3 Things For Which I Am Thankful

Since this is the season in which we traditionally give thanks, not that we shouldn’t do it the other 11 months out of the year,  I wanted to point out four things (aside from health, friends, chocolate, etc) that make me thankful:

1)      WOTC finally pulled the plug on Kaijudo. Yes it was a good game. Yes, I know at least one store did really, really REALLY well with it. However, for every store doing good with it, I can point to 25, including us, that did not. Not for want of trying though, either on WOTC or on our part. We received more promotional material for Kaijudo than we did for Yu Gi Oh, Pokemon or Cardfight Vanguard combined. We ran events almost every week that the same 4-5 people attended but product sales were infinitesimal. Now, I hope, WOTC will take the promotional dollars it poured into Kaijudo and spend them promoting Great Dalumuti, Gullotine, Acquire or some of the other great boardgames in its catalog. Unfortunately, even now I can hear some marketing genius at WOTC say, “You know, if we just did this with DuelMasters…”.

2)      The Bits ‘n Mortar program.  Bits ‘n Mortar doesn’t get nearly enough publicity as it ought but this consortium of small RPG publishers still has their program in place, allowing registered brick and mortar retailers to give a PDF of their products to customers when said customer purchases a hard copy of the RPG.  We have customers who purchase Crucible 7 and Arc Dream RPG products specifically from us on a regular basis specifically because we participate in this program.

3)      Munchkin (and Steve Jackson Games). The base Munchkin game still sells reliably week in and week out over a decade after it first released.  Unlike some other game lines (cough-X-wing Miniatures, DiceMasters-cough), Steve Jackson Games manages to keep the almost the entire line in stock through distribution and, although they have run special sets through Target and Barnes and Noble, I have not seen them participate in any deep discounting or “Buy One, Get One Free” silliness such as appeared on the Target website last week.

And since ‘tis the season for giving:

4)      The “TableTop Bump”. Though the TableTop bump was more like a hiccup in season 2, it seems to have returned for season 3, though not to the levels of season 1. Most stroes reported Tokaido hard to find and our sales of Forbidden Desert increased significantly with the uploading of last week’s episode. Seemingly any TableTop show with either  Anne Wheaton or Felicia Day proves especially strong in selling the featured game as they play off Wil Wheaton so well.

Shop Local and Win Contest

Starting this Friday. Come by the store for your punch card.

Snake Oil Elixer and The Power of PR

After last week's post on the lack of retailer buy-ins for Out of the Box's Kickstarter campaign for the Snake Oil Elixir launch, I received a call from Out of the Box president Al Waller.  We spent the next 25 minutes discussing the column, the Kickstarter Campaign and Out of the Box's plans for Snake Oil.  It turns out my guesses about the reasons for the Kickstarter were pretty close to correct.

The first thing Waller wanted to make clear was that the company did have plans for retailer levels for the Kickstarter campaign but due to oversight and the rush in getting OOTB's first crowdfunding campaign off the ground, they were not included.  Two retailer levels are now included, one at a five copy buy-in and one at 10 copies.  Both include demo copies of the assorted Snake Oil games as well as other OOTB games at the higher level.

He also confirmed that promotion for Snake Oil Elixir was one of the two major reasons for using Kickstarter.  Much like North Star Games and Popcorn Press, Out of the Box has noticed the attention those games that successfully fund on Kickstarter receive and chose to use it as a promotional tool for the company.  The plan is, over the next few years, to make Snake Oil into a brand strong enough to support several extensions, such as Settlers of Catan or even Apples to Apples (once owned by Out of the Box but sold to Mattel in 2007) are able to support.

The other reason, Waller said, was to get the game into print more quickly.  While many people in the industry view Out of the Box as a comparatively large publisher in the gaming field, they are actually a very small operation with only a few people on staff.  The recession of 2007-2008 hit them quite hard, as they went from 5,000 outlets selling their products to roughly 1,500.

Out of the Box, based on the sales of the previous Snake Oil games and the awards the game has received, believesa market exists for Snake Oil Elixir.  However, showing off the prototype at last spring's Toy Fair, the largest trade show for the toy and game industry, did not generate enough orders from retailers to justify a production run.  Jump forward to Gen Con where showing the game off generated much more enthusiasm from the gamers attending the show, enough that Waller felt much more comfortable going ahead with a production run.  The question then became:  when to launch the game?  If Out of the Box relied solely on its own capital to produce a 5000 copy run (OOTB’s usual print run for the first printing of a game), it appeared Snake Oil Elixir would not hit distribution until late 2015 or the first quarter of 2016.  By crowdfunding the first print run, the game could move into distribution by April or May of 2015, having it available for sale by Origins and Gen Con.

So now I have a better understanding of why OOTB opted to use crowdfunding and two retailer options for participation in the Kickstarter.  Is it perfect?  Of course not.  Ideally, Elixir would launch in April with no crowdfunding, but that's not happening.  At least now, those retailers that wish to have the option of participating.

Speaking of perfection both Wizards of the Coast and AEG are launching products for release on Black Friday:  the 5th Edition Dungeon Masters Guide from WotC and the Holiday Black Box from AEG.  For participating retailers, both companies have the products scheduled to arrive the Wednesday before Thanksgiving with instructions to hold them until Friday.  Here's hoping shipping works out as planned because this is cutting deliveries too close to release date for my taste.

Changes to Dice Masters Tournaments

WizKids just sent out the following change to sanctioned DiceMasters tournaments:

Hello Dice Masters Fans!

We’re working on rolling out a change for how Swiss Rounds for Dice Masters are played in tournaments. Instead of Best of 3 Matches, the suggested format for the Swiss Round portion of a tournament will now be single-game matches with a suggested time of 30 minutes per round. This will apply to Monthly OP and Storyline OP events.

This may seem like a major change, but in talking with players and store owners we believe the net change will result in more meaningful and positive play experiences. Spending the majority of a round trying to claw back from a first-game loss can be frustrating, as can waiting for other games to finish if yours ended early. Getting you to your next game sooner should actually provide skilled players who were unlucky a better attempt to place well in a tournament.  Additionally, feedback has been that players change their play method in the final games to draw them out to time — this isn't good for anyone. Furthermore, unlike other games, there is no hidden information in Dice Masters for players to have things go very differently in games two or three.

For stores, shorter round lengths should make Dice Masters events more accessible. Players getting to play against more unique opponents lends itself better to growing a Dice Masters community within the store. Running events on weeknights is also more viable when rounds can be shorter. As always, at the beginning of an event the format should be made clear to all players; for example; 4 Swiss Single Game Rounds followed by a 4-person top cut with Best of 3 Single Elimination.

Stores are still welcome to allow Best of 3 play if they believe that is what is best for them, and Best of 3 is suggested for top cut playoff matches, particularly for large turnouts.

We appreciate our fans’ continued enthusiasm as Dice Masters continues to evolve as a game and a brand.

-The WK team

Fantasy Flight Merging

Fantasy Flight Games just announced a merger with the Asmodee Group. According to the press release, the main purpose of the merger is to enhance Asmodee's reach in the US and give FFG greater access to the European market:

The Asmodee Group of game companies will gain access to Fantasy Flight Games’ strong sales, operational and marketing infrastructure in North America, as well as Fantasy Flight Games’ almost-20 years of expertise in game development and multi-language game manufacturing.
Fantasy Flight Games will benefit from Asmodee’s impressive distribution and marketing reach in Europe, greatly improving its product placement and organized play initiatives across the continent.

Given both companies' problems with out of stocks , I can see this making the problem worse as neither company indicates any plants to increase production runs to complement the increased access to the respective market.

Annoying Kickstarter

Out of the Box Games just announced a Kickstarter campaign for a follow up to their highly successful Snake Oil game:  Snake Oil Elixer.  This annoys store owners for two reasons. First, Out of the Box Games is a fairly successful small publisher with a number of award winning games to its credit. Unless the company wants to run the campaign for publicity reasons, as North Star Games did with its recently released Extinction game, I am not sure why they are doing this. Kickstarter has proven a fairly effective means for companies to promote new products. Popcorn Press launched its new d6xd6 CORE RPG with a $1funding goal so the game could get the publicity boost from funding.

Kickstarter has gotten so ubiquitous though, that most retailers have accepted it as a component of the business climate and will make decisions on whether to stock a game or not based on how actively the publisher uses Kickstarter, as the most avid fans of a game tend to want it, and the stretch level bonuses, when it is released via Kickstarter, rather than waiting to get it in the store when it hits distribution later. However, if a retailer think a game has "legs" and will see demand after the initial rush, we will stock it, if there is an option provided for retail purchase. While most Kickstarter levels only offer a single copy of the game, with accompanying bonuses, a retailer level typically gives the bonuses plus multiple copies of the game. We expect it to sell so we are willing to buy several copies.

That's the big problem with the Snake Oil Elixer Kickstarter:  no retailer option. I know retailers who have sold hundreds of copies of the original Snake Oil games and have spent quite a bit of time and money promoting it. They are not particularly happy they will not have the ability to sell Snake Oil Elixer until months, most likely, after the Kickstarter funds and ships and the initial enthusiasm for the game has waned.

Stores that have done well with Snake Oil in the past will likely carry Snake Oil:  Elixer, but likely not with the same amount of support they game to the other Snake Oil versions.

New FFG Releases

The following items will be leaving our warehouse today and next week and they will have a Distributor Ship Date of November 24 (Monday).

New Releases:

WHK02 Warhammer 40,000 Conquest: The Howl of Blackmane

SWX23 Star Wars X-Wing: YT-2400 Freighter

SWX24 Star Wars X-Wing: VT-49 Decimator

VA90 The Witcher Adventure Game

Reprints:

FFS01 FFG Supply: Mini-American Boardgame Sleeves

FFS02 FFG Supply: Mini-European Boardgame Sleeves

FFS03 FFG Supply: Standard American Boardgame Sleeves

FFS04 FFG Supply: Standard European Boardgame Sleeves

FFS05 FFG Supply: Standard Card Game Sleeves

HBO02 HBO Art Sleeves: House Stark

HBO03 HBO Art Sleeves: House Lannister

HBO05 HBO Art Sleeves: House Greyjoy

HBO06 HBO Art Sleeves: House Targaryen

The Relative Importance of Organized Play

I received a call from Wizards Customer Support last week regarding the change over to paperless entry of new players to the DCI system, but no idea if it came in response to last week’s column or not. I got a walkthrough the new system, which has not actually implemented yet, as well as help in merging my WOTC customer and DCI accounts, which turned out a whole lot more difficult to do than I had expected, apparently mainly because I had jumped on the bandwagon early and converted over the store DCI account to the new system already. I gather ‘tis easier to covert over the customer account first, then merge your DCI account with it, rather than the other way around (and does my WOTC account password really need upper and lower case letters, at least one number AND a special character? That is as secure a password as my bank requires and I certainly do not store any financial information on the Wizards website). 

This got me to thinking, again, about the importance WOTC places on Organized Play and comparing it to the utter lack of importance another pillar of the industry, Games Workshop, places on it.

Let us compare the two.

WOTC has a very structured OP program, with stores expected, or at least encouraged, to run OP events, either provided by WOTC itself (Friday Night Magic, Magic Game Days, the late Kaijudo Draft program, D&D Encounters and so forth and so on) or set up by the store (Magic, casual Magic, casual D&D). Stores can either schedule  events weeks or months in advance, with promotional materials and support often provided, sometimes hundreds of dollars worth of support) or set something up on the fly, as a group of players come in and settles down for an evening of Magic or D&D. The company has made the DCI Reporter software integral to its OP program and updates the software on a regular basis. The weekly sales tips sent out from Wizards Customer Support usually (but not always) focus on how to enhance a store’s OP program as integral to the success of Magic and, to a lesser extent, Dungeons & Dragons.

Games Workshop, on the other hand, has no Organized Play program. As a couple of my customers commented the other day, Games Workshop views its line of Warhammer products as “beer and pretzels” games. Very expensive beer and pretzel games certainly but still games meant for play between friends who get together for a casual afternoon, not those who get together for tournaments.  Though players do actively play Warhammer and related games in tournaments, these are player created rather than company created events. Games Workshop has even, as far as I know, eliminated their old “Rogue Trader” program. However, unlike WOTC, I get weekly sales calls from Games Workshop and up to $1500 in credit to apply to store armies, paint stations and other GW product used to enhance game play in the store. Both companies realize the importance of in-store play, they just approach it from different viewpoints.

The Ol' One-Two from WOTC

WOTC hit stores with a one-two punch this past week, one that will hurt somewhat starting next year and one that I do not know what the future effect will be and how to react to it.

Punch #1—WOTC announced that, starting late December, stores will receive 2% less gross margin on all Magic product (D&D and Avalon Hill product lines excluded), with the MSRP unchanged. What does this mean in non-retailer speak?

MSRP stands for Manufacturer’s Suggested Retail Price. Most products you buy release with a suggested price set by the manufacturer. The retailer has the option of selling the product at MSRP, below MSRP or above MSRP. Selling below MSRP is commonly called discounting while selling products above MSRP generally reflects a lack of availability of the product (see Betrayal at House on the Hill, by coincidence an Avalon Hill game, which has a MSRP of $49.99 but often sells for over $100 due to scarcity).

Gross margin is the difference between what the retailer pays for a product and what the store sells it for. As noted in last week’s column, all retailers pay less for products then the MSRP (except for loss leaders but those are not commonly used in the gaming industry, though, by an incredible coincidence, Magic is often used as a loss leader by many retailers. More on loss leaders in another column). MSRP on Magic boosters is $3.99, meaning that, despite what your local store or online place might tell you, the MSRP on a display of Magic boosters is $143.64. Most stores sell full displays of Magic boosters for slightly less to much less than that. This, as noted above, is called discounting. It does not matter at what price the retailer chooses to sell Magic boosters, the price the store pays is figured as a percentage off that $3.99 MSRP. Starting in late December, the percentage off paid by every store will shrink by 2%, effectively meaning a 2% price increase in Magic to every store carrying the product.

As noted last week, typically when there is a price increase businesses pass them along to the customer (sorry but that’s the way business works). Unfortunately, due to the MSRP on Magic not changing (the price on Magic boosters last increased from $3.69 to $3.99 back in 2006. If Magic pricing kept up with inflation, it would cost around $4.25 a pack right now) and the prevalence of discounting on the product, stores will find it almost impossible to raise the price 2% to recapture that lost margin. That means the store will have to accept a lower gross margin on Magic products, meaning less profit for the store. A store that is diversified (carries lots of different products) will be hurt a little. A store relying heavily on Magic sealed product for sales will find 2% of its operating budget vanishing overnight. Ultimately, due to the importance of Magic sales in many stores, retailers will absorb the profit loss and find areas to cut in small ways. We may reduce a staff member's hours, reduce prize support or put off buying new fixtures for the store.

Punch #2—WOTC will move to paperless recording of DCI number. Currently, players fill out a DCI card to get a number with which to play in sanctioned tournaments. WOTC will now allow players to register for a DCI number directly online. Since a store’s standing with WOTC partially depends on how many new players it registers per year, understanding how WOTC will now capture new players per store is of quite a bit of interest to stores, but certainly not as financially imminent as Punch #1.