To the pinball community: I would like to thank everyone that has written letters or posted messages congratulating us and wishing us well with our pinball business. You are an important portion of our market, which we strive to serve. We ask for and appreciate your support. I wish I had time currently to answer and thank individually each person we received messages from. It has been a very busy time, preparing and negotiating our acquisition, reacting to the acquisition which was just over a month ago, and reacting to the announcement 2 weeks ago by WMS. Please understand our current work load and accept my apology. Obviously pinball is important to me, as I continue to ply the trade of my father before me. I would like to see pinball continue, as I think it has a place in our society as entertainment and a place in society's and my personal history. To many people pinball is a sport - a competitive sport. Like any sport, to exist it must have the equipment available. There must be bats for baseball, golf courses for golf, and balls for tennis. Only if someone (a business) can make money supplying the bats, the golf courses, and the tennis balls will the equipment necessary for these activities be available. That is capitalism, the American way. Only if SPI can operate effectively & inexpensively as a business will there be continuing pinball game development and production. We intend pinball to continue. To many people pinball is an art form - a collectible - much as an Early American style antique chair is a collectible, or a 50 year old automobile is a collectible. Both these collectibles were designed and produced not as art forms, but as useful items that a business created to earn money for its support and continuance. Again this is capitalism, the American way. Only if SPI can operate effectively & inexpensively as a business will there be continuing pinball game development and production. We intend pinball to continue. Not only must SPI operate effectively & inexpensively to survive, it must also make the product that the broad and worldwide marketplace desires. Our design philosophy is to make Mechanical Action Pinball, for the great player surely to enjoy, but especially for the average or causal player to have FUN playing. We are not trying to bring video gamers back to pinball - often they are at home gaming on the internet or what have you. We believe that, worldwide, pinball and many coin-op games have reverted to their basics of being ancillary entertainment in venues which are not primarily game locations. Our games are in pubs, bars, restaurants, and now movie theatres - places people come to not primarily to play games but where they play games waiting for a restaurant table, having a drink, waiting for a movie to start. Even many big arcades have games in them as ancillary entertainment, such as in Dave & Busters (where games are less than 1/2 the business) and similarly Gameworks. Therefore, if we can't attract and entertain the casual player, pinball will not make enough money in locations to continue --operators won't buy and so we won't sell. Capitalism working again. We believe the average/casual player is attracted to and enjoys Mechanical Action. Harry Williams used to say, "The ball is wild". The casual player sees that Wild Ball and the Mechanical things it does. He does not see the light come on in front of a target when the ball hits it, but he sees the drop target fall. He sees the castle fall when he its it, or Dracula come out of the coffin. He sees Kenny fall over dead when hit, or the toilet open and Mr. Hanky come out of the back. (Toilet humor is enjoyed the world over.) Or he sees the Harley-Davidson do wheelies when the ball hits the bike. The player hits these once and he knows to hit them again; the game is self-educating for the player. And the player has FUN doing this because he feels accomplishment instead of the frustration of some games. Having FUN, the player does it again. And maybe he then gets multiball, such as by hitting the Harley and causing wheelies repeatedly. Multiball for the causal player must be the greatest accomplishment and the most FUN. Add to all of this Mechanical Action some smooth ramp shots off the sweat spot of the flipper, some spinning targets making visual and sound action, and 3 or 4 properly spaced pop bumpers to let the game play itself a little so the causal player can dry his sweaty palms, and we with pinball can provide FUN to that larger player base needed to earn the income which will allow pinball to continue. We must operate SPI effectively & inexpensively, and we must provide entertainment & FUN to the casual player as pinball did over the decades. And we must realistically analyze the market size to service it properly. In the early 1990's there were probably 100,000 pinball machines a year made and sold. Today the worldwide market is 8% or 15% of that at best. It may fluctuate up a little, or down a little, but it will not exceed that 8,000 to 15,000 machine market very much nor for any extended period of time. There are too many new types of entertainment, both coin-op and otherwise (like internet, where you are reading this splitting your time between internet and pinball playing), and there are reduced numbers of the locations for our games. There is room for one company in this small market, and we intend pinball to continue. Most of you know that my father owned Williams from 1947 until 1964. He remained there until 1976, with the exception of being at Bally for one year. Before and after he sold the company, I worked there. I have a great place in my heart for Williams and for Bally - especially for Williams. WMS is a great company. They have developed a great slot machine business. They invested very very heavily in pinball, to the tune according to their published figures of having pinball losses of between $7 million and $8 million a year over the last few years. They tried hard, but no one could or should continue to sustain those kinds of losses. They made what was the right decision for their business and the future continuation of WMS. SPI of course can't afford those kind of losses. It must operate effectively & inexpensively, making Mechanical Action Pinball to entertain the enthusiast player and to provide FUN for the casual player, modeling itself to survive in the smaller marketplace. Neither can nor should anyone else submit themselves to the type of losses ($8 million a year) that WMS suffered in an attempt to be in the pinball business. This is to say nothing to the added millions of dollars it would cost anyone to start up today in pinball, whether from scratch or even from buying and moving WMS pinball (for the opportunity to continue losing $8 million a year). SPI over the years has created a low budget environment and culture modeled to survive in this small pinball business. WMS and MIDWAY, its sister company, are high tech companies and so do not have an inexpensive culture needed to survive in pinball. No other company has been able to created this inexpensive culture - not Alvin G nor Capcom nor Premier. Those of you who have toured WMS in Waukegan and/or the Capcom plant and who have been to SPI know what I mean about our inexpensive culture. It cost a lot of time, money and effort to develop SPI's unique systems (business computers, methodologies, and so for the) allowing SPI to operate inexpensively. I write to you all to thank you for your recent good wishes and to ask you for your future support. I feel it was therefore proper that I take the time to explain our design philosophy - what we are trying to do. And to explain the marketplace as we see it - the player base and the magnitude. To explain to you that we must be a successful business to survive and that we are uniquely qualified to be that successful business (we have an inexpensive culture). WMS made many great games, but their future was in other product. Others may dabble in pinball from time to time - that wouldn't surprise me - others have and failed in the past when the market was much better and larger. As the only experienced company in a position to devote itself, economically, to pinball, SPI is the hope for all of us - for your sport, hobby or collectibles and for my lifelong business career - for the to the continuation of pinball. We intend pinball to continue, and I would truly appreciate your support. Thank you in advance. Gary Stern