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Profiles

Multimorphic

By Eric Peterson | Jun 06, 2022

Aerospace & Electronics Consumer & Lifestyle Texas

Company Details

Location

Round Rock, Texas

Founded

2010

Ownership Type

Private

Employees

7

Products

Pinball machines and components

Founder and President Gerry Stellenberg is manufacturing a paradigm shift with his cutting-edge pinball machines.

With a background in hardware and high tech, Stellenberg started making printed circuit boards (PCBs) for hobbyists making "homebrew" pinball games as PinballControllers.com in 2009.

"I am a computer/electrical engineer by trade," he says. "That's what I studied in college, and I worked in that field for almost 20 years, 15 years doing bleeding-edge technology: logic design and high-speed data processing and that kind of stuff. I designed a board in my spare time called the P-ROC board. That board took on a life of its own."

The P-ROC is still in production and now used by several pinball manufacturers as well as hobbyists. It helped get Multimorphic off the ground and still accounts for about a quarter of its revenue.

The board also led to the company's innovative twist on pinball: the P3.

"Eventually, a friend and I had enough boards to build our own machine, so that's what we did," says Stellenberg. "The machine we built turned into what we now call the P3."

It's all about leveraging technology for a modern take on pinball. "The pinball industry, in my opinion -- and it's really hard to argue this -- has been largely unchanged for decades," says Stellenberg. "Pinball is what everyone knows pinball is: a physical ball rolling around a wooden playfield with mechanical devices attached. I, as an electronics guy, as a technology guy, wanted to bring more technology to the game, so we could experience virtual interactions and cooler types of mechanical interactions."

The P3 utilizes a digital lower playfield akin to a smartphone's touchscreen "that can track the position of the physical pinball rolling on top of it," says Stellenberg. "Just like your finger on an iPad, the game knows where the ball is at all times."

The back third of the playfield accommodates different modules for different games, and the lower playfield changes digitally depending on the module in use.

"We took the upper portion of the playfield and put all the physical mechanics there -- the toys, the ramps, the loops, the targets, the magnets, motors, all that stuff -- and we did that in a way that's modular," explains Stellenberg. "That piece is toolless, you can change it out in 30 to 45 seconds."

The design brings pinball machines up to date with the rest of the consumer electronics world. "Every device that you own -- your cell phone, your computer, even refrigerators and microwaves these days -- have the ability to run apps," says Stellenberg. "Everybody's familiar with taking a platform and adding more content to it, and that's what we're doing with pinball. We're basically doing for the pinball world what the video game console did for the video game world, which is: give people a lot more value for the money."

The base P3 retails for $8,300, and kits for new games cost $99 to $499 if no playfield module is involved, and $1,499 to $3,000 for kits with playfields. Other components -- including art panels, flipper assemblies, and side targets -- are likewise modular, but more often stay in place for multiple different games.

Multimorphic is behind the majority of the P3 modules to date, but third-party developers are also coming up with new games for the machine. "We have a development kit for it that third parties can download for free, because we want them to have access to the platform and be able to create content for it," says Stellenberg. "Our third parties right now have just developed new apps, they haven't developed additional hardware, so their apps will work on one or two or more of our existing modules."

After Multimorphic released titles like the sci-fi Lexy Lightspeed -- Escape From Earth and crime caper Heist, Stellenberg jumped into licensing, a longtime tradition in pinball that includes such rock icons as The Who, Elton John, and Kiss.

Stellenberg targeted "Weird Al" Yankovic for Multimorphic's first licensed module. "We didn't have the money to go after licensed themes, like a movie or a rock band or whatever, until recently, when our volumes started creeping up to where we had a budget to do that," he says.

"We talked about 'Weird Al' for a while and always wondered why it hadn't been done yet," says Stellenberg. "We all thought it would be cool, and I literally just reached out to his agent and they forwarded me to his manager, and his manager and I talked, and we made it happen."

After Stellenberg worked deals with a long list of production companies for the music rights, the Weird Al's Museum of Natural Hilarity module -- priced at $3,400 -- hit the market in February 2022 and helped drive an uptick in sales.

Because of the logistics of manufacturing pinball games, Stellenberg migrated from contract manufacturing to a company-operated, 10,000-square-foot manufacturing facility in 2019.

The company's crew cuts wood on CNC machines to build the cabinets, and assemble a long list of components into finished P3s. "We work with about 15 people," says Stellenberg. "We have seven on staff full-time, and the rest are volunteer nights-and-weekends contractors -- people that see the potential and want to help."

Stellenberg says migrating from contract manufacturing was motivated by cost. "We chose to stop paying the overhead of a third party's profit and bring production in-house," he explains. "Before we were living at our contract manufacturer's shop, because we had to coach people and find the problems and fix them and do QA and all that stuff. Now, it's a lot easier to manage because we're just all here working."

The P3 market is largely people who want a game to play at home, but the company also counts several barcades and other locations as customers.

"The entire pinball market has shifted over the last 15 or so years from locations to consumers," says Stellenberg. "The market has heavily shifted, but the games haven't changed, so we say that if consumers are buying pinball machines, it really doesn't make sense to sell them 10 machines."

Stellenberg says sales have increased every year as the company accelerates development of new modules: Multimorphic will release two new playfields a year, up from one every 18 to 24 months in the past.

"They don't have the space or the money for a whole library of games, so that's why we're bringing them the multi-game price paradigm," he says. "We're trying to bring people an alternative, rather than be just another option in the same market."

Challenges: Supply chain -- lead times have tripled for many components -- tops the list. "The challenges that everyone is facing are certainly hitting us," says Stellenberg. "Everything's gone up in price, everything takes longer to ship."

A P3 has 3,000 parts and a supply chain that stretches around the world. "Supply chain management in this kind of a product is crazy intense," says Stellenberg. "We're constantly talking to suppliers. We've gone through good ones and bad ones. We think we have a network of good suppliers now."

"These things are basically small automobiles, but the difference between automobiles and this is automobile companies have thousands of people working on them and we have 15."

Photos courtesy Multimorphic

He adds, "If you're familiar with hardware startups, it's been a struggle. This is a very expensive product to make, and we didn't start with much money. We're still pinching our pennies and paying people based on future rewards and that kind of stuff."

Opportunities: Carving out a nice niche in the roughly $150 million -- and growing -- pinball market. "We have the best loyalty in the industry," says Stellenberg. "We think with the 'Weird Al' game we're getting over the hump and we're growing our base pretty significantly right now."

An advantage: "Other manufacturers have to rebuild their customer base every time they come out with a new machine. . . . We don't. We have a set number of people who have bought the P3 machine already, and we'll continue to grow that installed base over the years. Every time we come out with a game, more people are going to want the machine, but every time we come out with a new game kit, there's an existing installed base of customers who are eager for more content. I describe it as the best loyalty program in the industry."

Needs: Multimorphic has been bootstrapped for the first decade, but the company is now open to outside investment of "$1 million or so to help stage additional supply chain purchases," says Stellenberg. "We are open to investors and we would love to have one."

The company could also use more space and employees. "We're currently 10,000 square feet and we're packed full," says Stellenberg, citing a need to roughly double its footprint. "We need to grow. We need to bring on more people to assemble games, and it's a challenge to find people."

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