Sunday, April 26

A Year in the Boardgames Industry

It's been just over a year since I quit my job as started Reiver Games as a full-time job. There have been some ups and some downs as I'm sure you're aware but if I'm to continue the most important thing is the bottom line: I need to make some money or the dream will die!

I've done a GeekList on BoardGameGeek sumarising this first year. The bottom line is the last entry.

Several things went right this year, but also several things went wrong. I'm really proud of the distribution network I've achieved in this first year, from nothing. Essen was a fantastic show for me, a huge success. But when push comes to shove, the company has had a mediocre first full-time year. With the delays getting It's Alive! manufactured I spent the first five months with only a handful of hand-made copies of It's Alive! to sell, which disappeared pretty quickly. From mid-May to the beginning of September I had absolutely nothing to sell. That I made any money at all those months is due to doing some contracting work for my previous employer. When the games did finally turn up it took me some time to get the distributors on board (several didn't sign up until January - five months after It's Alive! arrive in my warehouse). As a result my sales were a bit disappointing - especially in the last few months of the year.

I had to pay out for the games at (or before) the point of manufacture, so my expenditure has been pretty high. I still hope that I'll make a profit on those runs, but to do so I need to sell a large proportion of them, and that takes time. More time than I had between It's Alive! arriving in September and the end of the tax year in April. As such Reiver Games has made it's first loss this year after two years with a very small profit. Sales were up hugely, selling to distributors and shops rather than individual customers, but the bottom line is that this year I didn't make any money, and I'm going to have to start making some money soon if I'm to carry this on.

With Sumeria arriving shortly I'll have another opportunity to boost sales, but with it comes another huge expenditure on manufacturing. This year I'll have stock all year round, and with more games in my portfolio I'll hopefully be a more attractive prospect for other distributors as I'll look a little more professional. The three distributors who contacted me during the BGG competition will hopefully start stocking my games. I hope the BGG competition will boost awareness enough to lead to a bunch more sales. The bottom line is that I need to be selling more games, more quickly, I'm still not sure how to achieve that.

12 comments:

dirk said...

Jack,

I really hope you succeed to make Reiver Games a profitable company. You put your heart and soul in it and so you deserve to be succesfull.

Rob Bartel said...

You've achieved a lot in just one year but yes, it appears the big hurdle has been the up front manufacturing costs on It's Alive and Carpe Astra. I get the sense that sales have been good in the months when you've actually had product to sell but that the biggest issue has been cash flow.

For Sumeria and beyond, you may want to consider financing the manufacturing with a business loan that you then pay back over a three- or five-year term. While that may seem like a frightening prospect, particularly for something that doesn't feel like a guarantee yet, it does give you the opportunity to structure your costs and bring them in line with your revenue.

Rather than paying all of your costs up front and then waiting for revenue to trickle in, it allows you to break those costs into more manageable monthly or quarterly chunks that hopefully can then be covered by your ongoing revenue.

Due to interest, it means that you're paying more overall than you would be if you paid cash up front but, with interest rates currently at historic lows (the Bank of Canada rate is currently at an unheard of 0.25%), that added cost is likely well worth the benefits of a more structured cash flow (and the accompanying peace of mind).

It sounds like you're in fairly good shape overall but that you're in the thick of the chicken and egg conundrum that kills off so many new ventures. Money's been spent and prosperity's on the horizon but in between those two lies a daunting desert.

Based on your current sales trends, when do you expect It's Alive and Carpe Astra to have paid off their initial investment and start being revenue-positive? Does Carpe Astra represent an improvement over It's Alive in that regard? If you exclude your big upcoming investment in Sumeria, would that give you and your wife confidence that you could draw an acceptable salary for the coming year? No need to answer those questions here, of course, but asking them may help you determine whether this is simply a cash flow issue or a more fundamental question of underlying profitability.

Wishing you all the best with a worthy but difficult endeavor,
Rob

Jack said...

Dirk,

Thanks! Here's hoping!

Rob,

I've actually got a business loan for Carpe Astra which I'm now paying off. As for when do I hope the games to become profitable that's a hard one to call, I don't really have enough data on sales (and what I have is pretty erratic) to determine when the breakeven point will be with any accuracy.

Cheers,

Jack

Cheers,

Jack

Michel said...

Hi Jack,

I just stumbled upon a comment on Boardgamegeek - which was absolutely valid! The German rules as published on your page have one major error (a change of the words left and right on page 5)!

The thing is: I have absolutely no idea how that could happen* - as ALL versions I wrote and did proof-read were correct.

I checked it immediately, because I could not believe it.

*A moment later I saw another change in the rules, the addition of "proof reader Harald Schindler". It all adds up, I guess.
Without knowing him, please kick him in my name :)
Kick him hard.

Gruß,
Michael

PS - your mail account rejects my usual emails. Can you do anything about it?

Michel said...

I take back what I said about Harald, the proof-reader. I really appreciate his input (the wrong text is not his fault - just a layout error in the final preparation stage, which will be corrected before printing).

Phew!

Jack said...

Thanks for letting me know Michael, it's been fixed :-)

Cheers,

Jack

Todd said...

With games like "Sumeria" on the horizon, I think things are really looking "up" for Reiver Games. It won't be easy but your blog reflects continued progress.

Jack said...

Thanks Todd,

I feel like I'm still making progress, but I need to keep the sales coming to keep the distributors interested. Hopefully the BGG competition will have helped.

Cheers,

Jack

Rob Bartel said...

10 suggestions for increasing sales:

1 - Enter your games in as many industry competitions as possible. In some cases this requires significant entry fees, in others just a copy of the game. While nothing will quite match the effect of winning the SdJ, awards and nominations do drive sales and, if nothing else, they give you another excuse to talk about your games.

2 - Send review copies out to prominent reviewers, both professional and amateur (Ender Wiggin's pictorial reviews on BGG are a godsend, for example - http://www.boardgamegeek.com/geeklist/37596/page/1). Use the new printing of Sumeria as an excuse to send out bundle packs of all your games to reviewers.

3 - Seek out local radio, TV, and newspaper coverage. Board game design makes for a great human interest story and is a great filler for a slow news day or for color commentary by a popular daily broadcast host. It's Alive would be an ideal talking point in the lead-up to Halloween. You'd be surprised how at how many sales that can drive, particularly if you can provide them with a clear and convenient place to purchase. Time this to coincide with your demo days at your local retailers, for instance, and consider pointing those who can't come to a reputable online retailer. Also consider offering up some copies as door prizes or for radio call-in contests, to drive more interest and engagement from those audiences. Be prepared to get up early for an interview with the morning show.

4 - Donate copies to your local libraries and offer to teach the staff how to play so they can better integrate your games into their programming. Again, this is a great excuse for a press release or a talking point with local media. Scott Tepper has paved the way for a lot of this sort of work in the USA and has done a lot to legitimize games and gaming within a public library context. Point to him and his research if you face resistance.

5 - Work with local schools either to integrate your games into their curriculum, support an extra-curricular game group, or provide an alternative means of fundraising. The Persian Gulf isn't a popular place for school trips these days but ask around and maybe you can find a fundraising program with a specific tie to Sumeria. Help them host a parent-teacher-community game night where people can familiarize themselves with the games, then have the students take purchase orders that day and for the month following. Once the orders are in, you provide the games to the school at wholesale prices and the school keeps the portion that would normally go to the distributor/retailer. Once again, a good excuse for media coverage.

6 - Put together some attractive and colorful handbills promoting your games and ask supportive retailers if you can leave them at their counter for customers to take or even if they'll add them to customer's bag with every purchase.

7 - Get in the habit of running Reiver Games tournaments at future gaming conventions and give out copies of the games (or coupons towards future purchases) as prizes.

8 - Find someone willing and able to develop digital (particularly iPhone) versions of your games. Don't pay them anything to do it but give them a significant cut of the digital revenue. Make sure the game includes a "Buy the Real Thing Now!" screen, however, that points people to a site where they can purchase a physical copy of the game.

9 - Create and promote a short-run promotional collector's item and make it available to distributors on a regionally exclusive basis according to whoever places the largest restocking order within a given window of time (or some other desirable metric). Your distributors are your customers as well - reward loyalty.

10 - Look into alternative retail channels. Would a movie store be interested in selling It's Alive, even as a short-term promotional item? Would a museum want to carry Sumeria in their gift shop? Would a Science store want to carry Carpe Astra? Think outside the traditional hobby retail channel and approach toy stores, book stores, educational products stores, and lifestyle brands with your games. Try to get your products placed with seasonal retailers, coffee shops, and mail order book clubs. You'll get a lot of confused looks and negative responses but even a single positive response opens up a whole new potential audience for your game.

Jack said...

Wow! Thanks Rob for all the ideas - a lot of effort must have gone into that comment (it's probably longer than the original post!), thanks for taking the time to support me.

Cheers,

Jack

Rob Bartel said...

No problem and I'm happy to help. I can't vouch for all of the ideas being GOOD ideas, of course, but take what you think might work for you. =o)

Philip said...

Excellent comments, Rob. Much appreciated!