Learn about the board games market

Submitted by ehanuise on Tue, 12/03/2013 - 17:11

Learn about the board games market

The board games market probably is larger than your current perception of it. To better understand its size and depth you have to view it as a whole and give a close look at each facet. You will need to gather information from the trenches and online.

Visit all levels of retail

First, go spend some time in all levels of retail that sell board games. Take the time to understand that some games are sold in different kind of shops, and that each will have different kind of requirements. Sometimes even different packaging are used for the same game in different kind of stores.

Once again, depending on your location the nature of the shops that sell games will be different. In some countries you will find some board games at the local bookshop while in other there will be a lot of specialized FLGS (Friendly Local Gaming Stores) that only sell board games, hobby games and roleplaying games. It might even be common for groceries to carry board games in your country. Some shops do have a playing area while other only sell the games. There are a lot of cultural differences from place to place, so if you can afford to travel and visit shops in other countries by all means go for it!

For each shop you visit, no matter its size and location, spend some time to hang around in their games shelves and  to understand how the shop works : what kind of games they carry, how they are displayed, how the light is arranged, what games are put forward and how, what kind of customers they are catering to, what level of service they offer, what are the price ranges of the games they carry, etc. If possible have a chat with the retailer, explaining him you are planning to start a boardgames publishing operation, and asking him questions about his day to day, what makes a game easy or hard to sell, etc. Also make sure to look at the customers : what games are they looking at, do they look like they are easily finding what they look for, are them asking questions to the staff, etc.

I recently heard in a podcast that Jay Tummelson, from Rio Grande Games said "Some Consumer games are packaged and marketed as gifts, the person buying them will never be the one playing them". Spending time in shops and looking at people purchasing games will you a lot of that kind of important information about retail, packaging, pricing, and marketing.

Supermarkets and department stores sometimes carry board games and should be the first places you visit. These are mass-market retailers. Probably not your target, but it is important to have that reference in mind when comparing it to other kind of stores. They focus on the sale, not the product.

Then, have a look at big stores that only sell toys and games. Some countries have chain stores such as Toys’R US, Maxitoys, etc. These are known as specialized retailers, stores that focus on toys and games only. Notice how they have relatively few different items (aka references or SKU - Stock Keeping Units), and relatively big quantities of each item. They operate in a different world than FLGS’.

After that you have the FLGS, which can either sell only board and hobby games or carry them alongside other goods such as comics and collectibles. These are called hyper specialized stores. Those are the main target of most board games publishers. Most of them are small operations, mom and pop stores, with very low quantities of a huge number of different items. They are 'destination stores', and only compete with each other in a limited geographic area so you may see differences in prices from place to place for the same item.

You will also see in some places small retailers that carry a few board games as part of their inventory. Book stores, record shops, grocers, ... These are also interesting to visit as they usually have a very limited selection so discussing the reasoning behind that selection with the retailer can be enlightening.

Chain stores that specialize in other items but do carry a selection of board games such as Barnes and Nobles or Target in the US are also interesting from that point of view. They carry board games as a way to expand the gamut of products they offer but they do need volume sales to justify keeping an item in store.

Visit online stores

They are the modern counterpart of that old staple, the mail-order catalogue. OLGS (On line Gaming Stores) have some pros and cons over 'brick and mortar' FLGS and are in a retail category of their own. They have slightly different economics as they do not have to pay rent for a premium commercial space, and can sometimes get very good prices on bulk purchases, but they are also subject to the constantly rising costs of shipping, and offer a very different shopping experience than a brick and mortar store. They also sometimes source their games directly from publishers rather than from distributors, in order to get a better deal.

Competition is fierce between OLGS and FLGS, and among OLGS too. This sometimes results in price wars as price is a key factor in consumer choice when it comes to OLGS. Their presence also limits the price differences between FLGS located in different places, as the OLGS has a much wider geographic covering. Take some time to study the price differences for a few games between OLGS and FLGS, and to understand the reasons behind these differences. You will find a lot of debate in online communities over the pricing of games, and the price differences between OLGS and FLGS. These are lengthy, not always very civil (and sometimes downright hostile) discussions, but you should at least take a couple afternoons to browse some of them in order to better understand the position of the various parties : shop owners, distributors, publishers, and customers.

Hard discounters

The last category of retail stores that sell board games worth knowing about is that of the hard discounters. They exist in online and brick and mortar forms, and sometimes on a temporary basis such as clearance sales at conventions. A good known example is Tanga.com. They are the end of the line, the place where games go to die. There are so many games published (more than 800 new games each year are announced at the Essen game fair in Germany alone) that not all of them can be commercially successful. When a publisher sits with a few pallets of unsold games, it becomes less costly to dump them to a discounter for a very low price than to continue to pay warehousing costs or to pay to have them destroyed.

Hard discounters buy end of life items in bulk, and fire sale them at very low price. Their business model is to move a lot of items fast in order to clear a small margin over the volume.

However, selling a game such as Cavum for 12€ during the Essen fair in order to clear up stock only two years after its release is not without consequences. First, if there are still retailers that bought the item at normal retail price (50% MSRP), they get - well I can't find a way to say that nicely, but you get the picture -

Also for many customers, it will become 'the price' for that game. Good luck selling one at 35€ to someone who knows it was sold in bulk at 12€ at the last convention they went to. This effect is moreover global - Essen fire sales may affect the perception of price for US consumers too. Publishers that pull that kind of stunt too often will not get a lot of love from retailers down the line. So even though it costs money to warehouse the unsold games or to have them destroyed, it can be a better option than the clearance sale. It can however happen that the publisher has no control about this : if a distributor or sub-distributor has stock and decides to clear it up, or an online shop with a sizeable number of units in stock decides they are not moving fast enough, they might very well dump it without the publisher knowing. Some publishers gladly offer to buy back unsold inventory to avoid that kind of situation, or have a few choice words about the seller once they learn about it. This downright 'kills' a product. As a publisher, you should keep this in mind when dealing new contracts with distributors and make sure this won't happen when your contract ends, whatever the reason.

Read publishers and retailers blogs and podcasts

Several publishers and retailers have a blog or a part of their website where they post articles about their business. These are worth your time. They provide a lot of from the trenches information, and cover actual business stories. Gary Ray's excellent 'Quest for fun' blog ( http://blackdiamondgames.blogspot.com ) is one of the best resource I found to understand how an US based FLGS works. This allowed me to compare that to European FLGS and to make better decisions when publishing games for the US or European markets. Podcasts from publishers, such as Plaid Hat Game's podcast ( http://www.plaidhatgames.com/podcast ) are very similar to blogs so they belong here too. The Purple Pawn's 'Paper Money' podcast ( http://www.purplepawn.com/category/papermoney ) hosted by a veteran from US board games retail (Rett Kipp) and another veteran from games manufacturing (Ben Clarck) is a great source of information on the business side of the games industry. There are lots of information there to read and listen to so go ahead, sample all of them and dig further in the ones that you feel are more relevant to your publishing plans.

Read company histories

On publishers websites as well as on Wikipedia and some fan sites, you can find accounts of the history of many board games publishing companies. That is also a very interesting resource to learn why companies succeeded or failed, in what historical and economic context, with what kind of games. Did you know that Fantasy Flight Games started publishing by bringing European comic strips to the US market ? That Jim Dunnigan, SPI founder had started by designing wargames for Avalon Hill (Jutland, Panzer Blitz, 1914) and was also working as a consultant for the military ? That's the kind of things you will learn there. It might look like irrelevant trivia (and sometimes is) but it might help you avoid some mistakes that sunk other businesses in the past.

Visit clubs, conventions and trade fairs

You need to go out and meet players. They are your future customers so you want to understand them, their motives, likes and dislikes. Gaming groups and clubs are a very good first step. They are usually small-sized so you can get to meet everyone, make some friends, and experience they way they use board games. Then, going to conventions and trade fairs will allow you to up scale the experience, and get a more broad view of that community.

One key lesson to bring home here is the way games are recommended by players to players. This is a prescription medium, where games are experienced based on advice from other players. There are 'alpha' players that go out of their way to seek new games and try them, and other that are very happy to sit down and play whatever game a trusted gamer friend will bring to the table and teach them. Some people will be there for the competition, some for the social and community aspects, some for the intellectual challenge offered, some to try new games before they make a purchase decision, etc. You will need to understand the different motives that bring people to a game table, a game club, a convention, trade fair, or other event in order to make educated decisions when publishing your games.

Talk with retailers, authors, publishers, distributors

As I said earlier, just ask. Volunteer to help a retailer for a few days, and use that occasion to talk with him about his business. Meet authors, publishers and designers at conventions and trade shows and see if they have some time to 'talk shop' and hang around. (Actually a convention or show might not be the best time as they often have a lot of scheduled things to do, so make sure you're welcome. Ask if you can meet at a quieter time, around a drink instead.)

As you make your plans to become a board games publisher known, you will get more occasions to meet with other professionals, and will find that most of them are very willing to share information and advice. Do not fear to talk about a game (after you have signed it) with retailers and distributors way ahead of actual publication, as they will gladly challenge your decisions based on their experience on topics such as box size, price point or box art for instance. They will end up selling it so they want it to be a better product as much as you do.

Publishers are more colleagues than competitors to each other, in fact. Of course there is competition to be the first to sign a hot game from a designer, or to be the first to market when two games have similar themes and target audiences, but for the most part publishers talk to each other about their current plans, and comment on each other's decisions. Some are very competitive and secretive, but there is a very friendly atmosphere overall.