Alliance Open House

The major gaming distributors hold "open houses" each year for their retailer customers. I went to the Alliance one this past weekend and this week's Rolling for Initiative column looks at four things I took away from it.

Asmodee and Alliance

This week's ICV2 column looks at possible effects of the recently announced deal between Asmodee NA and Alliance. For the consumer, it shouldn't have any effect. For other members of the channel, the effects could be more pronounced.

Another Distributor Exclusive Ends

In case you missed the announcement earlier this week, Z-Man Games announced that, on March 15, it would end the exclusive distribution deal it has had in place for several years with Alliance Game Distribution, broadening its distribution channel to include not only Alliance but also Southern Hobby, ACD, GTS and Peachtree Distribution. Z-Man Games is probably best known for itsPandemic line of co-operative board games but the company also produces theCarcassonne, Agricola, Stone Age, Tragedy Looper as well as Camel Up and Dark Stories.

Z-man Games is part of the F2Z Entertainment publishing house, which also publishes the Plaid Hat, Pretzel and Filosofia lines of games and the success of Plaid Hat Games and Pretzel Games in using multiple distributors is what likely encouraged the company to end the exclusive arrangement with Alliance and move to a less exclusive arrangement with the other four distributors, which still leaves out smaller and regional distributors such as Aladdin’s and Mad Al.

By my calculations, this leaves about four publishers exclusive to one distributor or another. Alliance Game Distribution still maintains an exclusive relationship with WizKids Games, publisher of the HeroClix line of collectable superhero miniatures games; and Twilight Creations, best known as the publisher ofZombies! and its dozen or so expansions. ACD has an exclusive arrangement with Playroom, publisher of Geek Out and Killer Bunnies and the Quest for the Magic Carrot (if it ever gets back into print, copies are going for over $100 on eBay); andPersonally Incorrect, a card game similar to Cards Against Humanity, is distributed exclusively by Lion Rampant Imports.

In addition, Looney Labs reduced its number of distributors a couple of years ago to two, ACD and Alliance (see “Looney Labs Cuts Distributors”), and added a third, GTS, six months ago; while whoever publishes Kittens In A Blender had an exclusive arrangement with GTS, though I am not sure if that was a permanent arrangement or just for the first (and only) reprinting of the game.

So far, WizKids seems pretty happy with how Alliance has handled distribution of their lines and, especially with HeroClix's heavy reliance on distribution of Organized Play materials to drive participation in OP events and hence sales of HeroClix products, I see no reason to expect WizKids to end the exclusive relationship now and since, from what I understand, money is involved in the ACD/Playroom deal, it is doubtful that one will change any time soon.

However, I would not be particularly surprised to hear an announcement from Looney Labs that they will expand their distribution channels from ACD, Alliance, and GTS to encompass the other two distributors as well. It would give them greater access to retailers that do not have one of their current three distributors as one of their first choices and would make it much easier for stores to restock products like Fluxx and Just Desserts as they will not have to hold off putting in an order until time to place one with one of Looney Labs' current distributors.

The thing that concerns me most about the expansion of Z-Man to additional distributors is the company’s notorious out of stock problem. Though Pandemicand its expansions remained in stock through this holiday season, this has not been the case in past years and the need to bump up production to supply the needs of four additional distributors may prove problematic for the company. I am hoping we don’t see a return to the days of Z-Man’s popular games out of stock for weeks or months again.

Mayfair Loses Catan

The Catan line of games, which has been licensed and produced by Mayfair Games since time immoral here in the states, or at least since the early 1990s, will move to the newly formed Catan Studios, part of Asmodee NA. What does this mean?

For customers, probably very little, though you might see more discounting of Catan products in the future.  Mayfar Games has a pretty strong MAP program and enforced it pretty consistently, meaning you wouldn't find Catan discounted often below Mayfair's 20% allowed MAP.  The games published by the companies making up Asmodee NA, Days of Wonder, Asmodee and Fantasy Flight, were much less concerned about the discounting of their products to the ultimate consumer. There is no indication yet as to whether this situation will continue under the newly formed Asmodee NA. Customers may see much deeper discount prices on Catan or a tightening up on discounting across all of the lines.

For retailers, it means easier access to the Catan line. For a number of years, Alliance Distribution had an exclusive agreement with Mayfair Games, meaning if a store wanted to carry Catan, it had to have an account with Alliance Distribution.  Now, companies wanting to carry Catan will be able to purchase it from one of 5 distributors, meaning if one has run out of stock, a store can turn to another.

For the five distributors carrying the Asmodee NA lines, it is also good news as Catan is still a very strong game brand. It was out second best selling line in terms of number sold, only bested by Cards Against Humanity. Distributors having access to Catan, as well as the other Asmodee NA games, should see an increase in their bottom lines.

Changes Coming to Asmodee, Days of Wonder and Fantasy Flight Games

The big news that hit the game industry last week was the announcement by Asmodee that the company will become Asmodee North America and will offer Asmodee, Days of Wonder and Fantasy Flight Games products under the new structure. The reason for the change as given by new CEO Christian Peterson:

“The marketplace has long been distorted by providing one-size-fits-all sales terms to every retail account, regardless of its channel of sale. The growth in demand for games over the last decade, in our view, has been fueled not only by fantastic product, but by the support of specialty retailers who incubate personal connections between players, facilitate tournaments and leagues, provide instant product availability, and increasingly provide a ‘third place’ that is instrumental for so many gamers to enjoy and discover our products. The retailer cost of providing such channel services is significant, and so we’re now making policy changes to ensure that the sales terms provided to those retailers, relative to other channels, are positively reflective of the value they add to our distribution chain.”

If everything goes according to Asmodee NA’s expectations , all of the changes planned by the “new” company  should go into effect by April 1^st and there are some fairly major ones, most of which will affect the channels of distribution. However, one will have significant impact on the consumer

Changes affecting the channel—The three companies will remain independent in terms of product, however distribution will consolidate, starting January 1^st .  This means that Alliance will no longer have exclusive distribution rights to the Days of Wonder line of products, which include Ticket to Ride and Small World. At the same time, Asmodee NA will reduce its distribution partners to 5:  Alliance Distribution, ACD, PHD, GTS and Southern Hobby. This means that distributors such as Aladdin, E-figures and Mad Al’s, among others, will no longer stock the Asmodee NA product lines and retailers wanting to carry them will have to have an account with one of the five authorized distributors.

A second major change affecting the channel is, instead of raising the price on the combined company’s products, discounts on products across the line will drop to 45%, reducing the margin of gross profit anywhere from 3 to 5 %. Much as with WOTC’s reduction in margin earlier this year, this reduction comes straight out of the gross margin of distributors and retailers. It remains to be seen what Asmodee NA does with the extra percentage.

Changes affecting the consumer—One major change in Asmodee NA’s operations that will directly affect the consumer is a new requirement that any retailer wanting to sell Asmodee NA’s products must sign an independent retailer agreement before the retailer can purchase any Asmodee NA products. There are several items in this agreement but the main one that appears to affect consumers is that retailers, unless they have a separate agreement with Asmodee NA, can no longer sell any Asmodee NA products online. Only retailers that have an agreement with Asmodee NA to sell online will be able to do so and I would imagine this agreement will have some restrictions on MAP (minimum advertised pricing). This means, for example, a lot fewer online sources selling FFG’s Star Wars Imperial Assault for $65, 35% off the MSRP.

These are the major changes planned by Asmodee NA. What actually happens we will know after April 1^st. 

7 Questions for Publishers at the Alliance Open House

With the annual Alliance Open House coming up this weekend in beautiful Ft. Wayne, I came up with a list of questions I would like to ask a number of the attending publishers:

1.        WOTC--The focus on Magic and Dungeons & Dragons is great and I know that is where your bread is buttered, so to speak but what about your catalog of boardgame titles? TableTop gave a nice boost to sales of Betrayal at House on the Hill but are there any plans to promote other backlist titles such as RoboRally, Guillotine, Great Dalmuti, Risk 2144 or Diplomacy? All still sell slowly but I would sure like to see what they could do with the sort of promotional push Magic and D&D get.

2.       Fantasy Flight Games—Congratulations on getting the X-Wing Core Set included as part of Force Friday. I haven’t seen a copy of the game yet so could you tell me if there was anything included in it that sent purchasers to the LGS to buy additional ships for the game, those ships that Target doesn’t carry?

3.       And while we’re at it, Fantasy Flight Games, Days of Wonder, Z Man Games—You have track records of running out of your best selling titles during the holiday shopping season. Have you made any plans to build up inventory this year in order to avoid a repeat?

4.       WizKids—You have really started pushing Organized Play registration this year, so any plans to create OP software that we can download to the computer to make uploading results easier? It can be a bit of a pain to handle reporting when the internet is running slow. Also, you finally announce that stores with remaining boosters of War of Light could start selling them without violating our agreement with you. When will you post a date allowing us to sell off old Organized Play products from Star Trek Attack Wing and D&D Attack Wing? OP for both games has died off here and we have months old OP materials sitting in backstock that we would like to liquidate.

5.       Plaid Hat Games—Will Dead of Winter return to stock in time for the holiday selling season and will you have enough product to supply sales through the season? Do you have any plans for expansions and if so, when?

6.       Steve Jackson Games—Any more releases planned for Evil Stevie’s Toys? The ducks didn’t do that well but I can always sell more Cthulhu plushies. Do you have any research showing demand for the guest artist versions of Munchkin?  I can understand guest artists on new versions of Munchkin (Munchkin Kitchen, anyone?) but do you have anything indicating that Munchkin has a strong enough fan base that a player will want another copy of Space Munchkin that only differs due to the art?

7.       Green Ronin—Fantasy Age? Titansgrave? Will we get these while there is still a buzz from the first season of the web series? Any chance for us to get a limited edition signed by the Titansgrave group?

Looney Labs Expands Distribution

It won't mean anything to the purchaser but Looney Labs, maker of Fluxx, Just Desserts, Chrononauts and other fine card games, announced this week they are adding another distributor:  GTS Distribution. Up to now, if a store wanted to carry any of the Fluxx games, it had to buy direct from Looney Labs or buy from one of the two distributors that LL allowed to carry its games:  Alliance Distribution or ACD. This meant, in order to stock LL products, a store had to have an account with one of those two distributors. Now, at least, stores have three places to get LL games from.

Why does this matter? Mainly to stores because this gives them more options from which to get LL products. If Alliance or ACD is out of Regular Show Fluxx, the store can check if GTS has it in stock, meaning, hopefully, fewer out of stocks.

Small Business Saturday

Now we come into the holiday shopping season, the time of year when, depending on to whom you talk, retailers make 20 to 40 percent of their sales.  Black Friday, Cyber Monday (a self-fulfilled event, if you look at the statistics) and since 2010, Small Business Saturday, a creation of American Express.

Small Business Saturday  is promoted by AmEx  ostensibly to promote small businesses in the US, and, more practically, to encourage more small businesses to sign up to accept the American Express card.  I say ostensibly to promote small business because any small business can register to participate in Small Business Saturday and receive a welcome package, including door stickers, floormat and shopping bags.  However, in order to take advantage of the main thing driving customers into stores, a one-time $10 credit on their AmEx statement when they make a $10 or more purchase in a participating store, the store must accept the AmEx card.  Since many stores in the US, especially small retailers, do not accept American Express, due to higher merchant fees than Visa or Master Card, or even Discover, charge, I would willingly bet that AmEx looks at the list of retailers participating in Small Business Saturday, compares it to the list of those that accept AmEx and contacts non-accepting retailers to pitch the card.   Assuming that a store got a number of customers in attempting to use an AmEx card to get the discount, AmEx could point to that as a strong argument for taking the card.

While I really like the idea of Small Business Saturday , as I favor anything that has the potential to drive traffic into stores, I still have some caveats about the promotion, two to be precise:

1.        Placement.  Putting Small Business Saturday on the Thanksgiving weekend, directly after Black Friday, really dilutes its impact. Given that Black Friday is the busiest shopping day of the year and the Saturday after Black Friday is typically the third busiest shopping day of the year (the Saturday before Christmas is the 2^nd busiest shopping day of the year, just in case you were wondering), it appears quite difficult to measure the impact that SBS has. Given that so many people are out shopping anyway, how does a store determine what impact, if any, SBS promotion has on sales.  Put the event on a Saturday in January, February or March, when you don’t already have the holiday shopping season driving traffic into stores and see what effect it has then.

2.       Coattails.  This is the fourth year for Small Business Saturday and American Express is still the only major company promoting it and, in fact, has the term trademarked.  If SBS is to become an “organic” event, rather than a paid one, we need to see more companies taking advantage of or sponsoring it, rather than just AmEx.  A quick search on Google shows only AmEx and Constant Contact  running promotions tying into the event, while Wordstream  has paid search tied to Small Business Saturday.  In our industry, Alliance Distribution has come out with a FLGS Success Plan for Small Business Saturday, downloadable from the Alliance website, and offering stores the opportunity to win a $100 credit by submitting events and promotions tied to SBS for a drawing to take place in early December.   Alliance, however, as far as I know, is the only company in the gaming (or comic) industry to really push SBS.  While these promotions are  good, Small Business Saturday needs more companies tying into the event to make it an actual “day” such as Black Friday, which developed on its own. I fear this won’t happen so long as the day remains a trademark of AmEx.

Here’s hoping I am wrong on these points, both that SBS will prove a major selling tool for stores and that more companies will start promoting it from both the front and back end.  The store has registered for it again, so we shall see.

RIP Phyllis Opolko

If you worked in the gaming or comics industry, you knew Philis Opolko, senior marketing manager at Alliance Distribution.  I had the pleasure of knowing her for several years, mainly in conjunction with the annual Alliance Open House, for which she recruited me to speak several times.  More than anything else, I remember her for the annual charity auction at the Open House.  She always managed to convince companies to donate all sorts of cool items to the auction which raised thousands of dollars for the CBLDF, among other organizations.

Good by Phyllis, you will be missed.

More on the Pandemic Pre-release

The annoying thing about the early release of Pandemic 2^nd edition to Target is that, unlike broken street dates on Magic and Yu Gi Oh products, theoretically, Z-man Games had much more control over the release of the second edition game and therefore should have managed to keep the February 6^th release date.  WOTC and Konami both have a number of distributors to deal with regarding street dates and each distributor has hundreds of stores to deal with as well.  In the Pandemic case, Z-man had only one distributor with which to work and that distributor only had one account carrying the product.  I am not privy to the inner workings of that particular channel of distribution but I would imagine it not too difficult to make certain that Pandemic did not arrive in Target’s distribution center until just before the release date, or even after. 

I really doubt the amount of sales generated by the extra week of early release amounted to even a fraction of a rounding error on Target’s income statement.  Meanwhile, it cost stores in the game channel sales, generated negative publicity for the company,  and likely annoyed to no end Alliance Distribution, Z-man’s official distributor to the specialty game channel, and likely the recipient of hundreds of emails and calls from perturbed retailers, wondering why Target had the hotly anticipated reprint a week ahead of the scheduled release whilst they did not.