Ch 2: Photo Play - Positive Games - The Positive Gaming Story

07 - 11 - 2012

Ch 2: Photo Play - Positive Games - The Positive Gaming Story

This chapter explains how we managed to get the PG business started via Photo Play.

In the morning of January 2nd 2002, Thomas and myself brought along a Photo Play “smart” machine onto a small plane going to Førde, a town in the western part of Norway where the Gaming authorities have their headquarters. We started off from Gardermoen airport outside Oslo, and since the Photo Play machine weighed 20 kilos, we had a lot to carry. We were a bit late and ended up having to run while carrying the machine, and it was further than we liked. In the end we made it onto the plane, just in time.

We arrived at the Gaming authorities’ headquarters a bit prior to our meeting. The person responding to our request for a meeting was the legal director, so we expected to meet with her and an assistant, especially since we knew that there was a lot to do for the whole staff because of a new computer program being in charge of all slot machine starting operations from that day onwards. When we entered the meeting room, they were 16 people, the whole management apart from the managing director. We put the Photo Play machine on a side table, and sat down to talk. When we asked them why so many of them showed up, they explained that we were interested to enter a business everyone else were leaving, so they wanted to know who these people who were ready to swim against the stream based on the idea of dealing with arcade machines that could have positive effects for people were.

After explaining how we got into the business, they asked what they could do to help us. We suggested to show them the machine we brought, so they would understand that there were no elements of gambling, violence etc, and they agreed. We started up the machine and I played a game called Concentration, and after a few levels (that took a few seconds each) the legal director exclaimed: “That is completely innocent!”. Then we sat down again. We told them about the problems with getting licenses to put out machines in Norway, a system that had stopped working as intended since the slot machines were completely taking over. I asked if they wanted to see a company like us not being able to place out Photo Play machines and thus not enter the business because of not obtaining licenses, and they said they would not like that. We knew of a previous paper that was issued on the basis of Photo Play, this was issued towards NLD (see chapter one of the PG Story). We asked if it was possible that we could take over the paper issued to NLD should we take over the business, and if perhaps they could expand the application of it. That paper promised 500 extra licenses outside of the normal ones, but only for locations where there normally would be no machines anyway. We asked to add a few more types of locations to that paper, and at the end of the meeting, they agreed. We got what we came for, and the whole industry was surprised that we got something like that as the first ones ever.

ATEI trade show in London

After that, Thomas and myself went to London for the ATEI trade show towards the end of January 2002. Funworld were releasing a new update for Photo Play, called IGO. They also invited all interested parties to a party the day before the trade show. Thomas and myself went there, and watched the presentation. It went along the lines of “first there was light, then there was earth, and then came Photo Play IGO”. Expensive party with free drink for everyone etc, but overall not too impressive. On that occation we got the chance to meet up with Ingolv Bru from Compu-Game Norway for the first time, the guy we tried to wrestle the exclusive rights for Photo Play in Norway away from. He was friendly enough, and told about his background etc.

The next day we went to the trade show, and naturally spent a lot of time at the Funworld booth, playing Photo Play and talking with the relevant people. We walked around to look at the whole show, and at the Konami booth we noticed again the annoying dance machine that was in our local arcade. This time it had people playing on it, but it just looked like the guy pressed randomly on the floor panels, there was no way he could read those arrows and press that fast on purpose…or was there? Either way, the game looked a bit more interesting.

That evening we had a meeting with Funworld and Elite / Compu-Game at a hotel near ours. Thomas and myself came in and sat down, and then the Elite guys joined us for a beer. Then the guy from Funworld who had walked out of our first meeting came in, and sat down. He started by saying: “Tonny, please let us know what the goal of today’s meeting is”. Tonny was the managing director of Elite / Compu-game. Tonny said that the goal was for Positive Gaming to accept nonexclusive distributorship in Norway for Photo Play, but where we would be a close partner of Compu-Game. That was a slap in the face for us since we wanted the exclusive rights, but we realized that if we wanted to enter the business we just had to agree to this. So the meeting went pretty fast, since the Funworld man asked if we had problems with that scenario. We had voiced our opinions up front, and since this was obviously not going the way we would have wanted, we focused more on getting what we thought was realistic.

After that trade show we went back to Norway, and resumed out negotiations with NLD to take over Photo Play from them. We were also considering to purchase their flagship arcade facilities called “Kanalen”, which is where Thomas and me played Photo Play, and where I met Daniel the year before. I wrote a long email, presenting our situation, an evaluation of the arcade business in Norway, and brought up an offer for both the arcade and the Photo Play business. Both offers were way below any indication we had received, and the offer for the arcade was in one way ridiculous…we offered to take over an arcade that had cost NLD close to 3 million EUR if they would give us 125.000 EUR (the rent for the place was very high, and they had lost money every month since they started). The result was that they invited us for a meeting, interested in discussing both offers.

In the end, our bank said no to taking over the arcade, mainly because the rent was so high. When it came to taking over the Photo Play business we were closer, however. In March we ended up formulating an agreement for the purchase of the Photo Play business, and after a board meeting at NLD, Lars from NLD called us and told us we had a deal. It would mean an investment for us, but we could get the business for close to 10 % of what NLD had invested in it. It looked like a lucrative deal to us.

2 days later, Lars called me again and said that the deal was on hold. When I asked why, he told me that he had spoken with the main owner of NLD, and that their representative called Peter had been speaking with the Finnish Photo Play distributors, Pelika. The managing director of Pelika, Jurgen Victorsson, told Peter how incredibly well Photo Play was going in Finland, and that Pelika would pay more than we were ready to offer. We were not pleased, since we had an agreement after a 6 month long negotiation.

Our next step was to threaten to sue NLD, and the letter threatening them was delivered right to the office of the chairman of the board of directors at NLD. She happened to be the ex minister of justice in the Norwegian government, and was probably a bit embarrassed, but we were not too worried. In preparations we included my father as well, and we claimed that an agreement is valid when agreed to, even if not yet signed.

The next day the new CEO of NLD called me and said he wanted a meeting. He had just taken over his position, and was a bit surprised by our threat…I went there to meet with him, and he seemed ok enough. He told me he needed to get a grasp of everything, and suggested that we should give him 2 weeks to make sure he could give me a qualified feedback. I said ok. In the mean while I talked with Peter from the side of the owners, and he told me he just wanted to check the path of selling to Finland further.

After 2 weeks, the new CEO called me, and said that we had a deal. Then I told him that we actually didn’t want the deal anyway, but wanted to renegotiate. I could hear a few fuses going off inside his head, and he said “don’t start playing with me now”. I suggested a new meeting. At that meeting we argued why the price should now be 20 % lower than what they had said no to after their board meeting, and in the end he ended up agreeing. In the final stages they claimed that the price was “plus vat”, but we said no, it was including vat. That almost made them freak out again, but in the end they agreed.

We signed the agreement in the late spring, and could finally get to work on starting up Positive Gaming’s operations. In the mean while we had worked to source several key people so we could do sales, operations etc, and Daniel was the main technician and would run operations under our guidance. Trond, Eilin, Jan and Eirik came in to work along with us, and the Positive Gaming adventure had become a reality.

That concludes the 2nd chapter of the PG story. In the next chapter, I will tell about how we tried to get involved with Photo Play in Poland, how we started up in Sweden, how we got started with Dancing Stage Euromix as well as how the Photo Play business in Norway progressed. Stay tuned for more of the PG story in Chapter 3 :).

 


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