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 1st 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 1st
. 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 1st.
