Case Studies
Issue No. 26 - December/January 2005/06
Fast Movers SA 2005
Top Gun hits expansion target
They launched their careers while they were still in their teens, buying 11 game machines and using the proceeds to both pay back a $50,000 loan and cash up to buy more.
A simple and effective plan — but a challenge arose in 1994 when the innovative driving game Daytona appeared. At $36,000 per machine Daytona was too expensive for the brothers to buy, so they came up with a clever cash-raising arrangement.
The Rimingtons’ investment proposal was simple: investors buy the machines, Top Gun administers them and they split the proceeds after ceding 30% of takings to the host site.
The Daytona machines yielded a 400% return on investment over a typical six-year operating life.
Top Gun's investment community now involves about 150 investors. The structure, ingenious in many different ways, gives Top Gun both flexibility and accountability.
"If we get a good product we like to take it to the investors," Grant says. This tactic fosters some very fast growth.
Some investors buy one machine, others up to 100, and each investor gets a monthly statement for each machine in operation.
"In 1994, 95 and 96 we were very active with investors but we were not too active after that until the past 18 months to two years," Grant says.
Consolidating their business and growing internally has given way again to a strong growth phase as opportunities with new titles such as Extreme Hunter, a deer-hunting game, present themselves.
And they haven’t stopped innovating. Their latest venture is prize vending machines where players who ‘beat’ the game win a prize.
"It's a very important part of the business to get the right products at the right price," he says. Prize value in Top Gun vending machines averages about $100.
The Rimingtons spend a lot of time researching products and observing consumer behaviour in retail outlets before launching the prize-vending initiative. Grant says that is s...
