Tuesday, June 9

Critical Mass

There's a point during the lifespan of any successful company when you go from initial struggles to comfortable success.

I'm not there yet, but there's some promising signs for the future. At the UK Games Expo I introduced myself to Zev Shlaslinger, the man behind Z-Man Games in the US. Z-Man have made it, they have critical mass. They have a large portfolio of games, including the English version of the extremely popular Agricola which is currently number one on BoardGameGeek. I introduced myself as Jackson Pope, of Reiver Games, expecting a polite 'who the hell is this nutter?' smile. Instead, Zev replies: "I know who you are - I read BoardGameGeek and your blog". Wow! That was unexpected (hi Zev!).

At the bank this morning, my business specialist was also very impressed with my progress in the six months she's known me. Apparently, at the moment most of the people she sees are really struggling, and while my company has yet to pay me a penny, things are going pretty well. I've sold a lot of games and I've got some money coming in every month.

At the moment the company is still in an early cycle. When I bring out a new game I expend a lot of money getting it produced and then it takes a long time to recoup. Doing print runs of a few thousand means my costs per game are pretty high, so I don't get quite as good margins as I should in an ideal world, and the games are slightly more expensive than the larger print run competition. When I've recouped enough money, instead of paying myself, that money is immediately re-invested in producing another game. While I'm at this stage if any of my games are a flop I'm stuffed, I won't get the money back to get another game done.

When will I have critical mass? It's hard to say. If I can get 6-12 games in my portfolio then the residual income from those should be enough to keep me going. A bad decision need not be fatal. Also, with more games I become a more attractive supplier for distributors. Being able to place a reasonably sized order to get shipping discounts is only achievable if they can guarantee to sell the games. Taking 500 copies of a single game (one pallet of Carpe Astra or Sumeria is 504 games) is a big risk, but taking 50 copies of 10 games is much less so.

So in essence all I need to do is keep picking games that turn out to be popular until I've got lots on my books.

Easier said than done...


Eric said...

Take a page from the wargames business and use preorders/pledge/P500/...
Even if it's non-commitment, getting feedback from your clients on which future game they would/wouldn't buy is good marketing intelligence, and cheap to get so go for it :)
Of course it'd be unwise to blindly commit to a math formula and 'trigger' the go/no go of new products based only on this info, but still it can help make educated decisions, and lessen your business risk.

Jack said...

Hiya Eric,

I've considered the P500 model in the past. At the moment I don't have enough submissions that I'm ready to sign up. I think you need several that you're happy to go with before P500 really works. But it's definitely something work considering for the future.



Rory O'Connor said...

Hi Jack,
were you at the UK Toy Fair last January? I was there with our game Rory's Story Cubes (http://www.storycubes.com). I found your blog while googling 'distributor terms'. I need to create a set for distributor in US. Do you know where I can find a template or reference. I've some idea of what goes it - but not much!

It's been a buzz meet other designers, and I wish you all the best.

Jack said...

Hiya Rory,

I wasn't at the Toy Fair - I tend to go to the specialist games shows instead as my games aren't mass market.

Generally speaking distributors will want to either get the games on consignment (they tell you when they sell some and you invoice for those sold - also called 'flooring') or bought outright. They will be looking to buy at around 40% of retail (including shipping) and will probably want NET30 terms (they have 30 days to pay from the date of invoice). As with all these things they are negotiable - once you strike up a conversation you can modify your terms to suit them, or vice versa.

Good luck!



nycgameguy said...

I have found, especially lately, that no one wants to take a risk on a preorder with money down, but they're happy to estimate a quantity they'll order once the game is released. If you can get it in writing, it helps to build a case for a bank or investor so you can publish games to smaller niches (nothing is a complete dud!). :)

Jack said...

Hiya NYC Game Guy,

Usually my distributors are pretty quick to order, so I don't have such a problem with this, I'm just trying to line up more distributors :)