Happy New Year

Happy New Year. Welcome to 2020. According to the Cyberpunk RPG, we were supposed to all have cybernetic implants by now. Not happened yet. However, we do have Buy one get one of equal or lesser value on Yu Gi Oh packs and back issue comics on Jan. 1 2020.

Hammurabi’s Code and you

 I' ve been  reading up on one of my favorite topics, consumer behavior and how it can be influenced.  From a marketing and game store point of view, you can use these methods, which date back almost 40 centuries of recorded history and are based on the concept of recipricosity,  to influence your customers or conversely, recognize when they are being used on you. Without further ado:

1.       Ask +Because—Just asking someone to do something for you can prove pretty powerful. It is rather amazing but people view you more favorably when you ask them to do something for you than when you offer to do something for them. To make the ask even more powerful, give them a reason why you want them to do something for you. It doesn’t have to be a good reason really, just a reason.   “Because” appears a pretty powerful word.  In one hidden study, people standing in line at a copy machine were asked by the experimenter if they could go first. Most of the time, the experimenter was told “No”. However, if the line cutter gave a reason such as “Could I go ahead of you because I need to get these done for my boss,”, over 70% of the time, the response was OK. In some cases, the line cutter even said “May I go ahead of you because I want to go ahead of you,” and over half the time the people in line would agree. 

2.       Foot in the Door—A small ask opens the door to a much larger one.  Fairly often, one of the banks I do business with will offer me a $1000 life insurance policy at no charge. By accepting the offer, I give them the opportunity to come back later and pitch me a more expensive policy.  WOTC’s D&D Starter Set is one of the best marketing tools any company in the gaming industry currently uses and is a wonderful example of using the “foot in the door”. Get people to try out a low cost version of the game, then, when they find they like it, upgrade them to the more expensive version.

3.       Give a Gift—Giving a gift before making a big ask enhances the likelihood that the person you give the gift is more likely to say yes. This is why so many charities send you stuff like calendars, note pads, address labels etc. when  sending a letting asking for a donation. The idea is, by giving you a small gift, you will be more responsive to the part of the letter asking for the donation. Over the past year, I have even seen charities move one step beyond that and small amounts of cash, a nickel, 50 cents, even a dollar or two with the plea that you send back the money to help them along with your donation.

All of these, as noted above are based on the concept of recipricosity.  If someone does something nice for us, we are influenced to do something nice back. If they do something harmful to us, we feel justified in doing something harmful back. The concept has been codified back as far as Hammaurbi’s time, about 1754 BC and is still valid today.

Stranger Things RPGs

It appears that the success of Nexflix’ Stranger Things will have an effect on the series source material. One of the key points of the series was the bonding of the main characters over their shared enjoyment of the Dungeons & Dragons RPG. Even Games Workshop gets to make a cameo appearance in one scene as the camera shows one of the characters painting a Citadel figure while talking with another character.

So flipping through the current issue of Alliance Distributions Game Trade Magazine, what did I spot but a couple of RPG’s set in or inspired by 80s style RPGs and culture. The first one I noticed comes from Fat Goblin Games, which by the way also publishes adventures suitable for use with 1^st edition AD&D and is titled Vs. Stranger Stuff:  Send In The Clowns. From the GTM descriptive text:  Send in the Clowns is a special edition of vs. Stranger Stuff, a mini-roleplaying game of 80’s inspired adventure/horror/sci-fi, typically involving children and teens. At $14.95, it looks inexpensive and interesting enough to stock in, especially if you can tie it into interest in the upcoming second season of Stranger Things.

The other offering is Monte Cook Games’ much pricier expansion for the company’s Cypher System, Unmasked. From the GTM description:  It’s 1986. Top Gun is in theaters, “Papa Don’t Preach” is on the radion, Hailey’s Comet is in the sky and IranContra is in the news. The Russians are in Afghanistan and the Doomsday Clock is at 3 minutes until midnight.

But that doesn’t matter. Because at school, at the mall, down by the 7-Eleven, you’ve started seeing things others don’t. Hidden power glowing in what seem to be everyday items. And when you follow that strange compulsion to create a mask from those items, you become…someone else. Someon with abilities and strengths the world has never seen, and agaend that may not be your own. And there are others, with their own agendas. Maybe that Doomsday Clock matters after all… Superpowers. Horros. A Dark 80’s.

Again, an interesting sounding premise that opted to get set in the 1980s rather than in some unspecified time as most modern format RPGs do. The page long GTM preview makes the game sound as if it would be a pretty interesting novel. I am not sure how well it will work as a RPG. However, as noted earlier, this is not a stand alone RPG, it also required the players to have a copy of the Cypher System core rulebook, meaning that anyone wanting to play Unmasked needs to plan on spending over $90, around $50 for the core rulebook and another $45 to pick up a copy of Unmasked. Although WOTC and Pazio have both demonstrated the willingness of consumers to shell out the necessary $50 for a core rulebook, there is still a significant amount of price resistance among customers regarding purchasing expensive rulebooks that don’t have the Pathfinder or Dungeons & Dragons logos on them.

Deckbuilding Games and the Product Life Cycle

An overheard comment about the introduction of yet another deck building game to the market set me to thinking about the number of deckbuilding games, the product life cycle and what the PLC means for this particular segment of the market.

The product life cycle consists of four stages:  introduction, growth, maturity and decline.  All products go through all four of these stages, some at a faster rate than others (roughly 50,000 new products come onto the market every year, only about 10% of them stay in production for more than five years).

The introductory stage of the PLC is always the most exciting part of a product’s life.  The manufacturer has this cool new idea for a great new product(Dominion) or an interesting take on an already existing one (Ascension).  The manufacturer has (hopefully) playtested it extensively, made mockups or prototypes, lined up a production option, either in-house or outsourced and lined up financing, again either through theirself or, quite commonly today, through an exterior source such as Kickstarter or Indiegogo. The manufacturer is also all over Twitter, Facebook, TheyTube and any other media source  to which they can get access, talking about this cool new product and trying to get others to do the same.   During this stage, while their sales increases hit double or triple percentages, their expenses far exceed their revenues.  In short, they are losing money on the product until they hit the breakeven point, at which their revenues cover their expenses. 

Now, they move into the growth stage of the product life cycle.  During this stage their promotional efforts slack off as others have, hopefully, picked up on the buzz their original efforts generated for their products.  This means less expenditure on promotion, allowing they to divert more of the gross profits to cover fixed costs.  If they allocated revenues well, they start making a net profit during this stage.  As their product gets wider notice in the market though, sales start to slacken from the triple or high double digit growth they posted after the launch.  They should still see growth in the low double digits though.

The characteristic of the growth stage that makes me think the deckbuilding category is exiting the growth stage and entering the maturity stage of the PLC is that, towards the end of the growth stage, competition products start to enter the market.  Competitors see how well this product has done satisfying consumers and want a piece of the action, so they enter the market with similar products, planning to capture a share.  Currently, I count a minimum of ten deckbuilding games on the market, with more on the way.  Nothing says more clearly that the market for deckbuilding games has matured than the number of companies announcing their entry into the market.

What happens during this stage?  Profits for early entrants into the market continue to increase as their expenses likewise continue to drop.  However, sales increases drop to single digits and start to decline towards the end of the cycle, as the product moves from maturity to decline.  One sure sign that the market has moved from maturity to the decline stage of the PLC is competitors pulling the plug on their products and announced product launches never making it to market. 

During the decline stage, sales drop, either slightly or precipitously and they must decide whether the continued sales justify allocating resources to keep the product available or to harvest the product, cease production and direct those resources to another area.  Deckbuilding games are still far from this stage but it will come, likely sooner than expected.

The Mandela Effect

Ran across a discussion of the Mandela Effect today. The Mandela Effect occurs when you "remember" something that is not so. For example, does Rich Uncle Pennybags, from Monopoly, wear a monocle? Is C-3PO all gold?  The answer to both questions is no but most people, until you show them, say "Yes".

Broken Business Model?

One common recommendation proposed by online purchasers to alleviate the travails of the brick and mortar store is to give customers the deep discounts they want while moving to more of an event center or club model, wherein the store provides table space and terrain and other accoutrements and in return the players pay a fee for use of the space. I noticed one poster who said he (or she) would “be happy to give the store a buck or two” as a thank you for using the space. Stores relying on this model in the US have had a notoriously short lifespan and, while some posters indicated this method was wildly successful throughout Europe and they may be  correct. However, when I visited France a few years ago, courtesy of WOTC, and got the opportunity to look at several game stores, I noticed they used the same antiquated model that prevails here in the States, offering both merchandise and event space. In fact, with even higher per square foot rents than found in the US, the more desirable front of the store was given over to merchandise space while event tables got shunted to the rear of the building or even an upstairs location.

Open

Yes, we are open tonight. Until 9 p.m. then open again regular hours tomorrow. New comics on the shelf tomorrow but no new restocks otherwise.

Facebook for the Holidays

Facebook has become the go-to advertising medium for most people in the hobby game (and comic) industry, much to the dismay of my local newspaper publisher. We were discussing advertising earlier this week, well, he wanted to convince me to buy advertising since he reaches 35,000 people daily but didn’t have a very good answer when I asked him if he could get my message out to just those that were My Little Pony fans or Ticket to Ride players.  Unfortunately, despite the growth in boardgaming,  the industry is still a niche market, only doing a fraction of the sales that video games or movies do, meaning that Facebook, and other social media, with their capabilities to target specific niche market segments more so than traditional print media, prove very valuable to stores operating in the industry. That is why I found this holiday advertising guide sent out by Facebook interesting, especially some of the statistics the company provides (All of the statistics quoted come from the guide).  Like many “ebooks” , it has about 1-2 sentences in large type per page so you can read it in just a few minutes.

Granted that Facebook conducted the research but the statistic saying that 49% of surveyed shoppers indicate that Facebook will prove influential in their holiday buying give a pretty good indication that, if you want to reach holiday shoppers, you need to plan on having some form of Facebook presence. Even if most of your holiday sales come in the form of gift cards or certificates, a store needs to have top of mind awareness in the mind of the customer and making sure your customers see you on Facebook is one was to achieve that.

I don’t know if it is a case of chicken and the egg but Facebook’s research says that 47% of  consumers start thinking about holiday shopping prior to Halloween. I am not certain if we do that because of the avalanche of Christmas merchandise  and décor we start seeing in September, or if retailers put out the holiday stuff in September because customers already start thinking about it, but seeing Christmas merchandise alongside black cats and Halloween candy is a fact of shopping today. Incidentally, Facebook also says that time spent by users on the website starts increasing in the early part of October, peaking at New Year’s Eve, then slowly decreasing over the first half of the year.

We have two huge shopping days coming up in November. All US retailers are familiar with Black Friday, which, while it does not generate quite the massive sales it did in the past, still moves a huge chunk of merchandise. However, few US retailers participate in Singles Day, the largest shopping day of the year bar none. Primarily “celebrated” in China, Chinese shoppers will spend about 5 times as much on Singles Day (Nov. 11) as US shoppers spend on Black Friday. Eventually, some US retailers will figure out how to get a chunk of that.

Moving on to December, 62% of your customers will make their purchases between Dec. 1 and 24 with 25% making their purchases between Dec. 11 and 20. As Dec. 25^th gets closer, more customers turn to brick and mortar stores to make sure they get the items they want on time. Incidentally 65% will continue with holiday shopping during the period between Dec. 26^th and Jan 1 especially as they start using those gift cards they received for Christmas and 46% will still be in the mood for holiday shopping through much of January. So you’ve still got time to get your holiday ducks (turkeys?) in a row.

Christmas Hours

We will remain open regular hours 10 a.m. to 9 p.m. on Christmas Eve and 5 p.m. to 9 p.m. on Christmas Day, then resume regular hours on Boxing Day, the day after Christmas. We will offer free giftwrapping on items purchased here and will wrap presents purchased elsewhere for $5 per package

The Point of the Anchor

Anchor points come into play when a business sets a price on a product in a category either higher or lower than normal which then causes consumers to re-evaluate their perceptions of the price on other items in the category based on the high or low priced item.

For example, Wal-mart often uses the anchor point to create a perception of low prices on everything within a category by reducing the price abnormally low on just one item. By reducing the price on, say, a TV to $149.99, the company sets a low anchor point for the other TVs it sells. The anchor point Wal-mart sets on that particular TV is lower than the price a customer would find on that particular television wherever they shopped. Wal-mart then prices its other televisions similarly to what other retailers sell price them but, because of the low anchor point, the other televisions are also seen as lower prices.

Anchor points are often used with high priced products, making them seem cheaper. A few years ago, during the GAMA Trade Show, I had the opportunity to have dinner with a couple of other store owners at Gordon Ramsay’s Steak. Now, when I typically go out to eat, I will spend $10 to $20 on a meal. However, at Steak, the average entre runs about $100. When a Porterhouse steak sells for $117, it makes the roasted chicken breast at $36 seem like a steal. Very few people order the Porterhouse steak. It is there to make other items on the menu look much more reasonably priced and lower customer resistance to purchasing them.

This is why I like to have expensive Magic cards on display at the store. We very seldom sell them but having a card in the case selling for four figures makes that $25 Mox Amber look much more reasonably price.

Anyhow, back to the original incident. Recently we had a customer bring in some comic books for us to evaluate. He was curious as to how much they were worth. Among the books was a copy of Infinity Gauntlet #1, signed by George Perez, with a certificate of authentication. After a few minutes of research among various comic prices sites, eBay and Amazon, we told him it was the most valuable book in the lot, but that the price was all over the place, with sellers pricing it anywhere from $25 to $160. His response “Oh, that’s  all?” The customer figured that 1) all of the interest in Avengers:  Infinity War would have driven up the price of the book and 2) he had heard such high prices paid for first issues of books that he had set an anchor point for the value of his book at a much higher point than the price people were currently willing to pay for it. In this case, a little knowledge was indeed a dangerous, or at least disappointing, thing.

Christmas Party

Christmas party is Dec. 22 from 1 p.m. to 5 p.m. with the annual drawing at 4:30 p.m
Join us for our annual celebration of the holiday season. Snacks, boardgames and miniature play. Humane Society of Southern Illinois from 1 p.m. to 3 p.m.
Southern Illinois Roller Girls from 3 to 5 p.m.
Raffle at 4:30. How do you get tickets?
1 for coming in
1 with your Preferred Customer Card
1 for each stamp earned on a Castle Card that day
1 for each 10 pounds of newspaper
1 for each 10 cans of usable food

A look at the Collection of Sales Taxes

Interesting column in Internet Retailer looking at the reaction of online retailers to the potential overturning of the SCOTUS 1992 ruling in Quill Corp. vs. North Dakota.  For those who are not familiar with the ruling, Quill Corp. vs. North Dakota was the Supreme Court ruling that said businesses without a physical presence in a state did not have to collect sales tax from customers who lived in that state, effectively preventing states from collecting sales tax on mail order and online purchases. The ruling was based on the Dormant Commerce Clause of the Constitution, which prevents states from interfering with interstate commerce unless specifically authorized by the United States Congress. Since Congress had not passed any laws dealing with the situation at the time, the court determined that Quill did not have a “substantial nexus” or connection to North Dakota and was thus exempted from collecting  and remitting sales or use tax to the state. However, the Court did explicitly state in its ruling that nothing prevented Congress from passing legislation to deal with the situation. Since, internet commerce was in its infancy at the time, with sales amounting to less than 1% of all retail sales, and the Congress has never met a situation it did not want to kick down the road until it became absolutely imperative to deal with it, Congress passed on developing any legislation to authorize states to collect sales tax from internet companies without some physical location in the state.

However in 2015, in his concurrence to the Court’s ruling on Direct Marketing Association vs. Brohl,  Justice Anthony Kennedy wrote about Quill’s “Tenuous nature” and the “serious continuing injustice faced by Colorado and many other States”, offering the states an opportunity to forcing “Kill Quill” suits by passing legislation compelling out of state vendors to collect and remit sales tax, forcing the vendors to bring lawsuits attempting to overturn the legislation. The states then expect these lawsuits to provide a legal vehicle to move the dispute back to the Supreme Court, revisiting and, the states hope, overturning the ruling. So far, the states’ plan has worked with argument of South Dakota v. Wayfair Inc. before the Court scheduled for this April .

Some of the comments from online only retailers in the column noted at the top really struck me, especially this one, in the light of the increased use of MAP in the gaming industry, by Deb Beresford, ecommerce manager at web-only sunglasses retailer X-wear.com:   “In the last two years, many of the sunglasses brands that we sell have changed their policies to require their retailers to maintain minimum advertised pricing. Because we can no longer discount most of these sunglasses, we lost huge revenue on the marketplaces where we list our products. The only reason I believe we capture any out of state customers is because they don’t have to pay sales tax. It’s very hard to find an edge in this market now without the courts taking away the one thing that gives any of us a fighting chance” and this one from Atinc  Sonmezer,  CEO of dancewear retailer MissbellyDance.com:  “ It will be very costly. I’m not sure how small businesses selling on Amazon nationwide will be able to handle it.”

Even Congress will probably move on this. I spoke with my House Representative this week and he said online sales tax reform was the number one topic mayors in the cities in his district wanted to discuss. We will see what happens but I expect to see some legislation dealing with the situation in the next year or three.

Inked Dice

A discussion of inked dice came up in a recent game. Long time player will remember that the first polyhedral dice came uninked (and were pretty ugly to boot). Almost all dice made today are inked, which means they are tossed into a inker with the powdered inking material and tumbled, so that the powder fills the indented numbers. Unfortunately, this process slightly rounds the edges making the dice less true than what are called razor edged dice, such as casino dice or Game Science dice.  Over the years, players have developed a preference for already inked dice, rather than doing it themselves with a marker or crayon and have proved willing to accept the tradeoff.

2 Reasons to Shop Local

1  Stronger Communities—Research shows that the more local businesses a community has, residents have stronger civic ties and are more likely to participate in civic affairs. Economic concentration among businesses leads to a monolithic   local power structure and civic apathy. A larger number of locally owned  businesses is positively correlated with participation in local elections and civic activism, helping to counter the decline in civic engagement in the US over the past several decades.

2. More Jobs—Local businesses create more jobs for local people. Maybe it indicates inefficiency, but local retailers create twice as many jobs as Amazon does for the same amount of revenue. Spending money at the FLGS helps maintain jobs, both there and in the large community.

A Retail View of Kickstarted Projects

While from a publisher’s point of view, there is no real downside to Kickstarter, from a retailer’s point of view, there is almost no upside to the process, at least at the basic level at which crowdfunding works.

Conisder, the publisher lists a game on Kickstarter, or IndieGoGo, or some other crowdfunding site, gets pre-orders for it, collects funding, produces the game and ships it out.  Yes, there is more to it than that, but the publisher is selling their games to the customers who are most primed and ready to buy them.  At least one publisher that uses Kickstarter extensively has said they have moved their business model to a crowdfunding platform.  The company develops a game, puts it on Kickstarter, pre-sells 500-1000 copies, then, instead of keeping the game in print, develops another one and launches it via Kickstarter.

From the retailer’s point of view, stores see games coming up on Kickstarter and watch as they fund, with the opportunity to stock them occurring weeks or even months after those who participated in the Kickstarter receive their copies.  Assuming the typical print RPG sells  300-500 copies of a print run while small press boardgames sell 500-1000 copies, almost all of that demand gets satisfied by the Kickstarter campaign, leaving little demand left for distributors and retailers to satisfy.  Unless the game attracts a lot of post production buzz, such as Brotherwise Games Boss Monster, a Kickstarter funded game has already seen most of its sales during the campaign, leaving only a few potential sales through the distribution channel and lots of unsold Kickstarted games sitting on the shelf.

A number of Kickstarter campaigns do offer retailer tiers, wherein the retailer commits to purchasing several copies of the game, delivered at the same time as other supporters, at a discount comparable to what the store would get if purchasing the game through distribution.  This does require the retailer to tie up precious capital for several months, waiting for the product to release. Other Kickstarter campaigns, if the retailer commits to purchasing a certain number of copies of the game, have arranged to take payment and ship the game at the same time as it ships to the regular backers, putting it on the shelves while buzz still exists about it.

The big benefit that Kickstarter provides to retailers is the potential to develop an unending flow of new games and related products, some of which will prove comparatively successful in the distribution channel, such as 13^th Age, and some which will not, such as Kill the Overlord.  The case then becomes how much scarce time the store can allocate to determining which is which.

What is Marketing?

Wintersession started today wwith a new slew of students coming into Principles of Marketing I figure now is a good time for a refresher look at the history of marketing, which is, if you make, distribute or sell a game, an activity in which you engage. Marketing itself, when you look at it as the process by which a good or service moves from the producer to the consumer, dates back to ancient times with much exploration due to seeking new trade routes or access to products. Columbus’ voyages, for example, were undertaken to find a shorter, and therefore less costly route, from Europe to southeast Asia. Printed and clay seals used  to consistently identify the producer of such products as wine and olive oil were used in Mesopotamia  as early as the 4^th century BCE while archaeologists have found marks in Pompeii indicating  Umbricius Scauras branded his own fish sauce as early as 35 CE However the term “marketing”  first applied to buying and selling products during the 16^th century CE while the use of the term in its modern sense first appeared in Harper’s Magazine in 1884.

Marketing can be divided into three general areas or eras:  production, selling and consumer and, much like the development of study of marketing, all took place within the past century

During the production era which ran from time immemorial until about the 1930s, the focus was on production. Consumers did not have much choice, nor for that matter did producers. If you wanted to make a product, you were pretty much limited to what you had on hand. Similarly, if a customer wanted to buy something, they were generally limited to a very small or no selection.  The production era can be summed up in Henry Ford’s famous phrase “You can have any color you want, as long as it’s black,” which Ford famously said in 1909. The customer had very little choice or say in what they wanted and had to take what was available

Did You Know People Still Play Boardgames?

I was listening to NPR’s Here and Now program and caught this story on the resurgence of analog games, as the reporter refers to them. Every so often, a  reporter in the media  in need of a human interest story will catch onto the fact that millions of people still play boardgames regularly and will write a story announcing that there are games beyond Monopoly and Clue and that people actually still “gasp” play boardgames as if it was something that millions of people don’t already know. As the Here and Now program points out, boardgames are the largest funded category on Kickstarter, dwarfing their digital brethren in terms of amounts pledged. According to ICV2,  boardgame sales have increased year to year for the past 8 years, sold over $1.2 billion (eclipsing the number of comic sold) in 2015 and fueled a 50% year to year increase in Dungeons & Dragons sales at WOTC/Hasbro. Boardgames are big and yet it still seems as if daily, game store owners report customers walking into their store, looking at all the stock and asking “So where are your games?” Why? Here are a couple of reasons:

1.       Size of digital gaming market—Remember that I just mentioned that boardgame sales topped $1.2 billion in 2015. That’s a pretty impressive figure, except when you compare it to the digital gaming market which is projected to top $100 billion in sales this year. Compare $1.2 billion to $100+ billion and you can see that boardgame sales are a drop in the bucket compared to the sales of their digital brethren. When you have numbers like that, it is  no wonder the average customer thinks of digital games first when they go into a “game store”.

2.       Confirmatory bias—This is the human tendency to judge everything in terms of its relationship to ourselves and to seek and be more comfortable with information that confirms our beliefs. Since I run a game store, I deal with what the reporter in the Here and Now story referred to as “analog games” on a regular basis. Most of my regular customers play analog or table top games and we primarily sell tabletop games. Due to our extensive familiarity with them, we naturally thing of table top games when we think of games, forgetting that the average consumer has more likely played a digital game last and are far more familiar with those games than they are the ones that we sell.

3.       The Wal-Mart Effect.  Customers are far more likely to have shopped in a Wal-mart, Target or Walgreen’s than they are to have shopped in one of our tabletop game stores and are therefore much more likely to have seen the games for sale there and to view Monopoly, Sorry and Clue as the standard of a boardgame. Confirmatory bias works both ways. When a customer spends all of their shopping time in a mass market store, they are going to get exposed to mass market games and not have any reason to consider the huge variety of other games out there, either at your FLGS or available through Kickstarter.

Maybe, instead of shaking my head at the next of these stories about discovering that people play boardgames, I need  to figure out better ways of getting the word out to the huge numbers of people that do not play “our” boardgames.

Steve Jackson Games Hot Lead and Space Knights Rules

Back in 1993, Steve Jackson Games announced a set of miniatures rules titled Hot Lead, designed to encompass many different genres, much as its GURPS RPG system did. Ral Partha secured a license to produce miniatures to work with the rules and released a Space Knight series, reminiscent of the Aliens movies and Games Workshop's Warhammer 40K figures. Unfortunately, SJG never releases the Hot Lead or Space Knight rules, leaving the Ral Partha figure line miniatures without a setting or rules.

Reshoring and Flooring

Reshoring is simply the concept of moving production that a company offshored due to cheaper production costs, back home. The trade off between offshoring and producing products overseas and in the publisher’s home country is that of lower production costs versus the loss of sales due to the extended supply chain. Overseas production runs save costs in terms of lower materials costs, lower labor costs and greater flexibility but add costs in terms of additional shipping costs, wait time and managerial and oversight costs. A survey of manufacturers in 2015 found that 17% had already reshored production to the US while another 37% had plans in the works to do so. A number of US game publishers, including Kobold Press, Troll Lord Games, Looney Labs and Catan Studios, have never off shored production, finding that the speed with which they can print and restock product outweighs the cost savings of offshoring.

Flooring is the concept of a publisher or manufacturer which uses a distributor storing additional product on site at the distributor but retaining ownership of the product. When the distributor gets low on product, it simply moves product from the publisher’s stock to the distributor’s , taking ownership and paying the publisher. This allows the publisher to make more product than it could easily warehouse and drastically reduces out of stocks. Steve Jackson Games had a successful flooring arrangement with Alliance for several years and, when Chessex Manufacturing was located in the same building with Alliance Fort Wayne, a out of stock on dice could be rectified with a walk next door.

Adopting either of these practices, or some others, would certainly help in reducing out of stocks, especially during the crucial 4^th quarter.

Tariffs Postponed

It appears we walked it up to the brink and then pulled back. Why does the pullback of the tariffs matter to you? Because this latest round of tariffs included a 15% increase in boardgames and board and card game supplies imported from China, starting next week. Now that has been pushed back.

How To Make a Profit

“Buy Low, Sell High.”

There you go, that, in the proverbial nutshell, is how you make a profit in the game business, actually in any business.  Or, paraphrasing something a friend of mine, Marcus King (late of Titan Games and Entertainment, more recently with Troll and Toad) repeats from a mentor of his years ago: “You make your profit when you buy and your cash when you sell.”  The lower for which you can produce or buy a product, the more money you make when you eventually sell it.  Simple, right?

Not completely.  The above is indeed the basic of pricing but there are a number of different strategies and tactics a  business can take with its pricing, depending on what sort of image it wishes to project.

First, and most basic, is cost pricing.  You take the cost of the product you purchase or make (hopefully low, see above), increase it by an amount sufficient to generate enough money to cover the business overhead and provide a profit that you consider sufficient and sell it for that price.  Fairly straightforward, though not necessary simple, as this method does require you to know your overhead costs and how to break them down in order to assign them to items for sale.  This also highlights a recurring problem game stores have with a price for their products set by the manufacturer (manufacturer’s suggested retail price or MSRP).  Since customers are notoriously reluctant (with good reason) to pay more than the marked MSRP for items, having a price pre-set by the manufacturer constrains the amount of gross profit the store can earn from the item,  ergo the only way for a retailer to increase profits is to cut costs.  This is why game stores really dislike short discounted items from manufacturers, as a shorter discount on a product that much less money available to cover the costs associated with running the store.

Demand based pricing and competitive pricing are the two other major strategies a game store can choose to adopt when setting prices.  Demand based pricing derives from economic laws of supply and demand:  As supply decreases, price increases.  As demand increases, price increases.  A perfect example of this is collectable card games such as Magic and Yu Gi Oh.  Within any new release of either, there are always 1 or 2 cards highly desired by players.  The price for these cards quickly rises, due to demand, with the prices for the foil versions of the same cards priced even higher, this however, due to scarcity/lack of supply.  If players find these cards not as playable as hoped for or they cycle out of the preferred tournament environment, supply remains the same but demand drops, causing a reduction in the price a retailer will find customers willing to pay for cards, Magic’s Jace the Mind Sculptor card a perfect example.

When a store opts for competitive pricing, it is a good thing from the consumer’s point of view, not so much from the retailer’s as this means you reduce price in order to either grow market share or meet prices offered by competition on the same products.  Typically a retailer will cut prices in order to attract customers drawn to a lower price.  Magic packs are a classic example in game stores.  Hoping to attract more customers, mainly the price conscious kinds, a retailer cuts the price on Magic boosters to $3.50, 12.5%.  Other stores in the area have three choices:  ignore the price cut and either sacrifice those price conscious customers or determine some other way to retain them, meet the price cut and sacrifice some profits to keep customers, or exceed the price cut to keep those customers and attempt to draw in price conscious customers from the competing store.  If you choose option three, expect the other store(s) to cut their prices to meet or beat yours and, next thing you know, you have a full-fledged price war on your hands.  Great for the consumer, really bad for the store as that money you are giving up from profits is money that would otherwise go into running your store.  Price wars are usually won by the store with the deepest pockets as lesser capitalized give up, though really, no store ever wins a price war (though it is rather good for manufacturers as long as it lasts and as long as no store goes out of business).

So, returning back to the beginning, stores make profits by buying a product as cheaply as possible, selling it for what the market will bear and competing as much as possible on things other than price.  Do that and you have a really good chance of staying in business.

How To Waste Money On Advertising

This is the time of year when game stores (and most other businesses) set their budgets for the upcoming year. Another retailing magazine I get even sent out a survey a last week asking how I set up my budget for the year. Of course, the really forward thinking among us got it done last month. The biggest chunk of the variable part of the budget goes to payroll. After that generally come advertising and other forms of promotion, which should run 8% to 10% of your budget but more often gets nicked down to 2% to 3%. Anyhow, if you do the any of the following, you might as well take that fistful of dollars you just spent on promotion, walk to the back of your store and flush them down your toilet. They will do about as much good there:

One and Done:  Running an ad one time is like trying to win at Warmachine with one roll of the dice. You need to run the ad multiple times for it to work  (Yes, Apple famously ran its ad for the Macintosh computer only one time and successfully launched it http://youtu.be/axSnW-ygU5g, but unless you’ve got Ridley Scot directing your commercial and can afford to run it during the Superbowl, not a good idea).

Hitting Them Where They Ain’t:  Good advice in baseball, lousy in advertising. Advertising where your customers aren’t means no-one sees your ad. If you want to promote your game about wine cultivation doesn’t reach the people who are interested.

No Point:  Too many ads get run with no call to action. What do you want the customer to do? They don’t know unless you tell them. Even Coke has an implied call to action in their ads:  “This beverage looks delicious. You should drink it.”

Too Many Points: I’ve got this space, or time on the radio or tv. Seems a waste not to get as much information into it as I possibly can. I’m going to put all sorts of information about my game or my store in here. Too many points means that none of them make an impression on the customer’s mind. Pick 1-3 points you want to emphasize and hit them hard.

I’m Bored:  I’ve run this same ad over and over again. If I see it again I will scream. Time to change it out and try something different. You may be bored with the ad, your customers are far more tolerant. Change just for the sake of change is bad. You change your ad when your customers tell you it is time to change it. How do you know when it is time to change it? When they stop responding to it.

And one more for good measure:

I Know What Makes a Good Ad:  I run a good game store or know what goes into good game design. Ipso facto, I know what goes into good ad design. No, you don’t. Talk with your ad rep. Realize that sure, they are trying to sell you advertising but also realize they do this for a living. They want you happy so you will buy more advertising and should know more about ad design than you do. After all, it’s what they do for a living.

2019's Stocking Stuffer

Every year, we select a game that we think would make a great stocking stuffer.  Past selections have included, You Gotta Be Kitten Me, Timeline and Love Letter. It has to meet three criteria:  small (so it fits in a stocking), inexpensive and, most of all FUN.  This year's choice is Pandasaurus Games The Mind. At $12.99, it is an inexpensive game and the intensity of  focus player bring to deciding which cards to discard is just plain fun.

4 Great Stocking Stuffers

Not only is this the time of year for big holiday game purchases, like Star Wars Armada from Fantasy Flight, Fortune and Glory from Flying Frog or Horus Heresy:  Betrayal at Calith from Games Workshop, any of which will set you back $100 or more, but the season also calls for smaller presents as well, for stocking stuffers, secret Santas or gift exchange. For these, you want a game that provides a lot of fun without melting down your pocketbook. Here are some suggestions:

1.       Love Letter from AEG. This is Castle Perilous Games & Books Selected Stocking Stuffer of the Season for several reasons.  First, Love Letter is a lot of fun, plays quickly and offers quite a bit of replay value, especially with the number of variants that AEG has released.  In addition, it boasts a great price point at $9.99 for the basic game and only $10.99 for the Batman, Hobbit and Adventure Time variants. There’s even a Letters to Santa version if you want to get really thematic. Add in that the game is attractively packaged in both boxed and clamshell versions and you have a great stocking stuffer.

2.       Timeline from Asmodee. Gnome Games picked this one as its Stocking Stuffer of 2015 for the same reasons Castle Perilous Games & Books chose Love Letter (In fact, Gnome Games selected Love Letter as its Stocking Stuffer for 2013).  Timeline comes packaged in an attractive tin that fits neatly into a stocking, has an equally attractive $14.99 price point and offers plenty of replayability. Add in the fact that it actually teaches a bit of history and you have an all-around great choice.

3.       Fluxx from Looney Labs.  At $16 to $20, Fluxx is a bit more expensive than the first two options but still comparatively cheap and comes in a wide variety of variations. You can buy Nature Fluxx, Stoner Fluxx, Star Fluxx, Cthulhu Fluxx, Pirate Fluxx, Batman Fluxx or even, should your tastes run that way, just plain Fluxx. The number of Fluxx games make it relatively easy to find a version that would appeal to anyone on your Secret Santa or gift exchange list. In addition, since the rules change with every game, even with every hand, Fluxx, whatever version you buy, offers immense replayability.

4.       Happy Birthday from North Star Games.  Though Happy Birthday doesn’t have the name recognition of North Star Games’ other games such as Evolution and Wits and Wagers,  or even the other games on this list, it is an enjoyable game in its own right, which is one of the reasons it makes the list. Also, surprisingly given the size of North Star Games’ other products, Happy Birthday comes in a compact 3’ x3’ box with a nice heft to it, perfect for tucking into a stocking. Add in the extremely reasonable $12.99 price point and that fact that Happy Birthday is a game that younger children especially like to play, the age range is 6 and up and the game can handle up to 8 players, making it good for family get togethers and you have one more great stocking stuffer.

Pokemon Counterfeiter

Pokemon is a widely counterfeited product line as there is not much protection for intellectual properties such as Pokemon and Yu Gi Oh, or other products, found in China where most of these knock offs are manufactured. Fortunately for Yu Gi Oh and Magic, aside from the cards, there is little demand for ancillary products so neither offers much incentive for counterfeiters. Due to the widespread popularity of Pokemon, however, there is a lot of potential profit in making knockoff Pokemon products and, once they get into the US, the source is very hard to track down. Also unfortunately, one of the prime sources of knock off Pokemon products, Amazon, shows very little interest in policing its sellers. Unless Amazon gets a direct complaint from a manufacturer regarding a counterfeit product, the company will not take action.

Lights Fantastic Parade

Carbondale's annual Lights Fantastic parade takes place tomorrow, starting about 6 p.m. Downtown streets will close at 5 p.m. and reopen when the parade ends about 8 p.m.  The store will have cookies and hot cider during the day and evening.

WDBX Talk of the Town

Scott will be talking boardgames and graphic novels as Christmas gifts this Monday at 10 a.m. on WDBX. What boardgames and/or graphic novels would you like to get this holiday? If you miss the live show, WDBX archives them on its website for 30 days.

The Power of Packaging

I had the opportunity to try a game designer’s newish card games earlier this year. The games played smoothly and in general, I liked the card art. However, I opted not to bring them in for one simple reason:  the only packaging was a strip of plastic shrinkwrapped around them holding the cards in place. No box, no clamshell, nothing, so I passed on it.  If you want to sell any product (with the possible exception of live animals), you need packaging.

Packaging serves two basic purposes: functional and promotional.  The functional purposes of packaging are to allow the customer to transport it, protect its contents and give needed information about them.

Consider consumer products. Could you transport liquid laundry detergent or toothpaste home from the store if it did not come in a bottle or tube? This is the first function of the package, to hold the contents together conveniently. While carrying home an RPG like 13^th Age or FATE is relatively easy (though try getting one home without that handy binding), imagine taking home a board game like Settlers of Catan or Zombies! without the box. Pieces and cards all over the place!

The second thing the package does is protect the contents. Even something as simple as a deck of Once Upon a Time cards needs a package. If you just put them out on the shelf, they will get dirty, shelfworn, even torn. The box, or clamshell, or case, protects them from normal damage.

The third functional thing the package does is provide information about the contents. In the case of toothpaste, the customer wants to know how many ounces, is this tartar control or whitening formula, does it contain fluoride? Consumer protection laws for consumable items require a list of ingredients as well. You find that information on the package. Though ingredients are not necessary, in the case of a game, the customer wants some basic information: how many people can play, what ages are suitable, how long should a typical game take, what is inside the package?  This last is important because the customer typically cannot open the box to see the contents and stores may not want to open it if they do not have a shrinkwrap machine (If a store does not have a shrinkwrapping machine and the customer decides not to buy, the opened game is now worth less in the eyes of the next customer).

In terms of promotion, packaging can do two main things: make your product stand out on the shelf and sell it to the customer. Steve Jackson Games is a prime example of using packaging to make its products stand out, purely though box size. As I mentioned in previous columns, I used to think SJG was wrong for packaging Munckin in such a large box. Time proved me wrong and over the years, SJG has moved away from the small tuck boxes in which it packaged Chez Geek and Illuminati. Today, those games, and others, come in boxes the size of the Munchkin box, the easier to stand out on the shelf.

The packaging also should sell the product to the consumer. Tell them why they should buy it, why they are going to have fun playing it, how play works. While the FLGS probably has someone who can tell the customer about the product, if a game makes it to the shelf of a Target or B&N, no staffer there will work to sell it.  The poor game package is on its own. Bland doesn’t attract attention, bright and attention getting does.

Kickstarter Growth

Games funded by Kickstarter campaigns accounted for about 20% of overall sales on the platform, growing for the 4^th year in a row. Currently, there are over 20,000 tabletop game projects seeking funding on the platform with an untold additional number seeking funding on Indiegogo and other platforms. Given than roughly half of the games seeking funding on crowdfunding platforms fail, that is still a lot of games heading to the market. While the funded ones obviously have demand from their backers, it is a crap shoot for publishers as to whether they should produce enough of a crowdfunded game to have copies to put into distribution.

How to Make a Profit

“Buy Low, Sell High.”

There you go, that, in the proverbial nutshell, is how you make a profit in the game business, actually in any business.  Or, paraphrasing something a friend of mine, Marcus King (late of Titan Games and Entertainment, more recently with Troll and Toad) repeats from a mentor of his years ago: “You make your profit when you buy and your cash when you sell.”  The lower for which you can produce or buy a product, the more money you make when you eventually sell it.  Simple, right?

Not completely.  The above is indeed the basic of pricing but there are a number of different strategies and tactics a  business can take with its pricing, depending on what sort of image it wishes to project.

First, and most basic, is cost pricing.  You take the cost of the product you purchase or make (hopefully low, see above), increase it by an amount sufficient to generate enough money to cover the business overhead and provide a profit that you consider sufficient and sell it for that price.  Fairly straightforward, though not necessary simple, as this method does require you to know your overhead costs and how to break them down in order to assign them to items for sale.  This also highlights a recurring problem game stores have with a price for their products set by the manufacturer (manufacturer’s suggested retail price or MSRP).  Since customers are notoriously reluctant (with good reason) to pay more than the marked MSRP for items, having a price pre-set by the manufacturer constrains the amount of gross profit the store can earn from the item,  ergo the only way for a retailer to increase profits is to cut costs.  This is why game stores really dislike short discounted items from manufacturers, as a shorter discount on a product that much less money available to cover the costs associated with running the store.

Demand based pricing and competitive pricing are the two other major strategies a game store can choose to adopt when setting prices.  Demand based pricing derives from economic laws of supply and demand:  As supply decreases, price increases.  As demand increases, price increases.  A perfect example of this is collectable card games such as Magic and Yu Gi Oh.  Within any new release of either, there are always 1 or 2 cards highly desired by players.  The price for these cards quickly rises, due to demand, with the prices for the foil versions of the same cards priced even higher, this however, due to scarcity/lack of supply.  If players find these cards not as playable as hoped for or they cycle out of the preferred tournament environment, supply remains the same but demand drops, causing a reduction in the price a retailer will find customers willing to pay for cards, Magic’s Jace the Mind Sculptor card a perfect example.

When a store opts for competitive pricing, it is a good thing from the consumer’s point of view, not so much from the retailer’s as this means you reduce price in order to either grow market share or meet prices offered by competition on the same products.  Typically a retailer will cut prices in order to attract customers drawn to a lower price.  Magic packs are a classic example in game stores.  Hoping to attract more customers, mainly the price conscious kinds, a retailer cuts the price on Magic boosters to $3.50, 12.5%.  Other stores in the area have three choices:  ignore the price cut and either sacrifice those price conscious customers or determine some other way to retain them, meet the price cut and sacrifice some profits to keep customers, or exceed the price cut to keep those customers and attempt to draw in price conscious customers from the competing store.  If you choose option three, expect the other store(s) to cut their prices to meet or beat yours and, next thing you know, you have a full-fledged price war on your hands.  Great for the consumer, really bad for the store as that money you are giving up from profits is money that would otherwise go into running your store.  Price wars are usually won by the store with the deepest pockets as lesser capitalized give up, though really, no store ever wins a price war (though it is rather good for manufacturers as long as it lasts and as long as no store goes out of business).

So, returning back to the beginning, stores make profits by buying a product as cheaply as possible, selling it for what the market will bear and competing as much as possible on things other than price.  Do that and you have a really good chance of staying in business.

New GW Releases 12/7

Warhammer 40,000: Chapter Approved 2019 (40-07)   Updated points, new rules and new missions for Warhammer 40,000 Supports and updates rules for Matched Play games including 12 new and updated Matched Play scenarios New and updated datasheets for Chaos Daemons and Fortifications Expanded and updated rules for 12 different types of Battlefield Terrain Includes a 56 page book updating points values for all the factions, models, upgrades and wargear in Warhammer 40,000   (40-07) US $35/ CAN $40 For sale in your shop on Saturday 12-07-19 ***You can find these images on our GW Retailers' Site:  https://trade.games-workshop.com/resources/***

Kill Team Annual 2019 (102-73)   Compiles together previous White Dwarf content along with brand-new material for Kill Team Includes expansion content for Open, Narrative and Matched Play games Updated points values for all factions, units, weapons and wargear Datasheets for including Kroot Mercenaries, Daemons and Adepta Sororitas in your Kill Team games Brand-new rules for Kill Team, including creating you own Specialisms (102-73) US $35/ CAN $40 For sale in your shop on Saturday 12-07-19 ***You can find these images on our GW Retailers' Site:  https://trade.games-workshop.com/resources/***

Psychic Awakening: Blood of Baal (40-31)   Includes new rules and background for Tyranid Hive Fleets and Blood Angels Space Marines Revised Datasheets for key Blood Angels characters, including Mephiston, Astorath, Lemartes and more Rules for Primaris Death Company and the Flesh Tearers successor Chapter New rules for Codex: Tyranids, including 16 Strategems and new rules for use with Hive Fleets (40-31) US $40/ CAN $50 For sale in your shop on Saturday 12-07-19 ***You can find these images on our GW Retailers' Site:  https://trade.games-workshop.com/resources/***

Blood Angels Mephiston, Lord of Death (41-39)   Multipart plastic kit, can be built in one of two poses Includes a scenic element on the top of his base Datasheet is included in the construction guide (41-39) US 40/ CAN $50 For sale in your shop on Saturday 12-07-19 ***You can find these images on our GW Retailers' Site:  https://trade.games-workshop.com/resources/***

Blood Angels, Crimson Spear Strike Force (71-53)   23 figure multi-part plastic box set containing: 1 Chaplain with Jump Pack, 1 Captain in Terminator Armour, 10 Space Marine Primaris Intercessors, 5 Death Company Marines, 5 Sanguinary Guard, 1 Baal Predator, 2 Blood Angels Primaris Upgrade Frames Approx 30% added value (71-53) US $185/ CAN $220 For sale in your shop on Saturday 12-07-19 ***You can find these images on our GW Retailers' Site:  https://trade.games-workshop.com/resources/***

Space Wolves, Talons of Morkai (71-48)   17 figure multi-part plastic box set containing: 1 Iron Priest, 10 Space Marine Primaris Intercessors, 5 Wulfen, 1 Stormwolf, 2 Space Wolf Primaris Upgrade Frames Approx 35% added value (71-48) US $170/ CAN $200 For sale in your shop on Saturday 12-07-19 ***You can find these images on our GW Retailers' Site:  https://trade.games-workshop.com/resources/***

Chaos Space Marines, Vengeance Warband (71-88)   22 figure multi-part plastic box set containing: 1 Chaos Lord in Terminator Armour, 10 Chaos Space Marines, 5 Chaos Terminators, 5 Havocs, 1 Chaos Rhino Approx 31% added value (71-88) US $170/ CAN $120 For sale in your shop on Saturday 12-07-19 ***You can find these images on our GW Retailers' Site:  https://trade.games-workshop.com/resources/***

T’au Empire, Starclaimer Hunter Cadre (71-47)   28 figure multi-part plastic box set containing: 1 Tau Commander, 1 Devilfish, 3 XV8 Crisis Battlesuits, 10 T’au Fire Warriors, 3 XV25 Stealth Battlesuits, 1 DS8 tactical support turret and 9 Drones Approx 33% added value (71-47) US $170/ CAN $200 For sale in your shop on Saturday 12-07-19 ***You can find these images on our GW Retailers' Site:  https://trade.games-workshop.com/resources/***

Drukhari, Poisonblade Raiding Party (71-89)   27 figure multi-part plastic box set containing: 1 Archon, 20 Kabalite Warriors, 3 Reavers, 1 Venom, 1 Razorwing Jetfighter, 1 Talos Approx 32% added value (71-89) US $185/ CAN $220 For sale in your shop on Saturday 12-07-19 ***You can find these images on our GW Retailers' Site:  https://trade.games-workshop.com/resources/***

Tyranids, Bioswam (71-81)   46 figure multi-part plastic box set containing: 1 Hive Tyrant, 8 Genestealers, 12 Hormagaunts, 12 Termagants, 10 Gargoyles, 2 Carnifex and 1 Ripper Swarm Approx 35% added value (71-81) US $185/ CAN $220 For sale in your shop on Saturday 12-07-19 ***You can find these images on our GW Retailers' Site:  https://trade.games-workshop.com/resources/***

Skaven, Corrupting War-swarm (71-83)   45 figure multi-part plastic box set containing: 1 Grey Seer, 1 Screaming Bell and 1 Plague Priest, 1 Plagueclaw, 1 Verminlord Corruptor, 20 Plague Monks, 20 Clanrats Approx 34% added value (71-83) US $200/ CAN $240 For sale in your shop on Saturday 12-07-19 ***You can find these images on our GW Retailers' Site:  https://trade.games-workshop.com/resources/***

Stormcast Eternals, Exorcism Soulstrike (71-96)   22 figure multi-part plastic box set containing: 1 Lord-Exorcist, 10 Sequitors, 5 Evocators, 6 Evocators on Celestial Dracolines Approx 32% added value (71-96) US $185/ CAN $220 For sale in your shop on Saturday 12-07-19 ***You can find these images on our GW Retailers' Site:  https://trade.games-workshop.com/resources/***

Nighthaunt, Court of the Craven King (71-86)   46 figure multi-part plastic box set containing: 1 Kurdoss Valentian, 10 Chainrasps, 10 Grimghast Reapers, 10 Dreadscythe Harridans, 10 Bladegheist Revenants, 5 Hexwraiths Approx 30% added value (71-86) US $185/ CAN $220 For sale in your shop on Saturday 12-07-19 ***You can find these images on our GW Retailers' Site:  https://trade.games-workshop.com/resources/***

Gloomspite Gitz, Caveshroom Loonz (71-87)   21 figure multi-part plastic box set containing: 1 Loonboss, 10 Squig Hoppers, 6 Fanatics, 3 Rockgut Troggoths, 1 Mangler Squig Approx 30% added value (71-87) US $185/ CAN $220 For sale in your shop on Saturday 12-07-19