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Tuesday, November 24, 2015

Thoughts, Part 3

The last few weeks got pretty heavy, so this week I'll lighten up with a return to my periodic, anthologic "Thoughts" series of articles.  My first two installments (part 1) (part 2) touched upon a variety of topics based on whatever I observed at the time.  I'm still kind of fixated on solving "the board game problem" at DSG, where I have a passionate customer following and good arrival traffic, but the category underperforms its sales metrics substantially, and the specter of price resistance, mostly not an obstacle in the past, has risen from its grave to rattle its chains.  Accordingly, today's Thoughts will all be about the board game category.

Last week's article ran so long I didn't get around to mentioning one of the little litmus tests or telltale signs, you might say, that the board game market at brick-and-mortar retail may have become compromised, perhaps fatally, by online deep discounting.  Gary Ray calls this "last man standing," and I see it a little more cynically as "having exhausted all other options, we came to you."

Take a hot board game, I'll use examples from the past year that come readily to mind.   Dead of Winter.  Codenames.  Risk Legacy.  In each case, there was brief availability in distribution (or, for Risk Legacy, via WPN Direct), followed by a pronounced outage where no product was available.  In each case, my initial stock of those games was modest, an amount a prudent retailer would order before knowing whether the game would be a hit. At DSG's scale, that meant four Dead of Winter, six Codenames, and four Risk Legacy.

In each case sales were nonexistent at first and the product sat on the shelves.  Then, the game got hot all of a sudden.  Dead of Winter was on Wil Wheaton's Tabletop, the others caught on from whatever social media or advert campaign, et cetera.  But still nothing.  The game was the toast of the town and I still couldn't sell a copy at list price.

Then just as I was ready to pull them from the shelves and take advantage of the eBay closing prices being at a premium due to supply scarcity, and sometimes after I had already done that on a few units, I would start getting the calls, messages, and visitors asking for the game.  They quickly bought what little I had left, and of course then I couldn't restock the title for a long time.

The entire time the title was out of stock and the Amazon and eBay price was out of sight, I was bombarded with regular requests for the title.  For Dead of Winter I even had a waiting list, since I hadn't learned this lesson yet.  My entire staff started learning the script.  "Yes, we do carry it, but it is out of stock in distribution.  We've ordered it and as soon as it's reprinted it will absolutely be here."

Eventually, at long last, I got a restock of each.  And of course since I had placed backorders with multiple distributors, I got quantity from all of them, more or less at the same time.

And then... crickets.

The calls stopped.  The requests stopped.  Nobody ever asked for the game again.  Okay, one or two people.  Out of the eight-deep restock of Dead of Winter, I have five copies left, and that was after buying one for myself.  For a game people tried to buy from me almost every day for most of a year.  I have yet to sell a copy of Codenames or Risk Legacy from the healthy restock I finally got.

What happened?  Where did everybody go?

There are several possibilities, and they are not exhaustive.

1. My in-town competitors are just crushing me, and they got all those sales.  There are two other "alpha board game stores" in town that sell at list, and I don't doubt that they saw somewhat better results than I did just due to their sheer longevity and deep, decades-built clientele.  But they had the same sourcing problems I had.  Even if their initial sell-through happened faster, they still sold out, same as I did.

2. The repeated requests were coming from eBay flippers, garage dealers, flea market dealers, or what have you.  Some of this was certainly happening.  But the sheer volume of it... unless I was hearing from every grind-hard in the American Southwest over and over again, the lion's share of requests had to have come from players who just wanted the game.

3. The game withered on the vine.  Too long out of availability, players gave up and moved on to the next hot title.  I think this is a plausible part of the equation.

4. Some other factor I haven't considered.

But I think we all know the real culprit, the proximate cause in the majority of cases:

5. Most people buy their games regularly at deep discounts online, and only turned to us when that reservoir ran dry.  Once we were refilled, everyone was refilled, including the deep-discount sources those players were accustomed to using, so once again they had no need to turn to brick-and-mortar at list price.

Man, it's a damned good thing Magic, comics, and miniatures are so strong this year, because if I were counting on board games to make nut, I'd be looking for a way out of my lease.  The most frustrating thing is knowing the board game industry is booming, seeing the racks full to the rim at Barnes & Noble and Target, and envisioning the gigantic amount of sales all these other retailers are making on board games, so the market is out there... but we're just making the ancillary sales, if that, and an underwhelming modicum of activity otherwise.

Moving on.  One thing an industry publisher told me last week that rang true was that with most board games, there's no ongoing investment or attachment, resulting in board games being far more vulnerable to commoditization.

With a collectible card game or miniatures game, cultivating a relationship with your local game store is an important part of the equation.  Without an LGS, tracking down the cards or figures you need becomes a tedious and expensive pack-surfing routine or an endless series of PayPal expenditures and waiting for little parcels to arrive, hoping each card really is "near mint" as claimed and dealing with hassles regularly.  As well, having a place to play is pretty crucial to collectible games because the metagame quickly grows well beyond the bounds of a kitchen table playgroup.  It's similar with the comic book hobby, where you're most likely going to subscribe at exactly one store to all the books you want, and that store is going to facilitate things for you.  Yes, there exist online sources for all of this, but it's almost all just small local stores selling online -- the collectibles side of the trade is the part that is toughest to scale up, so the mass market isn't doing that much of it, and it's where local retailers add a lot of value just by having the goods and knowing about them.

But with a board game, even something awesome like Dead of Winter, well, you only really need to buy it once.  And you're only going to play it at home, 99% of the time.  It's tough to make a case that you should pay anything more than commodity pricing for it.  Meanwhile, both the mass market and online discount warehouse stores can scale up simple, box-shaped commodity SKUs very easily.  They've already solved that workflow.  They can already do it better, faster, cheaper, and more profitably than any LGS-scale store.

Your only rationale for not taking the bottom price overall for that board game is going to be some combination of the rest of the brick-and-mortar value proposition: You get it immediately (relevant for Cards Against Humanity when the dinner party is in three hours); you avoid the risk and hassle of a damaged or incorrect shipment; you can use up store credit if you've been saving any; social reasons, and so on.  I'm not sure whether all that put together equals the incremental delta between the online price and MSRP in many cases.

This might be an endemic flaw to the board game category, something where the first publisher to solve this quandary definitively, and to have sufficient control over distribution to prevent a race to the bottom, will taste profound success.

Maybe this is why the comic and hobby game trade stores that focused on "collectibles" outnumber the pure game stores among those that have been around for decades.

Related subtopic and I'll leave it at that for the week: Board games have become increasingly card-based, which is sensible due to production costs being so friendly for playing card media.  Meanwhile, players have become increasingly attuned to how easily cards wear down, mostly due to the pervasive influence of Magic: the Gathering.  The natural result of this is that players tend to want to sleeve their board game cards. I sell far more sleeves for card-based board games than actual card-based board games.  And though I do enjoy the revenue from selling packs of all the oddball board game card sleeve sizes, my life would be an order of magnitude easier if publishers would just use the standard playing card size as much as feasible.

I want to call out the following publishers for making the decision to keep their cards standard-sized and thus easily sleeved with the most sleeve options the market offers: Stone Blade Entertainment (Ascension series); Cryptozoic Entertainment (DC Deckbuilding, Lord of the Rings Deckbuilding); Brotherwise Games (Boss Monster series); Asmodee sometimes (Splendor, Elysium); and Z-Man Games (Shadow Hunters).  I'm sure I've missed some, props to them as well.

Anyway, that's all for this week, if you're in the U.S., I wish you a happy and safe Thanksgiving!

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