Kickstarter and the Boss Monster

A couple of weeks ago, Brotherwise Games sent me a copy of their Kickstarted game, Boss Monster.  Normally, as those who read this column regularly know, I am not a big fan of Kickstarter or Kickstarted games for three reasons:   1) People who are really interested in the game, and thus the most active purchasers, will buy it during the Kickstarter campaign; 2) Most companies using Kickstarter use a “fire and forget” approach to marketing their game.  Once the launch is over with, that’s it.  The company sells what they can of the production run and moves onto the next product with no program or strategy in place to promote their current catalog, 3) When companies offer retailer levels, either the retailer has to wait a long time to receive the product, often not getting it until after consumer purchasers received theirs or the retailer level does not offer enough of a discount from retail price to justify the investment.   In the first case, while the Reaper Bones Kickstarter offered a great deal for retailers, it still remains that the consumer market will be flooded with figures from the Vampire level long before the first of the retailer packages ship.  In the second case, not more than thirty minutes ago I received an email from a new company touting their new game on Kickstarter, offering a retailer level price of $15 on a game with an MSRP of $26.99, giving stores a  retail markup of 44%, not enough to justify taking a flyer on an untested product, when I know I can invest the money in other games, get a larger markup and know they will sell.

So what do I like about Boss Monster and Brotherwise Games?  First, it circumvents problem number one as I have had people contact me about purchasing Boss Monster after they played it with someone who backed the game’s Kickstarter and other’s have shown interest in it after playing our demo copy.  The whole “People who buy the game via Kickstarter, play it with their friends and their friends will buy a copy from the local FLGS” rational for bringing in a croudsourced game has never held up in practice, with this the first one I remember people wanting to buy after the original release (well , this and Cards Against Humanity, but that’s a special case).

There was no retailer level in the original Boss Monster Kickstarter so that problem really didn’t apply (looks as if they raised plenty of money to get the game into production without any funding from retailers).  It looks as if Boss Monster will solicit through regular channels of distribution.  At least  part of their promotional campaign (moving on to #3) involves ads in both Alliance’s Game Trade Magazine and ACD’s Meeple Monthly, as well as sending out promotional copies of the game to both tabletop and video game websites.. Whether or not any of the sites receiving a promo copy write it up, you don’t know.  That’s the nature of public relations, no control over outcome.  It’s not a detailed plan, certainly not a long term one, but it is more than many companies launching a Kickstarter have after the production run ends, putting the company ahead of the game, so to speak.

From the Vault-Twenty Pre-orders

Since we have had a lot of people calling us about pre-orders for From the Vault-20 (the announcement of Jace the Mind Sculptor as one of the cards really spurred that), here is how we will handle pre-orders:

1.  We still don't know how many we will receive so are not taking any money currently, just names. We will post on Facebook, Twitter and the store website when we will take payment.  If you do not pay by a week before the release date, we reserve the right to release your hold to the next person in line.

2.  We are allocating FTV20 according to the following criteria in the order listed:

a.  people who play Magic at the store as shown by participation in DCI Tournaments here (minimum 2 tournaments in the previous two months) AND who have a Preferred Customer Card.

b.  customers who have a Preferred Customer Card but do not play Magic regularly

c.  Magic players who have played in at least 2 DCI Sanctioned tournaments here during the previous two months.

d.  anyone else who does not fit the previous criteria but is a customer of the store.  We have no desire to sell From the Vault Twenty to people who call the store from Pennsulvania or New Mexico (or England).

Getting on the list does not guarantee that you will get the opportunity to purchase a FTV20.  It means you will be among those offered the opportunity to purchase one at MSRP ($39.99) You will only be guaranteed to get one after we take your money.  Giving us your name in the store is the surest way to make certain we get you on the list.  Calling in is second best.  Contacting us via email, Twitter or Facebook risks the message getting lost so if you do that, be sure to follow up.   Also note that we will keep a few for prizes in future events and sale in the store.

Thoughts on Magic 2014 Prerelease

Writing this midway through our Magic 2014 pre-release weekend, which has proven the lowest attended pre-release in years.  I don’t know if that is due to the fact that it is a core set, that it is the middle of summer, that 30% of my customer base has left for three months, that we passed on running a midnight release, or that we didn’t do as good job ginning up excitement for this set, but attendance for the Saturday ‘s tournaments has run less than half what we saw for Magic 2013.  Other stores have reported similar light turnouts, with one saying they barely seated 8 people for their first event (In fairness, other stores have reported doing very good numbers but nowise near to a block pre-release).

I did like the change in the Achievement Cards, wherein players actually got something for completing each color’s list of achievement, as completing a set of achievements earned a redemption code allowing the player to put that Planeswalker’s  on their page on the Wizard’s website. Still though, some of the achievements were out of the player’s control, such as “Play in a 2-headed Giant event at the Magic 2014 prerelease”.  What happens if you play at a store that opts not to run a 2-Headed Giant event (like ours.  We tried 2-headed Giant once at a pre-release and could not scare up enough participants to make four teams.  Even the guy who asked us to run one didn’t show up).  This means none of our players had the opportunity to get the Ajani badge, while playing in a tournament with low turnout means no completion of “Call the Hunt” (play in a tournament with at least 25 players) so no Garruk badge.  Also, a couple of the achievements require a player to win a round which can prove problematic should the player crack a weak set of packs.  Yes, I know the players can keep the cards and complete the achievements during the Magic 2014 league.  However, in all honesty,  how many of our Magic players will remember to hand onto the card until the Magic 2014 league.  Still, I like the idea of rewards for performing actions during a tournament, so we entered each player who completed a set of achievements in a drawing for packs of Modern Masters (courtesy of ACD Distribution), which the players did enjoy getting (Not surprisingly). 

Death and Taxes (Well, Taxes)

Following up on the last post about Amazon and taxes, the whole argument Amazon and other online merchants make about the difficulty of collecting sales taxes from and remitting them to hundreds of thousands of localities does not hold water.  As this article points out, Amazon has had software in place since 2008 that calculates sales tax for all merchants using the website as a storefront from which to sell.  Any issue of Direct Marketing News also advertises software that will calculate sales tax for any location in the US.  Granted the software might be pricey for a smaller online retailer but collecting sales taxes nationally is feasible.

A more fundamental obstacle comes from people's misunderstanding of the nature of sales taxes.  45 states, the District of Columbia and Guam all collect some form of sales tax. In those states, the sales tax provides the largest amount of funding for services offered by states and communities.  The first misunderstanding comes when people, and even some stores, refer to stores "charging" sales tax.  Stores do not charge sales tax, stores collect sales tax.  Stores that collect sales tax have been designated by the tax collecting authority within the state with the responsibility of collecting sales tax on items sold at retail and remitting the tax collected to the state (Items purchased for resale are exempt from sales tax).  In some states, the store receives a percentage of the sales tax as payment for performing the collection, in other states, the total amount goes to the state treasury.

The second misconception is that because a business does not collect sales taxes, that somehow exempts the purchaser from owing the taxes.  This is plain wrong.  In Quill vs. North Dakota, the Supreme Court ruled that businesses "without a physical nexus" within a state were exempt from the requirement to collect sales taxes from customers within that state.  That ruling did not exempt the customer from paying the sales tax to the state.  This is often called a "use tax" and there is usually a line to pay the total use tax on a state's income tax form, assuming it collects one.  In practice, few people pay the use tax and collecting it is so time consuming that most states forgo chasing after it, leaving lawyers and tax attorneys the primary ones who pay it, costing them about $23 billion per year.  About a decade ago, Illinois made a concerted effort to collect unpaid use taxes but wound up spending almost as much in the attempt as it collected.  The Marketplace Fairness Act, passed by the Senate but likely going nowhere in the House of Representatives would overturn Quill and require online and mail order retailers doing over $1 million to collect and remit sales tax from all customers.

A third misconception, and this is one that was repeated by the COO of Amazon, Nathan Bennet so he either really does not understand how sales taxes work or is deliberately ingenuous about the topic, is that online and mail order businesses should not collect sales taxes from a remote customer because the business gains no benefits from the tax.  This, of course, is simply wrong since the tax is collected, not for the benefit of the business, but for the benefit of the customer.  The funds generated by the sales tax are designated to fund projects in the community and state where the customer resides, not to benefit the business that collects them. The business serves as the most efficient conduit through which the sales tax money flows and, in many states, having a license to collect sales taxes is a requirement for doing business (also a requirement for opening an account with many distributors).

Of course, as I noted in the last post, the direction Amazon plans to take will give it physical nexus in all 50 states, requiring it to collect and remit sales taxes, like Wal-Mart, Staples, Barnes & Noble, etc., regardless of Quill, which is why now the company supports requiring online retailers, including itself, to collect (and remit) sales taxes.  Amazing how your viewpoint changes when the new vantage point benefits you.