company, it built nearly all the specialized parts and mechanisms used in its products.  Most recently, Moloney had led Bally into the vending machine business in 1956 with a well received hot and cold drink machine and established a new subsidiary, Bally Vending Corporation, to sell it.

Moloney’s death threw Bally into turmoil.  His entire estate, including Lion and its subsidiaries, was placed in a trust administered by the Chicago-based American National Bank and Trust Company.  Longtime Bally executive Joseph Flesch took over as president, but he relinquished control to Moloney’s sons, Ray Jr. and Donald.  By that time, the decline in the sale of bingo machines brought on by the 1957 Supreme Court decision banning payout pinball machines had significantly impact Bally’s bottom line, and the company was losing money.  American National therefore felt it was in the best interest of the estate to liquidate the firm to pay off debts and estate taxes.  Moloney’s sons argued that allowing Bally to develop and sell new slot machines would restore Lion to profitability, but the bank had no interest in funding an operation it assumed would have deep ties to organized crime.  The Moloneys bought themselves some time by selling Bally’s highly successful drink vending machine business to Seeburg for $3 million in 1961, but the next year American National decided it was time to dissolve the firm.  Bally ultimately survived, however, through the intervention of Bill O’Donnell.

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Bill O’Donnell, the man who saved Bally

Born in 1922, William Thomas O’Donnell was educated at Loyola Academy and Sullivan High School, but was forced to drop out in 1939 at age seventeen to support his family by joining the Underground Construction Company, where his father had served as superintendent before dying in 1929 at the age of thirty-five, to help build the Chicago subway system.  After enlisting in the United States Marine Corps in 1941 and serving in the Pacific Theater during World War II, O’Donnell briefly served as a postal worker after being discharged in 1945 before a cousin who served as Ray Moloney’s bookmaker suggested he seek employment with Bally. O’Donnell joined the firm in 1946 to work in the purchasing department before Moloney named him assistant sales manager six months later. In 1951, Moloney promoted O’Donnell to sales manager, and upon Moloney’s death American National named him to Lion’s board of directors.  O’Donnell subsequently played an active role in trying to save Bally through a management buyout, but he could not find a single bank willing to finance a slot machine company due to fears of ties to organized crime.  He therefore turned to Bally distributors for support.

Runyon Sales, a successful New Jersey distributor fronted by Abe Green and Barnett Sugarman, proved amenable and brought in two other investors of its own, a Brooklyn pool table manufacturer named Irving Kaye and a well-connected former vending executive named Sam Klein.  A native of Cleveland, Ohio, Klein served in the Army in World War II and then entered the family business, a cafe.  In 1954, he purchased the Stern Vending Machine Company of Cincinnati, which he later sold in 1960 to a firm called Emprise Corporation for $1.5 million.  At that time Emprise owner Lou Jacobs asked Klein to find other companies for him to purchase, leading him to talk to Green about buying Runyon.  The deal never materialized, but Green remembered Klein’s connections when it came time to make the Bally deal.  Although hesitant at first, Klein ultimately agreed to come on board and convinced Jacobs to finance a portion of the purchase.  This allowed O’Donnell, Klein, Green, Kaye, and Sugarman to form K.O.S. Enterprises and buy certain assets of Lion Manufacturing and the Bally name on June 17, 1963, for $2.85 million.  K.O.S. subsequently changed its name to the Lion Manufacturing Corporation and named Bill O’Donnell president.  Klein, the largest shareholder of the new corporation, became executive vice president.  Subsequent to the purchase, O’Donnell turned his attention to launching the new slot machine Moloney’s sons had failed to complete.

A Revolution in Slot Machines

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Money Honey, the first electromechanical slot machine

The slot market Bally hoped to rejuvinate entered the 1960s in crisis.  The passage of the Johnson Act coupled with a contemporaneous ban on the manufacture of slot machines by the state of Illinois had virtually destroyed the industry at the beginning of the 1950s, which could now only engage in limited production of machines for Nevada and a few scattered counties and gray markets in other states.  The leader remained Mills, which had transformed greatly since its penny arcade days.  Company founder Herbert Mills died in 1929, though by then he had already divested much of his authority to his sons, Fred, who served as general manager, and Herbert Jr., who ran production.  Fred succeeded his father as president and led the company into vending machines in 1935 in alliance with Coca-Cola, for which it produced one of the first automatic cooled bottle-dispensing soda machines.  The company subsequently established the Mills Automatic Merchandising Company in New York to sell gum dispensers and similar machines.  In 1943, Mills Novelty changed its name to Mills Industries, Inc. to reflect its more diverse range of activities, which now including vending machines, jukeboxes, slots, and refrigeration equipment.

Fred Mills died in 1944 and was succeeded by Herbert Jr. as president, who decided to separate slot machine sales from the rest of the company by establishing Bell-O-Matic Corporation in 1946.  Even with this split the company remained focused on slots until the passage of the Johnson Act, which necessitated an increased focus on vending machines.  The company generally struggled after the War, however, and filed for bankruptcy in 1948.  The company’s creditors appointed a man named A.E. Tregenza executive vice president of Mills Industries, who sold the jukebox division and pushed hard for expansion in vending, freezers, and ice cream machines.  Ultimately, he helped arrange a sale of the company in 1954 to a group of investors led by Richard Dooley.  The new investors were not interested in slot machines, so Herbert Jr. and his brother Ralph retained Bell-O-Matic, which had shifted its headquarters to Nevada in 1951.

Mills’ primary competition in slot machines continued to come from O.D. Jennings and its successor, Jennings & Company, established to take over the assets of the original firm after Ode Jennings died in 1953.  In 1957, Jennings became a subsidiary of the Hershey Manufacturing Company, and by the early 1960s Jennings slot machines represented 80% of Hershey’s total manufacturing output.  Mills and Jennings each held roughly 35%-40% of the slot machine market,  with most of the remainder going to Ace Manufacturing, the successor of a firm called the Pace Manufacturing Company.  Founder Ed Pace had started in slots in 1926 as a purveyor of used machines before buying out another company to start his own manufacturing the next year.  Pace Manufacturing released several popular models in the 1930s and continued operations until the passage of the Johnson Act in 1951, after which Pace retired.  Coin-op veteran Harold Baker took up the manufacturing of Pace slot machines at that point, and when he died two years later, Ace took over the operation.  In the early 1960s, Ace controlled about 15% of the market.

In 1963, Illinois repealed its slot machine manufacturing ban, and O’Donnell was ready to take Bally back into a market it had abandoned in 1949.  Because the Johnson Act had been passed so soon after the complete halt in slot machine production brought on by World War II, most machines in use at Reno and Las Vegas casinos still relied on decades old mechanical technology.  These machines were burdened by several limitations, most notably a payout cap of twenty coins, the most that could fit in a coin tube.  Larger payouts had to be awarded by an attendant who came over to verify the win, and this extended halt in play created a natural ending point after which the patron would often leave.  By incorporating a hopper controlled by an electrical circuit, Bally’s new machines could regulate delivery of several thousand coins in a variety of payout combinations, thereby allowing faster, more exciting play sessions.

The hopper that proved so crucial to Bally’s new slot machine came to the company in a roundabout way thanks to a prominent Vegas distributor named Mickey Wichinsky.  Starting as an operator in the Castskills in the 1940s, Wichinksy developed connections with both Runyon Sales and the mob-backed Las Vegas casino operations and moved to Las Vegas in 1956 to establish a distributor called Frontier Vending and take over as the Pit Boss of the Sands Casino, where he became the first person to install Bally machines in a Vegas casino.  In 1960, Wichinkky financed the development of a new roulette table produced by Jack Lavigna and Clarence “Doc” Kaufman for the Acme Novelty Company. In addition to providing funding, Wichinsky, who started designing his own games on the side in 1957,  also developed the first hopper mechanism for the machine.  The roulette proved unsuccessful, but Kaufman also served as Bally’s distributor in southern Nevada and passed the hopper innovation along to the company.  Bally built five prototype hopper machines by converting an old mechanical machine called High Hand and passed them along to Wichinsky, who had in the meantime bought out Kaufman’s business and now ran Bally’s southern Nevada distributor, the Bally Sales Company. The prototype proved poorly engineered, however, so Kaufman rebuilt it to create the Bally Model 742A.  At first unable to win approval from the Nevada Gaming Commission for the 742A, Bally turned to England, where a law passed in 1960 had legalized slot machines in pubs for the first time.  Cyril Shack of the Phonographic Equipment Company began importing the machines by the planeload, but felt that in order to garner mass market appeal, the 742A would need to have a proper name.  He suggested Money Honey.

By 1964, Bally was in full production on Money Honey, but many Nevada casino owners were hesitant to buy the new machines, largely due to quality concerns and the expense of replacing their entire stock of machines at once, so production remained limited for the first few years and sales were mostly made overseas.  Things changed in 1967 when a veteran Wurlitzer distributor named Si Redd established the Bally Distributing Company in Reno at O’Donnell’s behest with a mandate to sell Money Honey machines in northern Nevada.  Redd took to installing up to twenty slot machines at area casinos free of charge and sometimes even offered to reinstall their old machines for free if the owners were not satisfied with the Bally machines.  When operators saw their earnings per machine increase by as much as 400% with electromechanical slots, the logjam broke, and Bally took over the market.  In 1968, Bally produced 94% of all the slot machines sold in the state of Nevada.  Buoyed by this success, O’Donnell incorporated Lion as the Bally Manufacturing Corporation that year with the intent of taking the company public.  A long Securities & Exchange Commission investigation followed to insure the company was not a front for organized crime, after which Bally became the first publicly traded coin-operated manufacturer on March 13, 1969.

Innovation in Pinball

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Duette (1955) from Gottlieb, the first two-player pinball

Through all the turmoil of the 1950s as companies closed, prominent executives died, gambling devices faced legislation, and target demographics changed, one company continued on as it always had.  David Gottlieb was known as a conservative businessman who rarely took risks and ran his affairs as if the entire coin-op industry could fall apart at any time.  He therefore refused to chase novelty markets and fads, focusing on the amusement pinball trade that had served him well since Baffle Ball in 1931.  While Ray Moloney at Bally expanded into the gambling business as fast as he could and eventually ceased building traditional pinball machines entirely in favor of bingo games, Gottlieb refused to release payout machines of any kind and publicly feuded with his counterpart at Bally, arguing that gambling machines only invited government interference.

Even as shuffle alleys and pool games dominated the first half of the 1950s, Gottlieb continued to focus its attention on pins.  While an individual machine in this period might sell only 1,000-2,000 units, Gottlieb maintained an aggressive release schedule of between ten and twenty tables a year to become the dominant pinball manufacturer in the industry.  Remarkably, nearly all of these tables were designed by a single man, Wayne Neyens.  Born in Iowa in 1918, Neyens was attending Crane Technical High School in Chicago in 1936 when a coin-op company called Western Equipment & Supply came to the school looking to hire a draftsman.  Neyens worked part time for Western until he graduated high school and then joined the company full time doing odd jobs in the shop and eventually becoming a line inspector.  In 1939, he left Western in a salary dispute and joined Gottlieb as a tester.  Neyens designed his first pinball game in 1949, and when flipper inventor Harry Mabs left the company in 1951 to work for Williams, Neyens took his place as Gottlieb’s principle designer.

Pinball experienced few innovations in the 1950s, but Neyens was responsible for most of them.  Perhaps the most significant was the advent of multiplayer pinball, in which several players competed with each other for a top score.  The key technological innovation that made multiplayer pins possible was the introduction of mechanical reels to tally the score in place of numbers lighting up on the backglass, which debuted in the Williams pin game Army-Navy in 1953.  Gottlieb introduced the first four-player pinball machine, Super Jumbo, in 1954, but the game was not particularly successful due to the mistaken perception that four players were required to play the game.  Neyens therefore went back to the drawing board and created the first two-player pinball game, Duette, the next year.  Duette proved far more successful, and by 1956 multiplayer pinball machines had eclipsed single player pinballs and pool tables in sales at Gottlieb.  Multiple players also justified a higher price per play, and along with bumper pool Gottlieb’s multiplayer machines led a transition from penny and nickel play to dime machines.  In 1960, Gottlieb introduced another innovation on its Flipper table, the add-a-ball mechanism, created to circumvent laws in certain jurisdictions like Texas were a free play was considered a prize that transformed an amusement pinball into a gambling machine.

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Sam Stern (l) and Harry Williams

While industry leader Gottlieb proved a model of stability in the 1950s and 1960s, the number two pinball company, Williams, underwent several profound changes that began when company founder Harry Williams met a man named Sam Stern. Working in the clothing business in 1931, Stern decided on the advice of friends to break into the coin-op industry as a route operator in Philadelphia and became a major player after becoming a Rockola jukebox distributor in the city in 1939. Eager to move further up the chain, Stern walked into Williams’s office in 1947 and brazenly asked to buy 49% of Williams Manufacturing, and Williams, who far preferred designing to managing, agreed to sell. Stern became a vice president at Williams in January 1948 and held the post for the next eleven years before orchestrating a buy-out of Williams in 1959 by Consolidated Sun-Ray, a New York retail conglomerate that operated a variety of businesses from drug stores to discount houses.   Both owners were offered cash or stock in the deal. Williams opted for cash and left the company, while Stern took stock and replaced Williams as president of the renamed Williams Electronic Manufacturing Corporation.  The merger with Sun Ray did not work out, however, and Williams became independent again in 1961.

Under Stern, Williams could never dethrone Gottlieb from the top of the pinball industry, but it maintained the Williams legacy by being the main innovator of the game in the late 1950s and early 1960s. Leading these developments were Harry Mabs, the flipper inventor who joined the company from Gottlieb in 1951, and flipper refiner Steve Kordek, who stayed at Genco, which became a subsidiary of Chicago Dynamic Industries in 1952, until the company shut down in 1959 and then worked briefly at Bally before joining Williams in 1960.  In 1958, Mabs built a game called Gusher that featured the first “disappearing bumper,” a bumper that would lower into the playfield when hit.  In 1960, he designed a game called Magic Clock that featured the first moving target on a pinball playfield. Mabs retired soon after, and in 1962 Kordek designed another innovative table called Vagabond that featured the first drop target on a playfield, a special type of standup target that drops below the playfield when hit.  The next year, Kordek introduced another important innovation in Beat the Clock, multiball, the possibility of having more than one ball in play at the same time if the proper targets are hit.  In 1966, another designer named Norm Clark gave Williams one of the biggest hits of the decade, a 5,100-unit seller called A-Go-Go that featured another new playfield mechanic, a captive ball spinner that spun around and dropped the ball into a hole with a random point value when trapped by the device. These tables helped transform pinball into a game of structure and sequence as the primary objective of the game became hitting a group of targets in a specific order or targeting a specific part of the playfield at a specific time to gain added benefits and bonus points. Ultimately, Williams’ expertise in pinball design attracted the attention of another major coin-op firm with ambitions to expand, the Seeburg Corporation, which had recently come under new management.

In the early 1950s, Herbert Siegel, a journalism graduate working for a Manhattan TV firm, and Delbert Coleman, a University of Pennsylvania law student, combined their resources to buy a stake in a soft drink company that they then swapped to acquire a Cleveland chemical company whose earnings they were able to double in ten months. Next, they set their eyes on Fort Pitt, a Pittsburgh beer brewing company established in 1906. Once Pennsylvania’s top brewer, Fort Pitt had been severely hamstrung by a series of strikes in the early 1950s and had sustained losses of over $1.8 million by 1955. These losses could be offset through a merger with a profitable company, however, so Siegel and Coleman courted the brewer’s longtime president, Michael Berardino, and arranged a merger in April 1956 with two coat companies owned by the Siegel family, Windsor Overcoat and the Jacob Siegel Company. After concluding this deal, Siegel and Coleman marshaled the combined financial might of the new conglomerate to purchase Seeburg that December, which by then enjoyed average yearly sales of around $30 million and average yearly earnings of $2.6 million. With these acquisitions complete, the duo orchestrated a management coup in March 1957, removed Berardino from the company, and secured Siegel’s appointment as chairman of the board and Colemen’s appointment as president of Fort Pitt. The duo then sold off the brewery business that November and changed the name of the parent company to Seeburg Corporation in April 1958.

After securing their hold on Seeburg, Siegel and Coleman initiated an aggressive expansion plan intended to involve the company in nearly every coin-operated field. In 1958, the company purchased the cigarette vending machine business of Eastern Electric.   In 1961, it added Bally’s drink vending business.  Several more drink and cigarette vending machine purchases followed along with the Kinsman Organ Company, which together made Seeburg the largest manufacturer of coin-operated equipment in the United States. Seeberg’s efforts culminated in an expansion into the coin-operated amusement field in June 1964 through the purchase of Williams from Stern followed by the acquisition of United Manufacturing from founder Lyn Durant that September, which was absorbed into Williams. To run its amusement business, Seeburg kept on Stern as president of Williams after the purchase.

With the closing of Genco in 1959 followed by the purchase of Williams and United by Seeburg five years later, the fraternity of coin-op amusement manufactures dwindled to just five companies: Gottlieb, Williams, Bally, Chicago Coin, and Midway.  Gottlieb remained the leader in pinball, a title it would not relinquish until the mid 1970s, trailed by Williams, Bally — back in the amusement pin business after bingo games were banned in the early 1960s — and Chicago Coin.  In novelty, Williams continued to dominate pitch-and-bat baseball games and also took the lead in shuffle alleys and ball bowlers — which were often marketed under the United name — after Bally quit production at the beginning of the 1960s.  Chicago Coin and Midway, meanwhile, offered the most comprehensive lineups of novelty arcade pieces.  With so few manufacturers of equipment, however, stagnation quickly set in as new game designs became stale and predictable and companies often merely incorporating small cosmetic changes into existing concepts to differentiate them from the models released the year before.  Just as coin-operated amusements appeared ready to enter a steep decline, however, a savior appeared in the form of a new type of arcade machine from Japan.

Historical Interlude: The History of Coin-Op Part 4, From Sportlands to Playlands

Pinball ruled the roost of the 1930s arcade, selling in numbers that no other coin-operated amusement could approach, but it was hardly alone.  Sports games, shooting games, athletic machines, crane games, and a whole host of other exotic contraptions continued to exist alongside pin tables under the catch-all categories of “novelty amusements” or “arcade pieces.”  After pinball’s decline in the 1950s due to bingo machines, gambling stigma, and the Johnson Act, many of these products came out from pinball’s shadow to take center stage in the industry.  Pinball did not vanish, of course, continuing to contribute significant revenues, but it was no longer the dominant game in production.  Instead, it was the novelty products that drove the industry, with new concepts like shuffle alleys and bumper pool briefly taking the market by storm and then being superseded by the next big thing.  At the same time, the decline of the inner city and the rise of suburbia coupled with the onset of the Baby Boomer generation signaled a shift in arcade venues once again.  While the big inner city arcades did not disappear entirely, by the end of the 1950s coin-operated amusements had dispersed across fun spots like bowling alleys and skating rinks and shopping venues like department stores and discount houses while exhibiting a new focus on children’s entertainment.  This helped precipitate a period of rapid consolidation that left only five major producers of coin-operated games by 1965.

This is part four in a six part series examining the history of the arcade industry from its earliest days until the dawn of the video game era. Principle sources this time around were Automatic Pleasures by Nic Costa, Arcade 1: Illustrated Historical Guide to Arcade Machines by Richard Bueschel and Steve Gronowski, numerous articles in Billboard Magazine from the 1950s and 1960s, the website pinrepair.com. and the forthcoming book All In Color For a Quarter to be published by Keith Smith (no relation).

Bats, Balls, Pins, and Pucks

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The playfield of All American Baseball, the first pitch-and-bat style coin-operated baseball game

The first novelty games to achieve prominence in the late 1920s were the floor-model sports cabinets like the Chester-Pollard football and golf games that fueled the new Sportland arcade.  This genre enjoyed its peak popularity between 1927 and 1931, after which the high cost of the cabinets and the nickel playing price left an opening for the penny play pinball machines to begin their rise to dominance.  Nevertheless, new sports games would continue to appear from time to time during the Depression, complimenting the pinball and crane games that dominated the decade.  After World War II, with pinball on the decline and crane games banned entirely by the Johnson Act, sports games began appearing in greater numbers, although they were never one of the main selling points of the arcade.  While at least one game for just about every popular sport in the U.S. was released over the next two decades, the most widely emulated sport was baseball.

The first known coin-operated baseball game was created by Californian George Miner in 1929.  Both an avid baseball fan and an accomplished coin-op engineer, Miner combined his interests in the All American Baseball Game.  Clearly inspired by the Chester-Pollard output, All American Baseball featured manikins displayed in a large wooden cabinet and a bat controlled by a lever similar to the one on the Play Football game.  Holes in front of each fielder represented outs, while a series of troughs along the back of the cabinet represented everything from a foul ball to a home run.  For a nickel, the player could keep swinging at balls until he made three outs.  Miner established the Amusement Machine Corporation of America in Nevada in 1930 to sell the game, but in 1931, he sold the rights to Harry Williams when the sports game market went south.  Williams remained enamored with baseball games for the rest of his career and became one of the principle drivers of the market both before and after establishing the Williams Manufacturing Company in 1943.  In 1935, after he joined Bally, he and Miner prepared to create an updated version of All American Baseball for the company, but these plans were cut short when Miner died in a plane crash on October 7.  When Williams moved to Rockola in 1937, however, he brought the Miner patents and tooling with him and created World Series 1937, which proved a modest hit.

After World War II, Bally ushered in a new era of baseball games in 1947 with Heavy Hitter, for which it purchased the rights from its inventor, a Royal Oak, Michigan, cab driver named Jimmy Keller.  Key to the new game’s popularity was the fast, unpredictable delivery of the ball, accomplished through a mechanism that launched it from under the table.  Several imitations followed from companies like Gottlieb and United, but the Williams Manufacturing Company seized leadership of the genre.  Beginning with a game called Box Score in 1947, Williams manufactured a new baseball game nearly every year through 1973.  Innovations by Williams over those twenty-five years include the first “running man” unit, which circled the bases as the player recorded hits, on Super World Series in 1951, one of the earliest games with multiple pitch types, Deluxe Short Stop, in 1958, the first game to allow additional playing time for reaching a certain score, Extra Innings, in 1962, and the first game to use electronic sound, Action Baseball, in 1971.  United remained a close competitor and often copied Williams innovations, though quite possibly with the permission of Harry Williams himself seeing as he and United owner Lyndon Durant were old friends.

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Ten Strike, a popular manikin bowling game from H.C. Evans and Company

While baseball remained the most enduring sports game of the period, manikin cabinets devoted to other games appeared from time to time.  One of the most popular — both before and after World War II — was a bowling game called Ten Strike produced by H.C. Evans Company.  Originally founded by Edwin Hood in 1892 as a carnival supplier, H.C. Evans became a pioneer of console gambling games under the founder’s son, Dick Hood, with the wildly popular Galloping Dominoes unit in 1936.  By 1939, Evans was really feeling the heat of the anti-gambling lobby and decided to produce a console game incorporating skill-based elements, which led to the development of Ten Strike.  In this game, the player uses a knob to position the arm on a mannikin holding a steel ball and then presses a button to launch the ball at a set of miniature bowling pins.  The game remained in continuous production from 1939 to 1953 — with the exception of the war years — and entered production again in 1957 as the two-player variants Ten Pins and Ten Strike from Williams after that company bought the rights from Evans in 1955.

Another company to invest heavily in sports games was International Mutoscope, known for being one of the premiere innovators in the field of coin-operated novelty machines.  In the early 1940s, the company deployed the earliest known coin-operated hockey game, Play Hockey.  Presaging the the ball-and-paddle video games that rose to prominence in 1973, this game placed two players in control of manikin hockey goalies at either end of a long table.  Each player could swing his goalie’s stick by rotating a knob, and the objective was to knock a ball into the opposing player’s goal.  In 1948, the company deployed another unusual sports game, a boxing title called Silver Gloves.  In this game, each player controls a boxer through a lever that allows him to move left and right and a trigger that allows him to punch.  The goal is to knock the opposing player’s boxer down.

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Goalee, a hockey game by Chicago Coin

Perhaps the company that experienced the greatest success with non-baseball manikin sports games was Chicago Coin.  The story of Chicago Coin is intimately tied to that of Genco, as the founder was yet another brother of the three men that established that company and was actually responsible for getting the family into the industry in the first place.  Samuel H. Gensburg was born in Russia in 1893, but the family immigrated to the United States when he was three years old and settled in Pittsburgh.  A natural businessman, Gensburg helped out in his father’s grocery store for a time until he decided he wanted to open his own store at sixteen.  Before long, his store was outperforming his father’s, and he opened a second store the next year followed by a nickelodeon cinema the year after that when he was just eighteen.  At roughly age 20, Gensburg left Pittsburgh to seek new opportunities in the Western United States, but those plans ended in Chicago when he met, fell in love with, and ultimately married Dora Wolberg in 1919.  He worked as an order filler for Sears for a time and then moved to Iowa to run a grocery store.

Eight years later, Sam learned about a company up in Milwaukee that had installed a
coin-operated machine that vended Hershey bars and decided to install one in his store. When it proved successful, he bought 100 of the machines and relocated to Chicago to place them in bars and taverns in partnership with his brother, Dave.  In 1929 or 1930, the Gensburg brothers were introduced to the Little Whirlwind machine developed by coin-op innovator Howard Peo.  Like the early pinball games, Little Whirlwind was a countertop unit in which the player launched steel balls onto a playfield and hoped they landed in scoring holes, but it had a vertical orientation rather than a horizontal one and featured spiral lanes rather than pins, taking inspiration from the allwin gambling games currently popular in Europe.  Figuring the game would be a nice addition to his route, Sam contacted another of his brothers, Louis, a manufacturer of prizes for Cracker Jack boxes, who built a copy of Peo’s game called Hearts that the Gensburg brothers sold for a cheaper price.  When Peo threatened legal action, the trio brought in a cousin who had invented an electric pencil sharpener and a bicycle coaster brake, to build a new version that did not run afoul of Peo’s patents.  Based on this arrangement, Louis, David, and their brother Meyer established Genco in 1931, while Sam joined with his brother-in-law, Sam Wohlberg, and a third partner named Lou Koren, to establish a trade-in business for used coin-op machines dubbed the Chicago Coin Machine Exchange.

Before long, Sam decided that he could make better pinball machines than his brothers and established Chicago Dynamic Industries as a manufacturer of games marketed under the Chicago Coin name.  The company started making replacement boards for popular existing games like Ballyhoo before deploying its first original pin table, Blackstone, in 1933.  Two years later, the company experienced success with Beam-Lite, the first pinball game with a lighted playfield and a 5,000-unit seller.  Like Genco, Chicago Coin prided itself on improving on the ideas of others rather than making important technological innovations itself, so the company rarely had a leading game in the market.  One of its pingames, however, a 1947 flipperless release called Kilroy, sold a remarkable 8,800 units, the most of any pin game between World War II and the first licensed games of the mid 1970s.

In addition to pinball, Chicago Coin aggressively entered every novelty category in existence, which guaranteed that even though few of its products were leaders in their field, the company remained generally successful based on the sheer volume of its output.  Therefore, it is no surprise that the company quickly embraced sports games after World War II.  In 1946, Chicago Coin released a game called Goalee [sic], an enhancement of the International Mutoscope Play Hockey game that replaced the dials with levers and included an electric motor, thereby allowing a single player to challenge a hardware-controlled opponent.  Popular for years after its debut, Goalee brought Chicago Coin over half a million dollars in revenue.  The next year, the company expanded its sport line into basketball with Basketball Champ, in which one player controlled a player trying to make a shot on the basket and the other player controlled a defender attempting to block the shot.  While manikin sports games like these achieved some popularity, however, it was larger table sports games that fueled a new expansion of coin-operated amusements into bars and taverns in the 1950s.

Bowling, Bumper Pool, and Shooting Galleries

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Shuffle Alley from the United Manufacturing Company, which ushered in a whole new category of coin-operated amusements

The decline of pinball in the postwar era was not just due to the game being outlawed in major markets like New York, Los Angeles, and Chicago.  Just as damaging was the continuing stigmatization of the game as a front for organized crime due to the production of payout models such as Bally’s bingo games.  As a result, many legitimate businesses were hesitant to allow any pingames on their premises, denying distributors and operators the same access to bars and taverns they had enjoyed during the Depression.  Therefore, coin-operated amusement manufacturers urgently needed to develop new table games to stay relevant in postwar America.  The solution to this problem came from Lyn Durant and his United Manufacturing Company, which had the good fortune to develop a new type of game just as a new fad began sweeping the country.

In October 1949, United deployed a bowling game called Shuffle Alley in which the player launched a small metal-cased object similar to a hockey puck down an eight-foot lane to trigger switches on the playing field that would cause suspended pins to retract to simulate being knocked down.   Similar coin-operated games had appeared as far back as the 1890s, but had never really caught on in a big way before.  This time, however, things were different.  For one, United melded its bowling game with some of the most popular features of the pinball table such as electromechanical engineering, totalizer scoring, and a colorful, lighted backglass.  More importantly, however, American Machine and Foundry (AMF), a major defense contractor looking to diversify its business, deployed the first automatic pinsetter for bowling alleys in 1951.  Spurred by this innovation, bowling quickly became one of the most popular competitive sports in the United States, and new bowling alleys opened across the nation.  With bowling so popular, bar owners that would never think of hosting a pinball table due to their sinister reputation were soon clamoring to have a shuffle alley in their establishments.  United sold over 10,000 units of its Shuffle Alley  game and was quickly joined in the market by other companies like Chicago Coin and Genco, but the dominant company in the field was Bally, which by the mid-1950s was releasing a new game every other month in a variety of configurations to fit the needs of bars and taverns of all shapes and sizes. Although introduction of new models declined after 1955 as the market neared saturation, shuffle alleys continued to be produced into the 1990s.

Just as the shuffle alley began to decline, another new concept appeared to keep the tavern market going.  Before the Great Depression, the game of pocket billiards had been one of the most popular table games in the United States.  So popular, in fact, that in the late nineteenth century betting parlors — called “poolrooms” at the time — often featured billiard tables so patrons could pass the time between horse races.  As a result, Americans soon began referring to the game of pocket billiards as pool.  During the Depression, pool entered a long period of decline that continued after World War II and did not end until the 1960s.  In the meantime, manufacturers looked for other ways to keep the pool table relevant.

In May 1955, a Bay City, Michigan, company called Valley Manufacturing, originally established as a shuffleboard manufacturer in 1944, introduced a new billiards game called bumper pool.  Rather than featuring pockets around the perimeter of the table, this game features just two holes set into either end of the table, one for each player.  Upon inserting a dime, each player is provided a cue stick and five balls, which he has to shoot into the hole on his opponent’s side of the table.  In the middle of the table are eight strategically placed bumpers to make shots more difficult.  In 1954, no coin-operated pool games had been introduced into the market, but after Valley’s game took off, a whopping thirty games debuted before the end of the year.  In 1956, the number of new games jumped to 52, by far the most models introduced of any type of amusement machine that year.  Subsequently, the number of new bumper pool models declined precipitously as the brief fad ended.  In 1957, however, both Valley and another firm called Fischer Manufacturing put a coin slot on a traditional six pocket pool table, bringing coin control to the standard billiards industry.  As interest in pool revived in the 1960s, coin-freed pool tables became one of the pillars of the coin-operated amusement industry.

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Air Raider from J.H. Keeney and Company, a popular target shooting game during World War II

Another game that experienced increasing popularity both during the Depression and in the post-war period was the coin-operated target shooting game, in which a player uses a gun-shaped controller to aim and shoot at targets.  Shooting galleries were a popular destination in Victorian England, so it should come as no surprise that the earliest coin-operated rifle games appeared — like so many other coin-operated machines — in Great Britain in the 1880s and 1890s.  The earliest known game of this type, in which inserting a coin would release the firing mechanism on an actual rifle that fired either pellets or real bullets, was created by Englishman William Reynolds in 1887, but it proved unsuccessful.  Over the next several years, innovations in the field centered around the countertop trade stimulator models until the next major breakthrough in full-sized target shooting, the electric rifle, was patented by Englishman J.L. McCullogh in 1896.  This rifle did not fire a projectile, but could be attached to a target via wires and register hits by determining the position of the gun relative to the target through the use of wipers and contacts.  Popular in both Great Britain and the United States at the turn of the twentieth century, electric rifle games ultimately faded from the public consciousness as the arcade fell out of favor in the 1910s.

In the mid 1920s, the electric rifle returned to prominence in the United States thanks to the efforts of William Gent.  Born in Rockford Illinois in 1871, Gent entered the coin-operated machine business in 1903 through the Buffalo firm of Mark Wagner & Company.  In 1906, Gent moved to Cleveland to become the manager of the United Vending Machine Company, which was reorganized as the William Gent Vending Machine Company in 1917.  As coin-operated games returned to prominence in the 1920s, Gent, by then one of the most influential entrepreneurs in the coin-op industry, decided to redesign the old electric rifle concept by replacing the plain circular target on a cast-iron lollipop stand with a wooden cabinet featuring an array of targets such as ducks that “quacked” when hit and planes with propellers that would spin when they were shot.  Gent marketed this game as the Electric Rifle.

In 1929, a Canadian inventor named Henry Clavir created his own twist on the shooting game with Radio Rifle, the first game to employ targets projected on a screen.  In this game, a rifle sits atop a large metal box housing a roll of film and a projector.  Upon the insertion of a nickel, the projector turns on and beams the top image on the film roll onto a surface.  The player receives five shots, and each time he pulls the trigger, a needle inside the machine synced to the position of the gun punctures the film, which looks like a bullet hole on the projected image.  After the player takes all his shots, the machine cuts the target off the film roll and vends it to the player as a souvenir.

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The Rayolite Rifle Range, perhaps the first target shooting game utilizing a light gun

Gun games using contacts and needles were ultimately superseded by guns using light sensing technology.  The earliest patent for a light gun was filed in 1920 by an Englishman named W.G. Patterson, but he appears not to have created any games based on his invention.  Instead, a small Tulsa, Oklahoma, firm called the Rayolite Rifle Range Company pioneered the light gun game.  Established in 1934, the company was built around the Ray-O-Lite System, patented by Charles Griffith in the same year the company was founded, in which a specially-made gun shoots a narrow beam of light when the trigger is pulled that is picked up by a solar cell attached to a target to register a “hit” on the object.  The company created the Rayolite Rifle Range around this system with a duck as the target, which was manufactured starting in 1935 by the Seeburg Corporation.  When the game proved successful, Seeburg continued to create other popular light gun games over the next decade and a half such as Chicken Sam (1939), Shoot the Bear (1947), and Coon Hunt (1952).

With World War II looming in Europe by the end of the 1930s, the light gun reached the apex of its popularity as games with a military theme took center stage, led by the releases of J.H. Keeney and Company.  In 1939, Keeney deployed Anti-Aircraft Machine Gun, which featured a large metal machine gun replica and targets projected onto a screen. The game proved so popular that a number of variants were released over the next two years such as Air Raider and Shoot Your Way to Tokyo.  Meanwhile, Seeburg created war-themed variants of its popular Chicken Sam game like Trap the Jap and Hit the Siamese Rats. The popularity of these light gun games peaked in early 1942, after which the production of new amusement machines was curtailed by the entry of the United States into the war.  Light gun games failed to enjoy the same success after the war, superseded by a new gun game concept pioneered by an engineer named Eldon Dale.

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An early Dale gun game manufactured by the Exhibit Supply Company

A native of Missouri living in Long Beach, California, Dale developed his own twist on the old electric rifle game by having the gun swivel on a stand attached to a metal rod extending under a greatly truncated playfield. If the player lined up the rifle perfectly with a target, the metal rod would touch it, and a pull of the trigger would complete a circuit to register a hit. To give the illusion of a large playing area within the small cabinet, Dale used a mirror to reflect the targets in a manner similar to a submarine periscope.  Before the Dale system, both light gun and electric rifle games required a great deal of space to place enough distance between the player and the target, making them suitable only for larger venues.  The Dale game, however, fit in a cabinet no larger than a pinball table, making gun games suitable for a variety of locations.

Dale created his gun game at his own Eldon Dale Manufacturing Company, but it was released nationally by the Exhibit Supply Company as Shooting Gallery in March 1950.  Once the game was in the field, however, Exhibit discovered that the Dale mechanism could easily shock the player, so the company redesigned it and released a whole line of games in October 1950 featuring the same basic setup but different themes and cabinet art.  Before long, Genco and United were making versions of the Dale gun game as well.  Production of Dale games peaked in 1954, a year in which fifteen different gun games were released and manufacturers built over 7,000 cabinets in just seven months.  Although fewer games were produced per year after that, target shooting games remained an important draw not just at arcades, but at a wide variety of new venues that began appearing by the end of the 1950s.

Fun Spots and Playlands

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Gun games and a sound recording booth at the Wonderland Arcade in Kansas City, Missouri, 1968

Throughout the 1950s, the United States experienced great population shifts as the development of the Interstate Highway system and the rise of an automobile-centric culture led many families to leave life in the big city for rapidly developing suburban communities.  As a result, traditional arcades once again entered a period of decline, trapped as they were in newly blighted inner city neighborhoods.  Simultaneously, as the youth population of the United States exploded through the onset of the Baby Boomer generation, all manner of new entertainment venues opened their doors in suburbia such as bowling alleys, roller and ice skating rinks, public swimming pools, drive-in theaters, and amusement parks.  Collectively referred to as “fun spots,” there were an estimated 21,093 such venues around the country by 1958 taking in $2 billion annually.  With the inner city arcade once again falling by the wayside and many bars only amenable to select pieces like shuffle alleys, these fun spots were vitally important to the continued well-being of the coin-operated amusement industry.

During the Depression, coin-operated amusements had catered to adults looking to forget their troubles for an hour or two through the relatively cheap thrills of the penny arcade.  With amusements expanding heavily into fun spots in the 1950s, however, the emphasis shifted to providing fun for the whole family — and especially for children.  Therefore, sports games, gun games, driving games, ball bowlers (a variation on the shuffle alley first introduced by United in 1956 that sported longer lanes and miniature balls rather than pucks), snack vending machines, and novelty pieces like instant photo booths and voice recorders all played an increasingly prominent role in the industry.  Perhaps the greatest indicator of the importance of children to the new amusement arcade, however, was the rapid development of a new segment of the business during the decade, the kiddie ride.

In 1931, Otto Hahs, owner of the Hahs Machine Works in Sikeston, Missouri, decided to build a mechanical horse to entertain his children.  Before long, children from around the neighborhood were showing up in droves to ride this contraption, so Hahs decided to attach a coin chute and a timer to turn it into a commercial product.  Hahs experienced some success in selling his rides to arcades and amusement parks — as well as exhibitors at the 1933 Chicago and 1939-40 New York World’s Fairs — but they remained a niche attraction.  In 1949, however, the Exhibit Supply Company engaged Hahs to design kiddie rides that it would mass produce, signalling a new phase in the business.

Initially, Exhibit followed Hahs’s lead in selling the rides to amusement parks and arcades, but the company soon felt that a better target for the product would be department stores, which generally hosted rides such as trains, boats, and ferris wheels in their toy sections during the Christmas season to lure in holiday shoppers.  Store owners were skeptical at first, but a 22-year-old entrepreneur named Matty Carbone ultimately convinced the Chicago department stores Goldblatt and Weiboldt to install a few kiddie horse rides, which proved to be a great draw, often taking in $100 per horse per week.  Other stores quickly installed their own rides, and by 1953 there were 8,200 kiddie rides in operation around the country, mostly horses, but also other conveyances like cars, boats, and rocket ships.  Exhibit Supply remained a leading firm, but Bally invested heavily in kiddie rides as well.  By 1959, the popularity of kiddie rides and similar amusements had paved the way for yet another new arcade venue, the playland, which would be situated in a high traffic area of a department store, discount house, or shopping center and offer a full range of coin-operated rides and games aimed at children.

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Hank Ross, co-founder of the Midway Manufacturing Company

The new demand for arcade pieces to fill fun spots and playlands aided the growth of the last significant coin-operated amusement manufacturer founded before the dawn of the video game era, and the first such company since the start of the Great Depression not established to focus on pinball.  Mechanical engineer Marcine Wolverton, who went by “Iggy” because many people considered Marcine to be a girl’s name, designed aircraft ordinance during World War II and then entered the coin-op industry after its conclusion, briefly working at jukebox maker Wurlitzer before landing at the United Manufacturing Company.  In 1947, he was joined there by electrical engineer Hank Ross, who had previously worked for Exhibit Supply.  When United began to encounter difficulties in the late 1950s, Wolverton and Ross, regarded as two of the company’s top designers, decided to strike out on their own.  Scraping together $5,000 dollars, they formed an equal partnership in October 1958 based in the Chicago suburb of Franklin Park, Illinois, called the Midway Manufacturing Company, named for the nearby Midway Airport.

Wolverton and Ross planned to survive as a small company in the highly competitive coin-op industry through a low overhead factory operation that would allow them to undercut competitors on price.  To that end, they leased a small 5,000 square foot manufacturing facility and fabricated most of their factory installations and game parts themselves.  Working long hours at the plant during the day, both men also attended night school to brush up on business.  In January 1959, the duo began production of their first game, a shuffleboard with a rebound feature called Bumper Shuffle, followed in May by a unique game called Red Ball in which the player presses buttons to launch balls at a bingo-style play field in the hopes of arranging them in various configurations to score points.  In 1960, the company scored its first major hit with a pellet shooting game called Shooting Gallery and thereafter focused largely on gun games and pitch-and-bat baseball games, also adding a shuffle alley line in 1966 after moving to a larger facility in nearby Schiller Park.  In 1964, Midway introduced two important innovations to Dale-style shooting games through a wild west themed game called Rifle Champ, automatic speed control that causes the targets to speed up as the player scores more points and targets that appear to glow through the use of fluorescent paint and a black light.   Glowing targets became standard in most target shooting games going forward, one of the few major innovations in an industry beginning to show signs of stagnation.  By 1965, Midway’s innovative game designs and manufacturing skill had brought the company enough success that the trade press recognized the firm as one of the “big five” manufacturers of coin-operated amusements alongside Gottlieb, Bally, Williams, and Chicago Coin, the only significant companies to survive — and sometimes just barely at that — a brutal shakeout of the industry in the late 1950s.

Historical Interlude: The History of Coin-Op Part 3, Pinball

Many novelties, attractions, and games have graced the arcade over the course of 140 years, from peep shows, to music players, to target shooting games, to video games, but only one has endured from the industry’s earliest days to the present day: the game of pinball.  While the modern form of this classic game bears no resemblance to the earliest bagatelle games that pioneered the form in the 1870s, the idea of guiding a ball around a playfield full of obstacles to score points has resonated with the arcade-going public like nothing else introduced by the inventors and moguls in the field of coin-operated entertainment.  From the trade stimulators of the 1890s to the wildly popular pintables of the 1930s to the flipper machines of the 1950s and the solid state machines of the 1970s, pinball has been redesigned many times only to fall on hard times and then return again stronger than before.  With the general decline of the arcade in the western world in the present day, pinball no longer wields the influence it once did, but it is probably fair to say that without the allure of the silver ball during the dark days of the Great Depression, the video arcade game industry would have never existed, and the evolution of the interactive entertainment industry would have been vastly different.  Here then, is the history of pinball from its origins through the bingo machines of the 1950s.

NOTE:  Here is another historical interlude, the third in a six-part series on the history of the arcade before the dawn of the video game era.  Principle sources this time around were Automatic Pleasures by Nic Costa, Pinball 1: Illustrated Historical Guide to Pinball Machines by Richard Bueschel, the Encyclopedia of Pinball Vols. One and Two by Richard Bueschel, Pinball! by Roger Sharpe, Bally: The World’s Game Maker by Christian Martels, and the articles “Ballyhoo,” “A Visit With Harry Williams,” “Evolution of the Bumper,” “The Evolution of the Flipper,” and “Pinball Literature (Part 2)” by Russ Jensen.

Bagatelle

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Montague Redgrave’s original Improved Bagatelle Board from 1871, the immediate forerunner of pinball

In the sixteenth century, a wide variety of lawn games gained favor in both England and France that incorporated mallets, balls, arches, and pins.  Perhaps the most prominent of these were lawn bowling and several early variations of what eventually became croquet.  Over time, these games were miniaturized and transformed into table game variations that could be played indoors.  One of the most popular of these new table games was billiards, a croquet variant in which a mallet was used to knock a ball around a table through various scoring arches and holes.  After Louis XIV of France became an avid billiard player, variations of the game began to spread rapidly, including a 1710 version called “Scoring Pockets” in which the scoring holes were protected by pins to make shots more difficult.  In 1777, a further variant incorporated a steeply inclined table and a flat cue stick while featuring a pin layout that made direct shots at the scoring holes impossible.  Instead, the player would shoot the ball up the side of the table, which would then fall back through the nest of pins and, hopefully, land in one of the scoring holes.  Debuted at a party held for Louis XVI of France by his brother, the Comte d’Artois, at the Château de Bagatelle, the new game of bagatelle soon became a sensation.

When France intervened on the side of the colonists in the American Revolution, many French soldiers brought Bagatelle tables with them, introducing the game to what would soon become the United States. The game became fashionable among landed gentlemen in the new Republic and could be found in inns and taverns across the nation.  It also proved popular as a game for soldiers, helping bagatelle spread across the ever shifting American frontier.  By the 1830s, the game was being miniaturized again, transformed into a tabletop game for children.  France and Great Britain dominated this new segment of the industry, while the United States slowly grew to be the leader in bagatelle tables, fueled by the growing number of bars and saloons that accompanied Western expansion.  This process culminated in the work of a British inventor living in the United States named Montague Redgrave. In 1871, Redgrave, then living in Cincinnati, patented what he called his “Improvements in Bagatelle” in which he replaced the clay balls common in toy variants with glass marbles and incorporated a spring-loaded plunger to replace the cue stick.  Redgrave’s improvements allowed the large, bulky table game to be reimagined as a countertop game, which spurred continued growth in the game’s popularity not only as an amusement, but as a gambling device as well.

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The Log Cabin from Caille Brothers, one of the first popular coin-operated bagatelle games

In Europe, where fully automatic games of chance faced greater restrictions than in the United States, bagatelle-style gambling games rose to prominence in the 1890s.  Like bagatelle, these games featured Redgrave-style plungers and a nest of pins, but the playfield sported a vertical rather than a horizontal orientation, which was derived from fairground “drop case” games in which a ball would be dropped onto the playfield and navigate a series of pins before settling into a scoring trough along the bottom of the cabinet.  The first widely popular gambling game of this class was the Tivoli, deployed by leading British firm Haydon and Urry in 1892.  In this game, a player inserted a coin that would come to rest against a spring-loaded plunger.  The player would then launch the coin onto a playfield, where it would navigate through rows of pins before being deposited into one of several troughs.  Some of these would deposit the coin directly in the cash box, four of them would return the coin to the player, and one would trip a lever to deliver a cigar.  In 1900, British inventor John Pessers deployed a popular drop case variation called the Pickwick, in which the player controlled a movable cup and tried to catch the ball after it navigated the pins.  Various drop case games remained in production in Europe into the 1930s.

While the pin-based gambling games of Europe presaged interest in coin-operated bagatelle, their vertical orientation and extra features such as cups ultimately placed them in a different class of product.  The first known coin-operated bagatelle game was developed by Charles Young, a York, Pennsylvania, billiard hall owner.  A former newspaperman, Young had already deployed a cast iron cigar cutter of his own design before turning his attention to the bagatelle table.  In 1892, young patented his “Coin Game Board,” the earliest known device to incorporate an inclined horizontal playfield enclosed in glass and covered in pins, a spring-loaded plunger, and a coin acceptor.  Few inventors followed Young’s lead, but one bagatelle-style game particularly popular in the period was the “Log Cabin” trade stimulator released by Caille Brothers in 1901, which combined the gambling elements of the drop case games with a horizontal bagatelle field.  Bagatelle trade stimulators were largely overshadowed by the more popular slot machines in this period, however, and the penny arcade remained primarily a venue for peep shows and testers, so the appearance of Log Cabin and a few similar games ultimately failed to lead to a wider adoption of coin-operated bagatelle in that time period.  Once the arcade became a place for games of skill in the late 1920s, however, coin-operated bagatelle returned and quickly prospered.

The Birth of Pinball

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Whiffle, the game that launched the pinball craze

Shortly before Christmas 1930, a Youngstown, Ohio, carpenter named Arthur Paulin was cleaning out his barn when he discovered an old board with carved out holes and roughly thirty nails in it. After fiddling around with his discovery for a few days, he came up with the basic design for a Bagatelle-like game he called Whiffle. With Youngstown particularly hard hit by the Depression due to the closing of several steel mills, Paulin’s finances were tight, so he decided to make the new game a Christmas gift for his daughter, Lois. When neighborhood kids began lining up around the house to play the game, Paulin thought he might be able to sell it and approached a friend named Myrl Park, who operated a drug store. Park did not think the game would sell as a consumer product, but figured it might take in good money if transformed into a coin-operated game. Paulin therefore took the board to another friend, electrical salesman Earl Froom, who helped him design a coin slot, a ball return, and a glass enclosure among other features. Completed around the middle of January 1931, the final game consisted of a sloped playfield encased in glass with a series of scoring holes surrounded by pins.   For a nickel, the player received ten balls that he could launch with a spring-loaded plunger that would deflect off the pins and into the holes, which each had a specific point value. The game was test-marketed in Park’s store, and after it took in $2.60 of nickels in a single hour, the three formed a partnership called Automatic Industries on January 28, 1931, to sell the machine all over the country. Before long, they were booking orders for over 2,000 Whiffle games per month, but could not manufacture boards fast enough to meet the demand.

Whiffle was the first coin-operated pin game to be sold in the 1930s, but it was actually the second one developed.  Belgian immigrant George Deprez worked as a janitor in Chicago, but he was a carpenter by trade and interested in building and marketing his own children’s toys.  In the summer of 1929, Deprez created his own marble pin game, and when it proved immensely popular at parties, he had it patented under the name Whoopee, then a hit Eddie Cantor-fronted Broadway show.  The Depression ended Deprez’s hopes of raising capital to sell the new game himself, but in June 1930, Whoopee piqued the interest of a tenant in Deprez’s building, Nick Burns, who ran a shooting gallery and marketed games with his brother through their In & Outdoor Games Company.  Burns bought the rights to the game and placed it on test in several Chicago hotels.  At the Chicago Loop Hotel, the Western Advertising Manager for coin-op trade publication Billboard, Jack Sloan, discovered the game and not only advised Burns to attach a coin slot to the table, but also hooked him up with several local area coin machine industry suppliers to help transform Whoopee into a coin-operated amusement.  First tested in August 1930, Whoopee became the first nationally marketed pin table when Billboard ran an advertisement for the game in its March 28, 1931, issue, with copy written by Sloan himself.

Whiffle and Whoopee were both popular, but they were also expensive — selling for over $100 per cabinet — and their creators were not able to manufacture them quickly enough to keep up with demand.  Together, these two factors opened the door to competition.  Perhaps the most intriguing of the early copycats was Charles Chizewar.  Born in Warsaw and trained as a locksmith, Chizewar immigrated to Chicago in 1916.  After being fired from a job for asking for a raise, Chizewar established his own machinery repair shop in the early 1920s and soon expanded into light manufacturing.  In 1929, he established the Hercules Novelty Company to enter the coin-op field and experienced immediate success with a popular grip tester.  With the arrival of the new pin games, Chizewar deployed his own version in May 1931, the Roll-a-Ball.  Chizewar established an economic model more suitable for the Depression, selling his tables for a mere $16.50 and releasing a version that gave the player five balls for a penny instead of the traditional nickel.  Unfortunately, while Chizewar’s machines were cheap, he could not manufacture them any faster than his competitors — quickly falling behind the demand — and his tables were not well crafted.  Therefore, while the Hercules innovation of penny play proved vitally important to the industry, the company ultimately failed.

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Baffle Ball, the game that launched the pinball industry

Throughout 1931, pin tables were gaining adherents in certain parts of the United States, but a lack of reliable manufacturers served to inhibit the game’s influence and reach.  The man who finally transformed the pin table business from a struggling cottage industry into a dominant force in coin-operated amusement was David Gottlieb.  Born in May 1900 in Milwaukee to Russian Jewish immigrants, David Gottlieb served in World War I and then spent two years at the University of Minnesota. Gottlieb left school in 1920 to work as a movie theater booker and traveling salesman based in Minneapolis before relocating to Dallas, Texas, two years later, where he rode the rails bringing punchboards, pressed paper boards full of holes each containing a slip of paper that listed a cash or merchandise prize, to isolated oilfields. Tired of lugging around suitcases full of coins and sleeping with a gun under his pillow, Gottlieb soon turned to the motion picture business instead, carting a film projector around Texas in a Model T to show films in towns too small to have their own cinema, while also pedaling slot machines and countertop games.  When Texas cracked down on slot machines, Gottlieb acquired the rights to produce a countertop grip tester. On the advice of his childhood friend Al Walzer, who owned a coin-op manufacturer and distributor in Minnesota, he relocated to Chicago, where with a loan from Walzer he formed D. Gottlieb and Company in 1927.

Gottlieb initially worked with Chizewar to manufacture the tester at his machine shop, but when it proved popular, Chizewar established Hercules to sell the machine himself.  Gottlieb subsequently began his own manufacturing operation to create and market a competing product called the Husky Grip Tester. College educated and business savvy, Gottlieb grew his business rapidly, moved into a new modern factory on Chicago’s West Side in 1930, and gained a reputation for a well-run manufacturing operation.  This attracted the attention of entrepreneurs Nate Robin and Al Rest.

Robin, a Jewish immigrant, operated a small coin-op repair shop and refurbished slot machines.  When he first saw Chizewar’s Roll-a-Ball, he realized there could be great profit in designing his own version of the pin game and partnered with Rest, a key player at the Lawndale Sash and Door Company, to create his own version called Bingo.  The pair set up a small manufacturing operation, but like so many others before them quickly fell behind demand.  The pair therefore gave Gottlieb exclusive manufacturing and distribution rights to Bingo, which he completely redesigned to improve the quality and make it easier to manufacture.  First advertised by Gottlieb in September 1931, Bingo proved so popular that not even he could keep up with the orders, so he subcontracted manufacturing to another firm managed by Jack Keeney.

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Jack Keeney, one of the earliest coin-op distributors

Born in Jefferson, Iowa, in 1892, Keeney learned the coin trade early from his father, John B. Keeney, who began operating Mills slot machines at the turn of the twentieth century and established the J.B. Keeney Company, one of the first regional coin-op distributors, to sell machines across Northern Iowa.  When Jack and his brother William entered the business, John Keeney changed the name of his company to Keeney & Sons.  Jack gave up what could have been a promising football career to work for his father at age seventeen after graduating high school and led the expansion of the company into Minnesota.  As the Keeney family continued to grow its business over the next few years, their distribution territory eventually spanned from Detroit to Seattle.  In 1916, Keeney & Sons moved from Jefferson to Chicago to be closer to the coin machine manufacturers and inaugurated a mail order distribution business that allowed the company to sell machines across the entire United States and become the largest distributor in the nation.  John Keeney retired in 1926, but the firm continued to operate under Jack and William until November 1933, when it was terminated.  A new firm, J.H. Keeney and Company, replaced it in January 1934.  In 1931, the Keeney brothers were just starting their own manufacturing operation, so they were happy to take on Bingo for Gottlieb.  With both Gottlieb and Keeney producing Bingo, the pin game soon became one of the leading coin-operated products in the Midwest.

With Bingo proving such a massive hit, Robin and Rest reneged on their exclusive deal with Gottlieb when they were approached by a Chicago tool and die maker named Leo Berman, who started manufacturing the game in competition with Gottlieb.  Unlike Gottlieb, Berman made deals with distributors across the United States to sell the game, allowing the pin game to break out of the Midwest and become a national sensation for the first time.  Faced with this new development, Gottlieb returned to the drawing board and created his own pin game called Baffle Ball, which was better engineered and used higher quality components than Bingo.  He also set up a more efficient manufacturing operation based on the assembly line method that had transformed the automobile industry, making Baffle Ball the first pin game to achieve true high volume production.  Released in November 1931 through Keeney, with a Gottlieb version following soon after, Baffle Ball‘s combination of high quality and assembly line production allowed it to dominate the competition and become the first blockbuster pinball table.  Before long, Gottlieb had taken over 75,000 orders for Baffle Ball, and even at a manufacturing peak of 400 cabinets a day, could only fill roughly 55,000 of them.

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Ray Moloney, the founder of the Bally Manufacturing Company

In 1931, when Whiffle Board and Bingo started spreading around the country, no pinball games were shown at the annual coin machine trade show. In 1932, with Baffle Ball a national sensation, roughly sixty games crowded the show floor, and over one hundred pinball games were introduced over the course of the year. Of the many people to enter the market that year, two stood above the rest: Dave Rockola and Ray Moloney.   A Canadian by birth, Rockola owned a cigar store as a young man, but he moved to Toronto and then Chicago to work in the slot machine industry when he realized that the slot machine at the store counter took in more money than the store itself.   In 1927, he established the Rockola Scale Company to market his own coin-operated scale, which later changed its name to the Rock-ola Manufacturing Company. In the middle of 1932, Rockola released a pinball game called Juggle Ball that gave the player a limited amount of control once the ball entered the playing field via a sliding arm mechanism with a metal bumper that ran through the middle of the cabinet. While this game proved a failure that left Rockola $120,000 in debt, he convinced his creditors to lend him more money to produce a more traditional pinball game, released in August 1933 as Jigsaw, which sold over 73,000 units and became a hit not only in the United States, but in England and France as well. In 1934, Rockola had another huge success with a baseball-themed game called World Series that moved over 50,000 units.

Born in November 1899, Raymond Thomas Moloney, Sr. spent his early adult life
wandering the country while tackling a variety of jobs, trying his luck in the oil fields of Texas and Oklahoma, harvesting crops in California, and working in sugar refineries in the South.  Ultimately, he returned to Cleveland to work in a steel mill where his father served as the foreman. After losing that job, Moloney relocated to Chicago in 1921 where his brother-in-law secured him employment in a print shop making punchboards like those Dave Gottlieb was hauling around Texas.  He became close friends with a co-worker named Joe Linehan, so when Joe and a partner named Charlie Weldt bought out the firm to create the Joseph P. Linehan Printing Company, they placed Moloney in charge of the punchboard operation in 1922. The trio named the new punchboard subsidiary the Lion Manufacturing Company after deciding to make use of stationary ordered from Linehan Printing by a company of that name that had never picked it up.  In 1925, the trio bought out one of the suppliers of prizes for its punchboards and established the Midwest Novelty Company as a subsidiary of Lion to distribute coin-operated products such as slot machines and trade stimulators via mail order.  Moloney served as president of Lion and Midwest Novelty, while his partners remained focused on the printing business.

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Ballyhoo, the game that launched Bally

When Baffle Ball took off, Moloney realized the future of the industry was in pin games — at least in the short term — and attempted to secure a steady supply of Baffle Ball cabinets for Midwest Novelty.  When Gottlieb could not supply games fast enough, however, Moloney hatched a scheme to manufacture his own.  At first Linehan and Welt refused to back a manufacturing operation, but Moloney persuaded them to provide limited funding on the condition that they could pull out as soon as they recouped their initial investment.  All three partners believed they were just taking advantage of a passing fad and planned to end manufacturing when they had cleared $100,000.  In November 1931, Moloney began working his network of coin-op contacts to find a new game design, leading freelance designers Oliver Van Tyle and Oscar Bloom to walk into his office looking for a royalty deal on a new pingame.  Moloney liked their game, but felt the prototype was too plain to sell as is.  To make the table more eye-catching, he designed a colorful playfield based on the cover of the December 1931 edition of satirical magazine Ballyhoo.  Not wanting to risk their existing business, Moloney, Linehan, and Weldt incorporated a new subsidiary of Lion to produce the new machine on January 10, 1932, and named it the Bally Manufacturing Company.  Released under the name Ballyhoo and backed by aggressive advertising, Moloney’s game rocketed Bally to the top of the industry as the firm sold 50,000 units in just seven months.  A second hit, Goofy, followed before the end of the year, and the next year, Bally released a third hugely successful game called Airway that played a critical role in expanding the popularity of pinball to Europe and included the first example of a primitive totalizer, which allowed the player to keep track of his own score.  In Airway, each scoring hole could only be entered once, which would cause a reel to flip and display the value for the hole.  At the end of the game, the player could add up the exposed values to determine his final score.

Several factors aided the rise of pinball to the top of the new coin-op amusement industry. First, unlike most contemporary coin-op games like the elaborate diggers and Chester-Pollard sports games, pinball cabinets were cheap. Ballyhoo and Baffle Ball only cost $16.50 per unit, and machines from smaller outfits could run even cheaper. Therefore, even at the height of the Depression a would-be operator could scrape together the funds to buy a few machines and enjoy a significant return on investment via coin drop.  Indeed, a significant number of entrepreneurs lost their businesses in the early years of the Depression, but did not necessarily forfeit their entire savings, and many of them invested in pinball machines and other countertop games to make a living, leading to a surge in operators and jobbers of coin-operated equipment.  Furthermore, pin tables were small and able to fit on a countertop, making them suitable for many different types of business establishments desperate to try anything to lure customers into their shops.   Finally, with no moving parts other than the plunger, early pinball machines were easy to keep in working order.   As a result, pinball could be found nearly everywhere, not just in Sportlands, arcades, and amusement parks, but also in roadside stands, bus and rail depots, gas stations, cafés, drug stores, tobacco stores, and barber shops. The game received its biggest boost, however, when Prohibition finally ended in 1933 and pinball became a staple of the bars and taverns that could once again operate legally.

Pinball Evolves

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Harry Williams, brilliant pinball innovator

With pinball so popular and competition so fierce among the two hundred or so companies that released at least one pinball machine during the 1930s, it did not take long for the simple game to become increasingly sophisticated as engineers began looking for any edge to help them stand out from the crowd.  As a result, by the end of the 1930s, pinball had evolved from a small, simple game with few moving parts to an action-packed electromechanical exhibition of flashy sights and sounds.   Several people and companies contributed to this transformation, but the most important pinball innovator of the decade by far was Harry Williams.

Born in New York City in 1906, Williams moved with his family to Los Angeles when he was fifteen years old. Although he graduated from Stanford with an engineering degree, Williams took employment as an artist in the advertising industry, but found himself out of work with the advent of the Depression in 1929. He supported himself by turning to carpentry, set design, and the occasional bit part in Hollywood films, but the recently married engineer had great difficulty making ends meet.  Desperate for a better source of income, Williams answered an ad offering sales of a new coin-op game called Jai-alai, in which the player attempted to flip a cork ball into a basket.  The salesman for the game convinced Williams that all he needed to to was plop a game on location and financial success would follow, so he bought five of the $100 machines, which used up all his savings.  In reality, his machines fared poorly.  Some time later, Williams observed a long line of people waiting to play Whiffle Board in a lunchroom near Universal Studios and realized he had backed the wrong horse, but at this point he had no money to buy any more machines. He therefore decided to try building his own pin game and bought out the owner of a company called Automatic Amusements in early 1933.
Williams’s first product was a replacement board for a Mills game called Official that he sold for five dollars and could be substituted in existing cabinets. He then created his first original game in the second half of 1933, Advance, which he sold to Seeburg. Advance contained the first of many Williams innovations: a metal ball on a pedestal that would dislodge if the player banged on the cabinet too forcefully in an attempt to make his ball enter a scoring hole.   According to Williams, he initially called this innovation the “stool pigeon” until he observed a patron exclaim, “Damn it, I tilted it” after activating the device and decided it should be called the tilt mechanism, though this story may be apocryphal. Regardless of the origin of the name, the tilt soon became a standard device on all pinball machines, although later games replaced the ball with a pendulum device. Despite the innovation, Advance did not sell particularly well, and Williams received little in royalties on the game from Seeburg.

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Contact from Harry Williams and Pacific Amusement, the game that set pinball on its modern path

With the failure of Advance, Williams entered a period of financial difficulty and felt that he needed to create something particularly innovative to survive in the coin-op business. After contemplating the problem for some time, he finally had a eureka moment when he decided that the ball should have more “action” and that he should use electro-magnets to provide it. The game Williams crafted around this idea, called Contact, used a device called a solenoid, a coil with a magnet inside that creates opposing magnetic fields when energized with electricity, to kick the ball back onto the playfield once it entered a scoring hole, giving the player an opportunity to score more points. Williams used dry cell batteries to power his game and created a large cabinet that stood on its own legs rather than resting on a countertop, both uncommon features that would soon became standard in the industry. To manufacture the game, Williams turned to a former carburetor manufacture named Fred McClellan who had recently entered the pin game business through a new venture called Pacific Amusements. The game proved successful almost immediately, leading to constant sales calls and an idea for a practical joke. With McClellan’s phone ringing all the time as new orders came in, someone in the showroom decided it would be funny to hook up an electric doorbell to one of the solenoids in one unit so that when the ball was ejected back onto the playfield a bell that sounded just like McClellelan’s telephone would ring and he would rush to answer it. The bell proved to be an excellent attraction feature and became a standard component on the increasingly popular game. Originally able to only produce about ten units of Contact a day, Pacific Amusement opened a new Chicago plant in Spring 1934 and eventually sold over 23,000 units priced at $75.00 each. While Contact was not the first pin game to include electricity, playfield action, a tilt mechanism, or sound effects, no other game had included all of these features in one package.  Contact, quite simply, redefined the game.

In 1935, Williams left Automatic Amusements in the care of his father and headed to Chicago to work for Rockola.  While there, he designed a game called Flash that featured the first instance of a feature that would become central not only to pinball, but also to video games, the awarding of an extra play when the player reached a certain score.  The idea came about because Williams wanted to create a reward that did not involve a payout, a new fad sweeping the pinball industry that Williams was dead set against, and was implemented by a young assistant named Bill Bellah, who came up with the actual mechanism to make the concept work after four weeks of tinkering.  A mechanical genius, Bellah might have become one of the great pinball designers, but just a few months later he suffered a serious head injury during a mugging and had to be committed to an asylum.

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Bumper from Bally, the game that popularized the bumper and totalizer scoring

Electricity spearheaded additional innovations on pinball machines, with the most important coming from a small Utica, New York, manufacturer called the Pacent Novelty Manufacturing Company. In 1936, an inventor named W. Van Stoeser created a completely new scoring device called the bumper, which Pacent incorporated into a bowling-themed game called Bolo. The game simulated knocking down ten pins represented by the bumpers, ten long, thin rods attached to coil springs. The goal was to make contact with every bumper, and each time the ball hit one, a corresponding pin on the backglass of the cabinet would light up to indicate that the pin had been knocked down. The new bumper concept proved immediately popular, but Pacent did not have centralized manufacturing capability and had to farm out the building of the game to several local companies, leaving an opening for others to fill the void. As a result, when Bally’s Ray Moloney saw the game in operation, he charged a man named Donald Hooker to develop an improved bumper for Bally, which was incorporated into a 1936 table called, appropriately enough, Bumper. Unlike Bolo, Bumper used traditional pinball scoring with bumpers replacing pins and holes and popularized the totalizer method of keeping score, in which a score reel on the backglass updated each time the ball made contact with a bumper.  Bally’s Bumper game helped move pinball forward in exciting new directions, but another innovation by the company proved to be a giant step backwards.

Pinball Backlash

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New York Mayor Fiorello LaGuardia topples a pinball machine confiscated by the NYPD

In 1933, a New York distributor named Herman Seiden added a dry cell battery to a Bally Airway table in order to power a connected payout slot, which would dispense money if the ball landed in the proper scoring holes.  Seiden shared his innovation with Bally, leading company engineer Herb Breitenstein to develop a game called Rocket, the first purpose-made gambling pinball machine.  The table proved such a massive hit that Moloney decided to buy out Linehan’s and Weldt’s shares of Lion and its subsidiaries and fully commit the company to coin-op manufacturing.  Soon, all the major pinball manufacturers were releasing payout machines alongside their regular games. With the success of these prize games, Ray Moloney took further steps to bring Bally into the coin-operated gambling business with the introduction of two full-fledged gaming machines in 1936, an automatic dice machine called Reliance and the company’s first slot machine, Bally Baby. The success of these machines convinced Moloney to fully enter the gaming business with a full line of slot machines, further blurring the line between coin-operated amusements and coin-operated gambling and setting up the pinball industry for serious difficulties.

Even without payouts, pinball had already been attacked in many circles as a game that incited juvenile delinquency and petty crime and corrupted the youth. Now with the gambling connection as well, it drew attention from crusaders against organized crime, which had already taken advantage of the cash only nature of the slot machine business to take in large sums of untraceable money to fund other illicit operations. With slot machines already pushed to private clubs and casinos by law enforcement efforts to wipe out the industry, politicians believed that pinball machines were an attempt by organized crime to circumvent laws against slot machine operation, and the move to payout models only reinforced these suspicions. As a result, newly elected New York City Mayor Fiorella LaGuardia launched a campaign against pinball machines in 1934 as part of his larger fight against organized crime and began confiscating machines all over the city, while Chicago, the center of the industry, became the first major city to enact a complete ban on the operation of the machines in 1936, with Los Angeles following suit in 1939.   A group of pinball operators subsequently challenged LaGuardia’s actions in court, leading to a major victory for the New York City mayor in 1942 when New York Supreme Court Justice Aaron Levy upheld an earlier ruling from a magistrate that pinball machines were gambling devices and therefore properly subject to seizure. The ruling effectively made the operation of pinball machines illegal in New York City, although they were not formally banned by the city council until 1948.  As a result of these actions, pinball manufacturers and operators would be linked with organized crime in the public mind and be forced to wage constant battles over the legality of pinball for more than thirty years.

While the long-term effects of pinball being linked to organized crime were devastating, the entry of the United States into World War II in December 1941 provided a more immediate threat to the industry. With raw materials and parts needed for military production, the government effectively banned the manufacturing of new pinball machines by deeming the amusement industry non-essential to the war effort, so the major pinball manufacturers turned to war-related work for the duration. To fill the void, a small number of designers began creating refurbished games by recycling old cabinets and parts and combining them with new playfield designs. One of the leaders in this field was consistent pinball innovator Harry Williams. While working for Rockola, Williams met a young engineer named Lyndon Durant who quickly impressed him with his design for a new type of score totalizer. The duo left Rockola for Bally in 1937 and then joined Exhibit the next year, but with the start of the war they decided to go into business for themselves and established the United Manufacturing Company in 1941 both to refurbish old games and to seek out lucrative war contracts. In 1942, however, Williams decided to strike out on his own and sold his share in United back to Durant. The next year, he established the Williams Manufacturing Company, which refurbished old games and built radar components for the remainder of the war.

The Flipper 

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Humpty Dumpty from Gottlieb, the first flipper pinball game

With the conclusion of World War II in 1945, the coin-op companies returned to pinball once more and soon began taking the game in new directions.  In 1948, Williams introduced a new type of bumper in its Saratoga game called the pop bumper that would violently kick the ball in a new direction when it made contact, which provided considerably more action on the playfield.   More importantly, however, Gottlieb’s chief designer, Harry Mabs, came up with an idea for a new type of bumper in 1947 he called the flipper bumper that would bat the ball in a new direction when activated. In November 1947, Mabs’s new bumpers debuted on his Humpty Dumpty machine, which featured three pairs of flippers on different parts of the playfield. On the original prototype, these flippers would activate automatically when the ball made contact with a switch, but Mabs discovered that it was more entertaining for the player to activate the flippers himself by pressing a button. This simple tweak transformed pinball from a game of pure chance into one that could be influenced by the skill of the player, and the entire industry immediately recognized that flippers could be the salvation of pinball and insulate the game from accusations of being a gambling device operated by organized crime. Consequently, all the major companies quickly released flipper games into the market, which became so popular that non-flipper games were rendered obsolete nearly instantly. While every company experimented with varying numbers and locations for their flippers, however, a standard configuration soon emerged from one of the smaller companies in the industry named Genco.

Brothers Louis, Meyer, and David Gensburg established Genco Incorporated in Chicago in 1931 to produce coin-operated amusements. Rather than innovate in coin machines, Genco prided itself on taking concepts developed by other companies and then building higher quality versions to carve itself a niche in the crowded pinball market.  The company’s primary pinball designer throughout the 1930s and 1940s was an engineer named Harvey Heiss, but when Humpty Dumpty hit the market, Heiss was in the hospital, and it fell to his young assistant Steve Kordek to complete a new flipper game for the company.   Kordek had only entered the pinball industry by chance in 1936 after dropping out of college to support his family during the Depression and being offered a job at the company while taking shelter from a rainstorm in Genco’s doorway. Kordek started as a solderer on the assembly line, but because he had previously worked at Zenith in high school and studied circuitry during his one year in college, he soon used his knowledge to help the game testers fix faulty designs and was placed in the engineering department as an electrician.   Heiss then took Kordek under his wing and taught him every aspect of making pinball games. The owners of the company therefore came to Kordek with Heiss incapacitated and told him to have a flipper game ready by the coin show in January.

With so little time, Kordek copied Mabs’s basic flipper design, but because Genco was a small company and Heiss had taught Kordek to be conservative in his use of parts, he decided to include only two flippers at the bottom of the playfield. Even more importantly, Kordek chose to power the flippers using direct current rather than alternating current as Mabs had done.   As a result, Kordek’s flippers were far more powerful and could propel the ball across the table unlike the weaker ones used by Gottlieb. Released as Triple Action, Kordek’s game featured flippers that faced out from the center of the table, unlike in modern tables, but in 1950, Mabs created a game for Gottlieb called Just 21 in which the flippers faced inwards, bringing pinball machines to the basic form they still exist in today.

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Bright Lights by Bally, the first bingo machine

Between flippers and pop bumpers, pinball changed radically once again as the ball ricocheted around the table at high speeds and the player did his best to keep the game going through a well-placed flipper shot. By this time, however, the reputation of the game had already suffered considerable damage due to payout machines, and it had been shut out of many major cities around the United States. Indeed, not long after the first flipper machines were hitting the market, the industry became the focus of negative attention again as Bally introduced the first Bingo machine in 1951, Bright Lights. Unlike flipper games, Bingo machines required the player to try to complete a successful bingo by launching the ball with the plunger and hoping it landed in the proper holes. A bingo resulted in the player winning a prize, making this new form of pinball a gambling machine designed to bypass the restrictions on earlier forms of payout machines.  These new machines did not escape notice for long.

In 1951, the United States Congress decided to involve itself in the war on coin-operated gambling through the passage of the Johnson Act, which made it a federal offense to transport gambling devices to states where they were illegal, which at the time meant every state except for Idaho and Nevada.   The original definition of the term “gambling device” in the bill centered on slot, roulette, and crane machines, but as bingo machines continued to spread in the 1950s, the United States Supreme Court ruled in 1957 that pinball machines designed to deliver a cash payout were, in fact, gambling devices. As a result, when the House of Representatives looked to expand the definition of gambling devices found in the original Johnson Act in 1962, it proposed the outlawing of pinball entirely, though after the bill went to the Senate a compromise was reached that led to the final bill only restricting payout pinball machines instead.  As a result of this continuing negative attention, however, pinball, while remaining an important part of the coin-operated amusement industry in the 1950s, no longer held the central place it had enjoyed in the 1930s and 1940s. In its place came a series of novelty products that spent a year or two as the hot new game in the field before ultimately being eclipsed by something else.  This cycle would define the industry for the next two decades, until it was finally broken by the rise of solid state pinball machines and video games.

Historical Interlude: The History of Coin-Op Part 2, From Slot Machines to Sportlands

Between 1895 and 1905, the penny arcade enjoyed a preeminent position in the entertainment world.  Marcus Loew, who would later establish the Loews theater chain and forge MGM, ran an arcade, so did Adolph Zukor, who established Paramount Pictures, and William Fox, who gave his name to 20th Century Fox.  The peep show dominated the arcade, and American Mutoscope dominated the peep show.  But William Dickson and Henry Casler were never the type to rest on their laurels.  In 1896, two years after completing the Mutoscope, Casler, at Dickson’s urging, developed the Biograph, a projector that allowed film to be displayed on a large screen rather than in a tiny wooden box.  The Biograph was not the first film projector — the project was implemented to counter the Edison-backed Vitascope and the Lumière brothers were already making their first films for display via the Cinematograph in France — but American Mutoscope, renamed American Mutoscope and Biograph in 1899, was far better funded than most of its competitors and took an early lead in film projection.  By 1908, three years after the first nickelodeon opened in Pittsburgh, D.W. Griffith was making short films for American Mutoscope and Biograph, and not long after that Mary Pickford and the Gish sisters were starring in them.  Men like Zukor and Fox abandoned the arcade for the promise of the new motion picture business, and even American Mutoscope chose to distance itself from its roots, shortening its name to American Biograph in 1909.  The penny arcade boom was over.

But coin-operated entertainment did not die.  Just as the peep show fell out of favor, new advances in engineering resulted in the first practical fully automatic payout gambling machines.  As popular as it was controversial, the advent of the “one-armed bandit” brought coin-op companies like Mills and Caille Brothers ever increasing profits and the industry an ever increasing stigma it would take decades to finally shed.  As slot machines became increasingly regulated and pushed to the fringes of lawful society by the early 1920s, however, coin-op companies old and new began injecting a degree of skill into their games of chance.  By the beginning of the 1930s, this trend culminated in three brothers developing a whole new arcade concept, the Sportland, which focused on games rather than novelty attractions or peep shows, signifying a paradigm shift within the industry.

NOTE:  And here is part two of my six-part overview of the first hundred years of the coin-operated amusement industry.  Principle sources this time around were Automatic Pleasures by Nic Costa, Arcade 1: Illustrated Historical Guide to Arcade Machines by Richard Bueschel and Steve Gronowski, Pinball 1: Illustrated Historical Guide to Pinball Machines by Richard Bueschel, the article “‘Sportlands’ Seen as Evolution of the Penny Arcade” in the April 1932 issue of Automatic Age, the article “The Fun Machines” in the July 4, 1977, issue of Sports Illustrated, and the article “Penny Arcade Philanthropist” in the October 16, 1948, edition of The New Yorker.

The Rise of the Slot Machine

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A Sittman and Pitt five-reel poker machine, the precursor of the modern three-reel slot machine

Unlike the coin-operated amusement industry, which originated in Europe, the coin-operated gambling industry was a largely American phenomenon.  This is because games of chance already had a long history in Europe before the advent of coin-operated machines, and consequently so did anti-gambling laws.  In France, gaming for money had been prohibited by Louis XVI in 1781 by an edict that had survived the Revolution and the many governments that followed, while in England acts of Parliament passed in 1853 and 1854 severely limited the operation of automatic games of chance.  Gambling games were still developed, of course, but the drop case games and allwins of Europe (briefly covered in a later post) were of an entirely different character than the machines that took over the United States, where gambling laws were fairly lax in the late nineteenth century, and the design of coin-operated gambling games flourished.

The earliest coin-operated gambling games were counter top models referred to as “trade stimulators” that usually sat on the bar of a tavern or next to the cash register at a store and gave a patron the chance to wager some of his spare change for the chance to win a prize such as a cigar or a piece of candy.  The earliest known machine of this type was the Guessing Bank, developed by New Yorker Edward McLoughlin in 1876, in which inserting a coin would cause a dial to spin and stop on a random number.  The patron would guess the number the dial would land on before inserting his penny and win a prize if he was correct.  Like other coin-operated devices, however, the trade stimulator did not see wide distribution until the late 1880s.  A variety of trade stimulators were developed in Europe during this period, but the spinning dial machine, which entered general use after British inventor Anthony Harris designed a wall-mounted version in 1889, remained the most popular.  Before long, however, a new type of trade stimulator gave it a run for its money.

In 1890, Frank Smith of the Ideal Toy Company of Chicago introduced a new machine designed to automate the card game poker, which had first risen to popularity in the United States in the 1830s.  Smith’s machine consisted of five reels that each featured a series of playing cards painted on them.  When the patron inserted a coin, the reels would spin and each stop on a random card, which the patron hoped would result in a winning hand.  If the player won a prize, he could collect it from an attendant.  In 1893, the Brooklyn firm of Sittman and Pitt introduced its own card machine, which has been recognized as the first coin-operated gambling game to achieve national popularity in the United States.

By the middle of the 1890s, the trade stimulator had been joined by another type of coin-operated gambling device, the slot machine, which distinguished itself from other early gambling devices by featuring an automatic payout of a cash prize.  The first slot machine was developed in Syracuse, New York, by John Lighton in 1892.  In this machine, the coin inserted by the player would travel down one of two runways, either being deposited in the machine’s cash box or tripping a lever that caused two additional coins to be released and paid out to the player along with his original coin.  In 1893, an inventor in San Francisco named Gustav Schultze combined the slot machine with the spinning dial concept in a device he called the Automatic Check Machine, in which the player pulled a lever on the side of the machine that caused a dial to spin atop a colored wheel.  If the dial landed on a winning color, a bell would ring and two coins would be released to the player alongside a token with a random value between twenty-five cents and two dollars.  Spinning dial slot machines became very popular over the next two years, but they were ultimately superseded by a new machine invented by a man named Charles Fey.

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Charles Fey, developer of the first popular three-reel slot machine

Born in Vohringen, Bavaria, in 1862, Fey clashed with his father, a strict school master and an officer in a conservative church, so he left home at the age of fifteen to seek his fortune.  After spending five years in London as an apprentice instrument maker at a shipyard, Fey saved enough money to immigrate to the United States.  Arriving initially in Hoboken, New Jersey, in 1882 and settling for a time in Wisconsin, Fey relocated to San Francisco in 1885 to serve as a model maker for California Electric Works.  In 1894, Fey left the company with a fellow employee named Theodore Holtz to establish Holtz and Fey Electric Works to go into direct competition with their former employer. At the time, San Francisco was home to a large number of saloons — a legacy of the gold rush in the 1850s — and was also at the heart of the poker craze that had swept the United States, so the city became a major venue for the five-reel card machines just coming into vogue.  Both Fey and Holtz became enamored with these new machines, but ultimately decided to part ways, with Holtz establishing his own company and Fey briefly going to work for slot machine pioneer Gustav Schultze before striking out on his own.  Working in the basement of his apartment building, Fey designed his first gambling machine, called the Horseshoe, in 1894, and a second machine called the 4-11-44 in 1895a form of lottery machine in which patrons lined up sets of numbers to win prizes. When these machines proved popular, Fey established Charles Fey and Company in 1896 to focus on the slot machine business.

Fey’s major breakthrough was to combine the two principle gambling attractions of the time: the slot machine and the card machine.  Card machines were incredibly popular, but they could not automatically grant a reward, greatly decreasing their utility.  Early slot machines could provide a payout, but lacked the excitement of the card games.  Fey therefore decided to add an automatic payout mechanism to the five-reel poker machine, but the mechanical challenge proved too difficult.  Fey’s solution was to pare down the number of reels on his machine to three. Originally manufactured as the Card Bell sometime between 1898 and 1905, Fey quickly decided to replace the pictures of cards on the reels with images like stars and bells since the player was no longer attempting to complete a poker hand and changed the name to the Liberty Bell. The combination of spinning reels and automatic payout proved irresistible, and the Liberty Bell soon became a sensation in the San Francisco area.  The machine did not spread beyond the city, however, as Fey had no desire to mass produce and sell his invention, instead making deals with bar owners to install slots for a fifty percent take of the coin drop. This situation persisted until the disastrous 1906 San Francisco earthquake, during which Fey’s workshop burned to the ground.  This loss left a vacuum in the three-reel slot machine business that was quickly filled by the Mills Novelty Company.

As discussed previously, Mills released its first slot machine in 1897, a spinning dial machine called the Owl, one of the earliest models designed to stand on the floor rather than on a counter top.  Two years later, a New York manufacturer named Mathias Larkin created a similar machine called the Admiral that was the first slot machine to be advertised nationally and featured an image of Admiral George Dewey, extremely popular after his victories in the Spanish-American War, to help spur sales. Impressed with Larkin’s work, Herbert Mills hired him to open a San Francisco office and serve as his company’s promotional manager. It was no doubt through this branch office that Mills first became aware of Fey’s Liberty Bell.  What happened next between Fey and Mills differs based on who tells the tale.  Fey and his descendants claim that Larkin took one of Fey’s machines from a local tavern so that Mills could copy and steal the design.  The Mills family, on the other hand, states that Fey came to Chicago and offered to turn the design over to Mills in return for receiving the first fifty machines off the assembly line at no cost.  As Fey lost the ability to build his own machines in the earthquake and Mills already had a history of buying up the rights to products from other inventors, the Mills version feels more plausible.  Either way, the Mills Liberty Bell entered mass production in 1907.

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The Mills Bell Machine, which brought the three-reel slot machine to prominence

With the Liberty Bell finally becoming available nationwide, the popularity of three-reel slot machines soared, completely displacing the earlier dial machines and leading the larger manufacturers in the coin-operated amusement business to concentrate almost exclusively on slots. Taking advantage of its head start over the competition, Mills built a commanding lead in the market that would last until the early 1960s. Caille Brothers also quickly embraced the “one-armed bandit” and competed closely with Mills until the end of World War I, when the Detroit company began to fall behind.  Mills’ closest competitor thereafter was a manufacturer named Ode Jennings. Born in Kentucky, Jennings entered the coin-op business by moving to Chicago in 1901 to become a salesmen of penny-arcade machines and first gained notoriety through managing the Mills arcade at the 1904 St. Louis World’s Fair. In 1907, he established the Industry Novelty Company in Chicago to deal in used slot machines, vending machines, and scales, which he would often modify with features of his own design. Industry began manufacturing its own slot machines in 1911 and changed its name to O.D. Jennings and Company in 1928. With Mills, Jennings, and more distant competitor Watling all based out of Chicago, the Windy City became the center of the coin-operated gambling and amusement industries by the late 1920s.

As slot machines continued to grow in popularity throughout the first decade of the twentieth century, a backlash began to develop against the machines, which were seen in many circles as nothing more than a way for shopkeepers and saloon owners to cheat honest patrons out of their money. As a result, San Francisco, the original center of the industry, banned slot machines that dispensed a cash payout in 1909, and the entire state of California followed suit two years later. This signaled the beginning of a series of widespread bans that soon left slot machines illegal in most of the country. The beginnings of Prohibition in 1920 further stigmatized the slot machine, as speakeasies that were engaged in illegal activities anyway often included the devices on their premises and the cash-only nature of the business quickly attracted organized crime. Manufacturers were also hit hard by the onset of Prohibition, as bars and saloons had been the primary venue for slot machines, and the closing of these establishments left a hole that other businesses could not entirely fill.  While the slot machine industry attempted to compensate for these setbacks by producing machines that awarded prizes of candy and gum instead of money, shops that operated slot machines faced the constant threat of confiscation and other legal action. With slot machines and trade stimulators under attack and pushed to the outer margins of the law by the mid-1920s, several entrepreneurs began emphasizing skill-based elements in their products so they could argue the machines were not purely games of chance.  This move ultimately helped revive the penny arcade.

Coin-Op Amusements Make a Comeback

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An Exhibit Supply True Love Letter card vendor

The 1910s were a hard decade for the coin-operated amusement business.  With the rising popularity of the cinema and the far cheaper production costs of film projection versus peep shows, American Mutoscope and Biograph halted all production of both Mutoscope machines and films in 1906.  With the Mutoscope overthrown, arcades had to rely more on their novelty pieces like testers and shockers to draw clientele, but there were only so many ways to build a strength machine or a scale, so without the attraction of new peep shows, there was little reason to come to the penny arcade — unless you were looking for one of the racier films in a seedier location.  World War I and Prohibition killed off most of what remained of the business, the former curtailing the development of new machines and the latter closing the bars that had been the prime venue for testers even before they incorporated coin control.  The smaller companies in the arcade business could not survive the temporary halt of new machine design brought on by the war, and most of them went out of business.  While the larger companies survived, they also abandoned the dwindling arcade scene.  Rosenfield Manufacturing left the coin-op business entirely to create electrical appliances like vacuum cleaners, while Caille Brothers turned its entire focus to slot machines after Arthur Caille died in 1919, as Adolph Caille had never really liked the arcade business in the first place.  In 1929, Caille began building outboard motors alongside its coin-op production, and in 1937 Adolph Caille sold the firm to a rival motor manufacturer.  Only Mills continued to offer a full line of arcade equipment, but it also now focused on slot machines and did not create new arcade pieces, merely continuing to sell its existing line.  Just as everyone else was abandoning the arcade, however, one man decided the time was ripe to move in.

John Frank Meyer was born in Peoria, Illinois, in 1881.  Entering the printer’s trade, he established his own small printing shop in Chicago before joining a firm called the Exhibit Supply Company in 1907 as a partner.  Organized in 1901 as a postcard printer, Exhibit expanded its line rapidly after Meyer joined to become the largest supplier of printed cards for fortune tellers, horoscope machines, and all the other types of card vendors found in the penny arcade.  Meyer took full control of Exhibit in 1910 and moved the firm into building its own card vendors in 1914.  As the penny arcade approached the nadir of its decline, it actually became a somewhat fashionable spot for young couples to have a risque night out viewing lewd peep shows and purchasing printed love letters from card vendors as souvenirs.  By 1917, partially aided by soldiers flocking to city night life to take their girls out one last time before shipping off “over there,” Exhibit card vendors enjoyed enormous popularity and became a key component of the shrinking penny arcade business.  After World War I, Meyer decided to introduce a full line of arcade machines and hired Perc Smith, a former production manager for the Meade Bicycle Company and salesman for Mills Novelty with strong credentials in manufacturing, sales, and arcade operation, to sell them.  Together, Meyer and Smith built Exhibit Supply into the most important arcade equipment manufacturer of the 1920s.

While the marginalization of the penny arcade and the closing of the bars seriously wounded the industry, companies like Exhibit continued to hang on by transforming the nature of the business.  The increasing popularity of the automobile after the introduction of the Ford Model T in 1908 ultimately led the Federal Government to pass the Federal Aid Highway Act of 1921 to connect much if the United States by road.  Whereas in the past coin-op sales to smaller towns and rural areas had been factory direct and limited to a small number of saloons and hotels that would pick up their machines at the local train station, the rise of pickup truck delivery services opened up a wider array of small locations like grocery stores, restaurants, barbershops, and candy stores to coin-operated amusements.  By the mid-1920s, this led to a development of a new middleman in the coin-operated amusement business, the regional distributor, who would order machines from several manufacturers in large volume and sell them to operators that would maintain machines in multiple locations along a truck delivery route.  The operator would be responsible for keeping these machines in good repair and would split the coin drop with the owners of each location along the route to recoup the purchase price.  This manufacturer-distributor-operator model of selling coin-operated amusements would persist for decades.

Just as the coin-operated amusement industry was extending its reach into new areas through regional distribution, the increased regulation of the slot machine and trade stimulator lured a variety of new players to the market that were eager to keep the coin-operated gambling industry alive through injecting a degree of skill into their games of chance.  One of the first manifestations of this trend was the counter top gun game, in which the player would generally insert a coin into a slot that served as a bullet that the player would attempt to shoot into a scoring hole at the back of a glass-covered playfield in order to win a prize. In the early days of the industry, this would be a cash prize, but as gambling devices came under greater scrutiny, this was usually changed to candy in an attempt to avoid confiscation. While this type of trade stimulator dates back to a model created by Englishmen David Johnston in 1889 and achieved popularity in the 1890s, it did not become an arcade mainstay until a man named Walter Tratsch introduced his version to the industry.

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Target Skill by A.B.T. Manufacturing, one of the first popular skill-based coin-operated amusements of the 1920s

Tratsch’s association with the coin-op industry began in 1902 when he joined with Frank Mills, a brother of the founder of the Mills Novelty Company and the man in charge of its East Coast operations, to run a penny arcade in Hoboken, New Jersey. Like slot machine manufacturer Ode Jennings, Tratsch operated arcade machines at the St. Louis World’s Fair in 1904, and he also partnered with Mills to run Owl and Admiral slot machines in the years before his company began mass-producing the Liberty Bell. After operating machines in Panama and Argentina starting in 1908, Tratsch came to Chicago in 1910 to open his first plant, which specialized in machine repair and parts fabrication for the coin-op industry. A trip out West to partner with Charles Fey followed in 1913 before he returned East in 1915 to partner with an acquaintance first met when they were both running coin-op machines at the St. Louis World’s Fair named Jack Bechtol, with whom he established the Diamond Confection Company and the Southern Confection Company in South Carolina to operate coin-op routes in the South. In 1919 the duo established a new company in Memphis that morphed into the A.B.T. Manufacturing Company when another long-time friend of Tratsch named Gus Adler invested in 1921. The company was named by combining the initials of the three owners, though Adler sold out his interest to a Chicago financier named Bill Gray two years later.  This company perhaps made its biggest mark on the industry through the introduction of an early coin chute, which required a coin to travel down a ramp before activating a machine and therefore made slugging much more difficult.

In 1925, A.B.T. relocated to Chicago and debuted one of the most important coin-operated machines of the 1920s, a countertop pistol game called Target Skill. Like earlier gun trade stimulators, Target Skill featured a glass-protected target area housed within a wooden cabinet, but unlike these earlier machines, the game provided five small steel balls as ammunition for the cost of a penny. The objective was to shoot these balls into five target holes of decreasing size, with each direct hit causing a flag to drop over the target. Unlike slot machines, there was no payout mechanism attached to the machine, making it a pure game of skill free of the legal challenges and confiscation hassles plauging most countertop devices. An instant success, Target Skill games were soon being produced at a rate of 2,000 a month as sales reached 40,000 units within a decade. Once the popularity of the game was well established, A.B.T began releasing variants that featured different playfield configurations and/or more prominent payout elements. These included the popular Big Game Hunter, in which a successful hit on one of the three targets would cause a slot machine reel to spin and lining up the proper targets would allow the player to obtain prizes such as a small cash payout or a pack of cigarettes from the operator, and the Challenger, which provided ten shots for nine scoring holes. A.B.T. continued to sell variations on Target Skill until the early 1960s and manufactured over 300,000 of them during that time. As one of the earliest coin-operated products to gain widespread popularity by focusing primarily on player hand/eye coordination and skill rather than on strength/endurance testing, vending, or random chance, Target Skill represented one of the first attempts to move coin-operated products from novelties and gambling concepts to actual games, paving the way for a major paradigm shift in an arcade industry that had remained stagnant for nearly two decades.

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The Erie Digger, which launched the first crane game boom

A second concept particularly important to reviving the arcade was the coin-operated digger, or crane, machine, which like the new target shooting games combined elements of both skill and chance.  Sources differ on when exactly the first digger machines entered the marketplace, but most evidence points to the first models appearing in 1924. In that year, Norwat Amusement Devices introduced the Steam Shovel, while the Erie Manufacturing Company began selling its Erie Digger, which dominated the market into the early 1930s. By 1926, digging machines had become standard fare at boardwalks and amusement parks, but were particularly attractive for traveling carnivals due to their compact size and relative simplicity. In fact, it was a carnival concessions operator named William Bartlett who introduced the next important advance in crane games in 1926 with his popular Miami Digger, which allowed the patron to move the crane all around the inside of the box rather than just up and down as in earlier models.   Unlike Erie, Bartlett did not mass produce and sell his machines, but instead dispatched licensed agents to travelling carnivals around the United States and Canada, who would operate banks of 12-17 units on his behalf.  By the time Bartlett died in 1948, over forty operators were supplying cranes to all the major carnivals in North America.  While crane machines only vended candy at first, it did not take long for operators to offer silver dollars, paper currency, and bundles of coins wrapped in cellophane as prizes instead.

With the success of Target Skill and the carnival diggers, an array of new coin-operated games appeared in the late 1920s.  Exhibit Supply remained in the forefront of the market by readily embracing new machine concepts.  These included a popular crane game called the Iron Claw that debuted in 1927 and a target shooting game called Automatic Pistol Range launched in 1929 in which one or two players shot at targets mounted on a motorized carriage that rolled across a playfield housed in a large wooden cabinet.  Even Mills released a new punching bag strength tester in 1926.  Perhaps the most surprising return of the decade, however, was the Mutoscope, brought back by a businessman named William Rabkin.

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William Rabkin, the founder of International Mutoscope

Born in 1894 in Babruysk, then part of Russia now part of Belarus, Welvel Rabkin — clerks at Ellis Island made him a William — entered a trade school at the age of twelve and spent three years learning how to be a machinist.  Rabkin’s father ran a modestly successful wholesale farm produce business until a warehouse fire bankrupted him, and he immigrated to the United States to work as a garment presser in New York City.  After becoming established there, he sent for the rest of his family, who joined him in 1909.  After stints as a plumbers apprentice and electrician’s helper, Rabkin finally found work in a machinist shop.  Several years later, he and a partner established their own shop.  After a falling out, however, Rabkin sold his interest in the shop and looked for another business involving machines.  This quest led him to American Biograph and the Mutoscope in 1920.

Once a leader in the film industry, Biograph fell on hard times in the 1910s.  In 1908, the company joined with Edison to form a trust called the Motion Picture Patents Company that dominated film distribution and limited production to a small number of allied studios, but the Federal Government broke up the firm in 1915.  In the meantime, Biograph had declined to enter the new feature film business due to the expense involved, causing Griffith to leave with most of the company’s stars.  Now that feature films were taking off, Biograph lagged the competition and could no longer rely on its monopoly to stay relevant.  The company released its last short film in 1916 and thereafter relied on reissues of its old films to barely stay afloat.  For this reason, the company was more than happy to sell Rabkin its entire stock of Mutoscope machines and films.

American Mutoscope had never sold its peep shows, instead licensing the machines and the films to play in them to penny arcades.  Rabkin decided that in order to turn a profit, he would have to sell his wares instead, but there was little interest among arcade operators due to a lack of new content.  Rabkin therefore commenced production of new short films in 1924, creating roughly five hundred reels in a variety of genres before shutting down production again in 1933.  Sales remained sluggish, however, until 1926, when the Mutoscope suddenly became fashionable again in Britain.  As sales took off overseas, Rabkin’s business grew rapidly, and he was able to combine his experience as a machinist with a new influx of capital to expand his arcade offerings beyond the peep show business.

The first original machine International Mutoscope created was the Shootoscope, a countertop target shooting trade stimulator released in 1926.  Like other games in the genre, play consisted of inserting a penny into a coin slot, which the player then fired at a target housed in a glass-covered wooden case.  If the player’s coin hit the whole in the center of the target, it would be returned to the player.  Next, Rabkin developed his take on the classic fortune telling machine — marketed as Grandmother’s Predictions — which debuted in 1928.  Both machines remained popular for years, but Rabkin experienced his greatest success through the newly emerging crane games.

During his lifetime, William Rabkin claimed to have invented the coin-operated digger after taking inspiration from watching a steam shovel dig out the foundation of a building while he was still working as a young machinist shortly after coming to the United States.  In truth, by the time Rabkin developed his Electric Travelling Crane in 1928, diggers had already been a popular attraction for several years, and he likely just adapted machines that he had already seen at carnivals and arcades.  Indeed, the Exhibit Supply Company thought Rabkin’s crane was so similar to its own Iron Claw, that it sued International Mutoscope for patent infringement.  Regardless of the source, Rabkin continued to improve his device over the next several years, and by 1933 the Travelling Crane had played a crucial role in igniting a digger boom that swept across the United States and Europe.  Before long, crane games housed in elaborate art deco cabinets could be found not only in penny arcades and carnivals, but also in department stores and hotel lobbies.  There were even so-called “craneland” arcades that housed nothing but digger machines.  By 1936, Rabkin had sold over 25,000 diggers, a significant number for a large arcade piece of the era.

While cranes, gun games, and card vendors began enjoying increasing popularity in the mid 1920s, the venues for these games remained relatively limited at first due to the continued sluggishness of the penny arcade business.  Arcades were still associated primarily with peep shows and novelties in this time period, and the appeal of these machines had waned years before.  Even with International Mutoscope now releasing improved viewers and new reels, interest in the peep show remained relatively muted in the United States.  A new paradigm in arcade entertainment was desperately needed, and it was finally provided by the Chester-Pollard Amusement Company.

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The Chester-Pollard Play Football game, which brought competitive sports games to prominence in the arcade

The three Chester brothers — Pollard was their mother’s maiden name — entered the amusement industry in the early 1920s with a fortune telling machine.  Frank Chester, an electrical engineer, was the visionary behind the company, while Charles was an expert in mechanical technology, and Ernest was a consummate businessman.  In 1926, a British manufacturer named Freddy Bolland called on Chester-Pollard in New York to see if the brothers might be interested in the North American manufacturing rights to a manikin football game for which he owned the patents.  In this game, housed in a large wooden cabinet, two players would control the sides of a football match by pressing a lever to cause all the players to kick their legs at once.  For a nickel, the players would get a single ball and would have to time their kicks to score a goal on their opponent.  Score could be kept using a set of beads strung along the top of the cabinet, but every time a goal was scored, a new nickel would have to be inserted to keep playing.  Chester-Pollard agreed to take on the product, built 100 units, and tested them at select locations over the course of a year.  Proving itself a huge moneymaker, it was released generally in 1927.  Next came a mannikin golf game, which despite a relatively steep price of $150 for the penny model and $175 for the nickel model sold over 7,000 units.  In 1929, a horse racing game called Play the Derby debuted, in which two players turned cranks to drive horses around a track, and became yet another hit.  Chester-Pollard games were soon appearing in thousands of hotels, clubs, and railroad depots and could even be found on steamship lines.

With their competitive sports games doing so well, the Chester Brothers decided to expand into sports tables that did not incorporate coin control.  Baseball, table tennis, hockey, and bagatelle tables were tested in exclusive locations such as the Lido and Westchester-Biltmore Country Clubs, where they proved a tremendous success.  Based on these results, the Chesters believed they could pioneer a new arcade concept based around table games and exercise machines with and without coin control.  They named this new concept the Sportland.

In 1930, Chester-Pollard began testing the Sportland concept in existing arcades such as Playland Park in Rye, New York, owned by William Rabkin of International Mutoscope.  When these locations proved successful, they opened a purpose-designed Sportland in an outlying district of Brooklyn.  In its standard configuration, the Sportland featured a small array of coin-operated machines such as gun games or diggers in the front of the establishment and a large table game area in the rear blocked off by a fence.  For a quarter, a patron could spend thirty minutes playing all the table sports games they wanted.  The old penny arcade had failed when the public grew tired of peep shows because they had to be situated in a major thoroughfare to attract volume patronage, but owners could no longer afford the correspondingly high rents.  Sportlands, on the other hand, quickly attracted patrons whether they were located on a major street or not, and by the summer of 1931 they were a sensation throughout the New York area.

The onset of the Great Depression in 1929 cemented the arcade revival.  With worsening economic conditions severely restricting the amount of money most Americans could afford to spend on leisure in the early 1930s, arcade machines that could be played for just a nickel or even a penny became one of the few affordable activities in the country, causing revenues from coin-operated amusements to skyrocket. In 1930, over 250 companies manufactured 250,000 units of over 400 different games, and by 1934 these manufacturers were taking in more than $10 million annually. Meanwhile, Chester-Pollard had established fifty-two Sportland arcades in the New York City area alone by 1933, and they became a model for entrepreneurs all over the nation.   Consequently, the arcade completed its transition from a novelty attraction to a venue for games of skill, taking on the basic form it would maintain for the next sixty years.  Before long, many arcades were taking in over $800 worth of pennies and nickels a week, while prime locations could pull in as much as $1,200 a week despite an ever-worsening economy.  Gun games, competitive sports games, and diggers all played their part in this renaissance, but the most important contributor by far was a relatively new amusement called pinball.

Historical Interlude: The History of Coin-Op Part One, The Rise and Fall of the Penny Arcade

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

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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.

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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

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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.

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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.

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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.

Early Manufacturers

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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.

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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.