International Mutoscope

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 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 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

Sittman & Pitt Card Machine

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.

Charles-Fey

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.

William Rabkin

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.