It’s a Saturday afternoon at Aladdin’s Castle in West Dundee, and the crowd is three or four kids deep around the most popular games in the house, Mortal Kombat II and NBA Jam.
Down the river in Aurora, gambling machines on the city’s two riverboat casinos are ka-chinging away like there’s no tomorrow.
And there are more than a few pint-sized video virtuosos scattered throughout family rooms in the northwest suburbs helping cartoon-like characters with superhuman powers rescue the less fortunate and save the world.
From the martial madness of Mortal Kombat II to the floating one-armed bandits of the riverboats to the wily escapades of Sega’s Sonic the Hedgehog or Nintendo’s Mario, all of this high-tech entertainment has one thing in common:
Happ Controls.
Based in Elk Grove Village, the privately held company manufactures a large percentage of the controls-joysticks, buttons, flippers, switches, trackballs, steering wheels and turbo shifters, to name a few-that make these games work, not to mention coin doors and currency controls, pinball parts, power supplies and myriad other accessories, according to president and owner Frank Happ.
“We are kings of many small niche markets,” said Happ, 47. “There are more of our controls in museums and interactive displays in this country than any competitor’s. We were one of the first to produce joysticks for home systems. . . . We make the lion’s share, probably 80 percent of the market share, of all the joysticks and buttons and steering controls that are used on coin-operated machines . . . (and) we make about half the buttons for the gambling machines.”
And that’s just in the United States. The 8-year-old company also trades internationally, both buying and selling parts, with Japan, China, England, Mexico, Spain, South America and Africa.
A tour through the firm’s 45,000-square-foot facility winds through a maze of modest offices, a spacious (and noisy) light assembly and manufacturing area, 10,000 square feet of floor-to-ceiling inventory and back through the dimly lit CAD stations where all these products first take on their 3-D shape.
Their customers refer to them as key players in the amusement game business, not only because they make good products, but their reputation for innovative engineering solutions is unmatched in the industry.
“They’re always out trying to build a bigger and better mousetrap,” said Ron Sommers, purchasing manager at Chicago-based Williams Bally/Midway, the largest pinball and video game manufacturer in the world and creator of the arcade mega-hits Mortal Kombat, NBA Jam and Terminator 2. “They do a real good job in always trying to do whatever they’re doing right now better-a better design for their customer. . . . They’ll come in and look at something we did before and they’ll upgrade it and improve it.”
Richard Ditton, owner of Incredible Technologies, a designer and developer of arcade games in Rolling Meadows, agreed. “Every time you see Frank Happ, he’s got a new button or a new joystick he wants to show you. He’s very excited about his product line,” Ditton said.
And Happ should be. Growth of more than 900 percent between the company’s first year in 1986 through 1990 earned Happ Controls a spot (No. 362) on Inc. magazine’s Inc. 500, a listing of the 500 fastest growing companies in the country. Today, sales are more than $15 million annually with projections for at least 6 percent growth in 1994.
Not bad for a business that started in Frank Happ’s garage.
A native of Northbrook, Happ began his career in the coin-op vending and amusement business after he got out of the service in the early 1960s. He worked his way up the management ladder and was recruited by Coin Controls, a manufacturer and distributor of component parts for arcade games and gambling machines. They were interested in starting a U.S. division, and they wanted Happ to be president.
From 1981 through 1986, Happ and his wife, Susan-who these days works part time coordinating trade shows and Frank’s travel and is vice president of insurance-grew their home-based business from six employees (not counting their three children, who have always been involved) to 90 employees with $8 million in sales. Market share went from zero to over 70 percent, an increase that was due in large part to Happ’s tireless dedication, Susan said.
“He’s a workaholic,” she said laughing. “He gets up in the morning and it’s business, business, business. He even brings work home with him. . . . He’s incredible, he really is. But he enjoys it.
“He’s a very dedicated man, and we both really enjoy it,” she added. “It’s a fun business, I’ve been saying that for 12 years.”
When Coin Controls went public in 1986, they asked Happ if he knew of anyone who might be interested in buying the joystick and button end of the business.
“I said sure,” Frank recalled, “right here.”
A few months later, Happ Controls was born, and Happ continued pretty much where he left off, only with a new name and a two-year agreement not to compete with Coin Controls in the coin door end of the business.
“Of course, two years was up a long time ago,” Happ said with a grin, “so we compete like hell today.”
From the tiny home-based business of 1981 to the 110-employee company of today, Frank Happ said the formula for their success hasn’t changed: High quality products with a quick turnaround at a competitive price.
Which is easier said than done when the customer is expecting 4,000 sports car steering wheels that’ll respond just like the real thing.
Said Jim Happ, 45, of West Dundee, Frank’s younger brother and executive vice president of engineering and manufacturing, “All of our controls, with a few exceptions, are things that a person uses to interface with a game, and the game is usually a simulation of something you might do in real life (except you can’t), whether it be driving a car or flying a plane or shooting a bad guy.
“And how good we do our job is how realistic it feels,” he continued, “how well it responds, whether it feels clunky and difficult to work or is like driving a sports car. Besides that, it’s important to have them be durable, and probably the next main thing that’s related to product design engineering is that they have to be reasonably priced . . . and those things are often in conflict. How well the simulation is made sometimes will cause it to be more expensive.”
Judging from Happ Controls’ list of 3,000-plus customers, which range from amusement game giants like Williams Bally/Midway and Melrose Park-based Data East Pinball, to individual operators who might order one or two buttons, flippers or coin doors at a time, it’s a conflict they’ve managed to resolve with aplomb.
“They do a very good job at keeping costs down,” said Jim Ross, Data East’s vice president of purchasing. “I can calculate the costs just as well as they can, and they do an excellent job. If they didn’t, I wouldn’t be doing business with them, because I work under very tight budget constraints-there’s not a large profit margin on a pinball machine.”
“You’ve got to provide really good value for money,” Happ said simply. “This is a world-class product,” he said holding up a white push-button assembly. “Nobody in the world makes a button like this out of 100 percent nylon with a high-class American-made Cherry switch (Cherry is a major supplier of switches and other electrical automotive and display components in Waukegan) and still can deliver that product to its best customer for 85 cents. Maybe you can get it for 75 cents if you buy it from Taiwan, but it probably won’t be as good, and you certainly can’t get it tomorrow. We can supply 10,000 of these tomorrow. . . . And that’s pretty much true of all our lines.”
Dave Pallotto, vice president of product development engineering, noted Happ Control’s relationships with manufacturers also gives it a competitive edge because the engineers get in on the ground floor of the design, which often allows for more creative leeway.
“We may be working with the guy that’s actually designing the software of the game,” Pallotto explained, “so let’s say he has a pinball machine, and the theme of the game is driving. Instead of starting the game with just a push button, I designed a key switch so that you turn the key and the whole machine starts rumbling and shaking like you’re starting a car.
“For a (Data East) game, Jurassic Park, we designed a gun handle to be mounted on the outside of the gun to simulate a gun that was in the movie . . . so early on, we knew, before the movie was even out, we knew they were going to make this pinball game and they had us over there to design the handle for them.”
But designing special effects is actually a small part of what they do, Pallotto added. “Most of the time we try to take some type of existing control and make it more reliable, make it more ergonomic and make it less expensive,” he said. “So it ranges from the flashy stuff all the way down to designing to put in a ball bearing instead of a bushing, so something feels a lot smoother and lasts a lot longer. It sounds kind of boring,” he said laughing, “but that’s what the customer is looking for.”
Indeed, “what the customer is looking for” plays a big role in how things get done at Happ Controls, according to Tom Happ, Frank’s son and OEM (original equipment manufacturer) manager.
“I look at us as manufacturers, but we also sell service,” said Tom, who lives in Arlington Heights. “We cater to the customer a lot, where we’ll make modifications; we react quickly and we’re very responsive to problems. In fact, just this morning, a customer called because we shipped in something that didn’t work for them, so I hopped in my car and went over there, and we adapted our product to work in his application, and the implementation is one day.”
At 25, Tom Happ said he has worked with his father “ever since I can remember . . . and there’s not a day I can think of that I would wake up in the morning and say, `I don’t want to go to work.’ Probably one of the best feelings is when you go into an arcade and it seems that everywhere you turn, more and more games have our stuff on them, which is due partially to the good quality of our products . . . (but) we’re very flexible and versatile, and that’s what I believe gives us an edge over all our competition.”
Happ’s two other children-Tracy, 22, who lives in Inverness with her parents and heads up USA sales and marketing, and Michael, 26, who lives in Schaumburg and is Happ Controls’ consumer product sales manager-agreed, noting that a big part of what they all do is try to keep a finger on the pulse of an industry that moves more quickly than most.
“It’s not unlike the movie industry,” said Frank Happ. “When you come out with a movie, you want to show it across the country very quickly because it’s got a life, and it may be a short life . . . the same with these games. Some of the games are themed to football season, or to the movies . . .”
So Frank logs about 100,000 miles a year to maintain a market share in a business that has never done anything but boom.
Indeed, the coin-op industry-estimated to generate $7 billion annually in the U.S., according to Marcus Webb, editor of Replay Magazine, a California-based trade publication-has remained strong ever since David Gottlieb introduced his Baffle Ball pinball machine in 1931. Today video games represent about a third of that market, Webb said, with pinball claiming another substantial chunk.
“Certainly the industries we serve are growing,” Happ said. “The gambling industry’s in a growth state, the home markets are increasing, the consumer electronics show we just came back from had a million square feet of display in Las Vegas-it’s never been larger than that.
“The interactive entertainment possibilities-rides and attractions based upon what used to be military technology, simulators where you can fly your own jet for $5-that’s kind of interesting. And we’re at the forefront of those technologies when it comes to simulators; there’s nobody that can do that better than we can, so that’s going to give us quite a lead for the future.”
