Win Big

Posted on Jan 25, 2016 :: Cover Story
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Posted by , Insight on Business Staff Writer

It’s all about the “butt wiggle.”

For Gaetan Philippon, it’s one of the best indicators he knows to judge the success of the latest product rolled out by Bay Tek Games, the Pulaski-based game manufacturer he leads.

While not necessarily an official metric — after all, how would you actually measure it? — the “butt wiggle,” or lack of it, is often a great tell if one of the coin-operated games Bay Tek has created is succeeding.

“You have to remember that our primary audience is a child 9 or 10 years old,” says Philippon, CEO at Bay Tek Games since 2013. “When they are excited by one of our games, they keep playing and they start wiggling from side-to-side. It’s one of the things we look for when we go into an FEC.”

FEC is shorthand for family entertainment center, which includes places like Badger Sports Park in Appleton, Dave & Busters, the myriad parks and hotels in Wisconsin Dells and pizza restaurants such as Chuck E. Cheese. In addition to rows of video games and activities such as Laser Tag, mini-golf and go-kart tracks, these centers will also include rows of mechanical, coin-operated games featuring bright lights, moving parts, loud music and the opportunity to win mountains of prize redemption tickets in one shot.

“If we see the wiggle, we have a pretty good idea the game will be successful,” he says.

Chances are, the games lined up in those FECs around the country were built right here in Northeast Wisconsin at Bay Tek Games. The 40-year-old company, which started out making ball drop games, is consistently ranked as one of the top two manufacturers in the industry.

“We have a number of different manufacturers we work with, but their difference is they are incredibly personable and hands on,” says Mike Miller, the Wisconsin Dells-based district manager for Family Entertainment Group. “They listen to whatever we say, no matter how minor.”

Given the company’s recent successes, there is a whole lot of butt-wiggling going on.

Fun & Games

That Bay Tek cites the “butt wiggle” as a measure of success is perhaps not all that surprising, considering the first of the company’s six core values is fun. It’s one of the first things visitors see when stepping into the conference room at the company’s corporate headquarters, which have been expanded several times to accommodate the growth since the company’s founding.

Courtesy: Bay Tek Games
Courtesy: Bay Tek Games
Bay Tek’s roots stretch back to 1975, when Melvin Treankler, Bob Wech, Giles Blazer and Bob Ward started Northeast Wisconsin Electric as an electrical engineering firm. Two years later, based on an idea pitched by a neighbor in church, the company charted a new course and became Bay Tek, Inc.

The first product rolled out was a coin-operated ball drop game, a game concept that formed the core of the company’s business for much of its early history.

In 1983, Melvin Treankler’s sons Carl and Larry completed a buyout of the other partners to make Bay Tek a family business. During the next several years, the company moved from the basement of Treankler’s house to a space in MCL Industries (another family business) to its current location in Pulaski.

As competition in the industry increased, the company began diversifying its product line, adding light pattern games and its first alley bowlers in 1994 and 1995. Other new games followed, and in the late 1990s the company added another growth strategy to its arsenal: acquisition. In 1997, the company made the first of several “industry friendly” acquisitions that have added new product lines and technical expertise to the company’s portfolio.

“The industry has really consolidated in the past 15 years,” Philippon says. “Acquisition has certainly been part of our strategy, but so has creating great games for our customers.”

Bay Tek has done quite well with both parts of the strategy. In addition to its acquisitions, the company regularly rolls out new games, including classic titles such as Pull My Finger and Big Bass Wheel — one of the top performing games in the industry since being introduced in 2008.

The games are significant investments for FECs, in both floor space occupied and cost. Featuring wood, composite and glass construction, a Big Bass Wheel game stands more than 12 ½ feet tall with all the accessories and weighs in at 1,000 pounds. The list price is roughly $13,000.

“Customer play and revenue determine what is going to be successful in this industry,” says Family Entertainment Group’s Miller. “You are never really sure what’s going to take off. They’ve had a knack for keeping it simple and hitting the right products.”

All told, the company has expanded its current facility five times to accommodate the roughly 3,000 games it builds each year. Top line revenues are roughly $24 million annually, and Bay Tek employs more than 115 full-time employees in a variety of functions, from engineers to assemblers.

Simplicity sells

As elaborate as the corporate structure may have become, the company and its products are based on simple principles involving a player, a coin, a mechanical process the player controls and the opportunity for a big jackpot — which in Bay Tek’s world are the tickets used to redeem for prizes in family entertainment centers.

“It’s got to be silly-stupid to understand,” Philippon says. “You should be able to walk up to the game field and understand it in seconds.”

Behind that simplicity, though, is some fairly impressive engineering and manufacturing.

All of Bay Tek’s games are conceived, designed and manufactured in the company’s facilities in Pulaski. Along with industry demand for the next great game, short attention spans and competition from video consoles and mobile technologies, Bay Tek’s product engineers always have to be on the lookout for ideas that will excite the target market of players and FEC owners.

Sometimes, the ideas come easy.

One of Bay Tek’s newest additions to its arcade of games is Grand Piano Keys, a musical game where the player taps colored, oversized keys trying to match lighted squares scrolling down the screen to simple piano songs such as “Chopsticks.”

The idea came from a mobile app, and the game was developed fairly quickly from concept to finished product.

“There’s an app called White Tiles that someone was playing, and it was not hard to see how that could become a game for us,” says Holly Hampton, director of innovation at Bay Tek Games.

Ideas for other games take a bit more aging.

Courtesy: Bay Tek Games
Courtesy: Bay Tek Games
Take Big Bass Wheel, for example.

For nearly three years, the idea for a game that used a big wheel percolated on the minds of the product development team. A drawing pinned to the company idea board almost seemed to taunt employees because it had been up so long.

“An employee had that idea up on their white board for at least a year,” says Tom Diedrich, director of product development. “It seemed simple enough — create a game with a big wheel like the Price is Right — but the ideas just didn’t come.”

Finally, a concept came together and a mockup was created. The team could finally see potential for a game, though there was still some skepticism, Diedrich says. Even naming this one proved to be a challenge. Perhaps it was frustration at the process, or an acknowledgement of the game’s size, but the initial name was one “B” short of its present title.

Cover-Story-3Big Bass Wheel certainly fits the simplicity rule. A player inserts money, pulls the lever to spin the wheel and wherever it stops, that’s how many tickets the game spits out. Still, there was uncertainty how well it would play once it was in an FEC.

Quite well, it turns out.

“The early results were outstanding,” Diedrich says. “The first test on the Jersey Shore went over $10,000 and to this day it’s typically the No. 1 performer for most FECs.”

The game has shattered records for both play and revenue during its life and has been a popular choice for FEC operators since it was introduced. Many FEC operators have several Big Bass Wheel games on the floor. They stand out not only for the fish motif, but the soundtrack featuring a heavy Yooper accent provided by a former employee with radio and recording experience.

Its longevity is somewhat unusual in the industry.

“We’re not usually in a position to hold onto a product that long,” Hampton says . “New product is what drives our industry. It didn’t seem like a game that would hold on that long.”

No fear

An important part of Bay Tek’s innovation culture — innovation being the second of the company’s core values — is an understanding some ideas will fail. They just need to recognize those failures, learn the lessons and move on quickly.

“One of the things we always need to work on is learning how to fail quickly,” Diedrich says. “Rarely are you going to tweak a five into a 10. You have to learn to let it go and move on.”

And there are plenty of learning opportunities on the horizon, as technology allows the company’s games to be interconnected, provide better data on usage and even eliminate the need for coins.

Once a game graduates from concept to production, it starts a journey down the Yellow Brick Road.

The Yellow Brick Road is Bay Tek’s nickname for the path a game follows as it moves along the production line, from 4-by-8-foot sheets of plywood at the start to the shipping dock, where it departs for an FEC or other location. And yes, the path on the floor leading from workstation to workstation is painted yellow.

Each game produced by Bay Tek is crafted in house, from the cabinets to the circuit boards to the wiring harnesses that hold it all together. The company uses LEAN, just-in-time manufacturing to produce up to 15 games a day.

Each stop on its journey down the Yellow Brick Road takes about 35 minutes. Once a game clears the last workstation, where it is tested, given a final inspection and cleaned up, it is rapidly shipped out to the ordering customer. Bay Tek does not carry inventory. Games are manufactured as ordered.

“Normally, our lead time is about two weeks,” Philippon says, showing off a cross-discipline space where engineers, schedulers and sales reps work together to make sure games are built on time. “We have been known to get one out the door in as little as three days.”

The majority of the games leaving the plant will find homes in FECs around the U.S., though Bay Tek has a healthy export business as well, with international markets making up about 30 percent of sales, Philippon says. International sales do pose some unique problems for the company — since they pay out tickets, some countries treat them as gambling — but the market is growing.

More markets

Not everything the company makes is targeted toward that 9- to 10-year-old demographic in the FEC. Bay Tek also has a line of mechanical bar games, as well as what is referred to as the “street market.”

Popular games in the bar market include Beer Pong Master and the alley bowler Beer Ball.

The “street market” locations include the front area of supermarkets and retailers such as Wal-Mart. These games differ in that they pay out actual prizes rather than tickets. Perhaps a good measure of Bay Tek’s success is that Wal-Mart sent members of its corporate team to tour the company’s plant, even though it usually requires suppliers and vendors to visit its headquarters in Arkansas.

Bay Tek does not actually operate the games in retail locations such as Wal-Mart; one of the company’s select distributors provides them to site managers who may operate dozens of the sites.

“That was a unique experience,” Philippon says. “They are not allowed to accept anything of value, so we had to figure out how much a cup of coffee and a bottle of water costs so we could charge them.”

The village

Culture certainly plays a unique role in the way Bay Tek operates.

For starters, it’s part of what Philippon and others refer to as The Village, the collective corporate holdings of Bay Tek’s owners. All told, there are six companies that make up The Village: Bay Tek Games, MCL Industries, an engineering solution firm; LMG, a manufacturer of injection molding presses; NPDG, an innovation company formed to develop new products; the Green Bay Blizzard, a professional arena football franchise; and Keweenaw Base Camp, a Christian-based summer youth camp located in Houghton, Mich.

Because of that common ownership, the companies that make up The Village are able to share resources — including talent, best practices and ideas for innovation and growth. They also form a tight-knit company camaraderie.

Throughout the Bay Tek plant, pictures of products and employees are posted on various boards. There is a group shot in one of the displays Philippon likes to point out — a photo taken in support of a fellow employee fighting a serious illness. Many of the employees also wear blue wristbands supporting owner Larry Treankler, who recently had surgery.

“That’s a special part of our culture here. It is very much a family,” he says.

Indeed, a family atmosphere pervades the shop floor at Bay Tek, where employee turnover is fairly low and folks know each other well. Philippon says the company has not faced some of the talent challenges of other manufacturers, even with an eclectic mix of skill sets ranging from software developers to graphic artists to engineers to carpenters and assemblers.

“People have to really get our culture,” Philippon says. “We tend to select rather than hire. Those that get it tend to stay with us.”

That’s not to say it doesn’t take some getting used to. When your core products are games, the conversation can occasionally take on a bit of a different tenor.

Philippon remembers one particular conversation quite well. The creative team was discussing the game Pull My Finger and was arguing about the sound the game should make.

“It was not the kind of boardroom discussion I envisioned having when I was in business school,” Philippon says of the discussion about how realistic the flatulent sounds should be.

It was a discussion that lasted for well over an hour as the team debated the strength and weaknesses of the potential sounds. It may have not been what he expected, but he loved the results.

“Still, the game is one of my favorites.”