Bally to Sell Its Game Unit for $8 Million : Focus Shifts From Pac-Man to Fitness

Bally Manufacturing Corp. is getting out of the arcade machines business it created 57 years ago, selling its pinball and video games business to concentrate on more lucrative ventures, according to a company official.

Bally, which produced such popular games as “Pac-Man,” “Ms. Pac-Man,” “Space Invaders” and “8-Ball Deluxe,” will sell assets from that part of its business for about $8 million to a chief competitor, WMS Industries Inc., of New York, said William Peltier, Bally vice president for corporate communications.

Peltier said Saturday that the company probably will begin making the Bally machines at a Chicago factory of its subsidiary, Williams Electronics Games.

He said the sale should go through within 30 days.

Popularity Faded

“We started the pinball business in 1931,” Peltier said. “You hate to see it pass, but you’ve got to keep moving.”

Economic realities prompted Bally to make the move, Peltier said. At its peak in 1982, Bally’s amusement game business brought in $600 million. By 1987, revenue from amusement game manufacturing fell to $24.3 million in face of stiff competition from Japanese firms.

The company sold more than 100,000 “Pac-Man” machines, and more than 125,000 “Ms. Pac-Man” machines, Peltier said.

Bally has made its video and pinball machines at a factory in suburban Franklin Park, which employs up to 200 people, Peltier said.

He said employees who do not move to the Williams factory in Chicago probably will be absorbed by Bally’s growing Lifecycle, Liferower and Lifecircuit fitness equipment manufacturing businesses.

“The fitness business, that’s the growth business for us,” Peltier said.

Arcade machines helped give Bally its name, but also almost sank the amusement giant.

Attention on Casinos

Bally grew out of a company called Lion Manufacturing Co., which in 1931 introduced a pinball machine called “Ballyhoo.”

Popularity of the game led the company to manufacture it under a shortened version of the game’s name, and the company went public in 1968 as Bally Manufacturing.

In the late 1970s and until 1982, Bally made millions of dollars in the video game business. In 1982, Bally earned a record $91 million, and arcade games provided 75% of the company’s pre-tax profit.

But one year later, Bally’s profit was only $5.2 million after a steep decline in the games’ popularity. By 1984, Bally wrote off $100 million in losses from its video game business.

In the past two years, Bally has paid increasing attention to its casinos in Las Vegas, Reno and Atlantic City.

Bally will continue to manufacture gambling game machines, and is keeping its Alladin’s Castle chain of video and pinball arcades.

The company also operates 300 fitness centers nationwide, including Chicago Health Clubs.

In fiscal 1987, Williams’ pinball sales were $76.5 million.