Thursday, February 25

New Website Feedback

My friend Dunk is trying to get into web design, and as a portfolio project he's giving my website an overhaul. If you've got some spare time I'd appreciate it if you could compare the current website with this version of a new homepage (with no working links) and let me know in the comments what you think.

I'm also interested in what you think the current website is missing, or what cool new stuff you'd like to see.

Friday, February 19

Hit-Driven Industry

Recently I had some friends round for a day's gaming, and one of them happened to mention that board games must be a hit driven industry, like computer games (one of them works in computer games). He mentioned that most games probably don't make much money, or even make a loss, but this is covered by the hit, which is so wildly successful, that it pays the bills for years to come, and provides plenty of income which can then be risked on another batch of contenders, one of which may also be a hit (but most of which won't).

In the three and a half years that I've been publishing board games, I've read a bunch of things that make me think my friend was correct in his description of the market:

  • Wired report that over 15M copies of Settlers of Catan have been sold.
  • In 2008, 75% of Steve Jackson Games' nearly $3M turnover came from Munchkin products (7 years after the original Munchkin release).
  • Bruno Faidutti, designer of over 50 games was making more money from Citadels than the rest put together in 2004 (several years after Citadels first came out).

If you're going to start a company publishing original games there's two likely ways to succeed doing it:

  1. Start with a massive hit, that funds the rest of your product line for a while, until you're established.
  2. Start with a massive wad of cash, that allows you to establish yourself with a reasonable product line and gives you time to find your first hit.

Success or failure will rely on a few things: ability to manage your finances, ability to market your games, ability to keep costs down and not least ability to choose successful games.

There's no way to guarantee a game will be a hit. Playtesting helps, but that's not the be all and end all - your playtesters might love it, but be unrepresentative of the market. Gut feel combined with a good knowledge of the market and what's successful helps, so does excellent marketing that makes everyone want a copy before it's released.

It is at least six months since the release of all my games, with none of them selling like hot cakes I realise they are not going to become massive hits. I still hold out hope for them being successful (i.e. profitable), but it's not going to happen overnight. I need a real breakout hit, something that is hugely popular and sells extremely quickly. But how do I convince the designer of such a game to bring it to me rather than the established publishing companies, and will I recognise it if I see it?

Friday, February 12

Liquid Assets

In the publishing business you want to do two things: make stuff (in my case board games) and make money. If you're honest you're doing thing A to do thing B.

But the whole process is cyclical. You can't make games without some money to buy them (and pay for the artwork and marketing), and you can't make money without games to sell.

Publishing is one of those businesses where you have to shell out a lot of cash up front. I pay my artists before the game has been manufactured. I pay my manufacturer before I've sold more than a handful of copies.

For the last three years my company has been profitable, i.e. it's worth more now than it was last year, and so on. All sounds fantastic doesn't it? The problem is that my assets are mostly stock. Stock is not a liquid asset. What's a liquid asset? According to Wikipedia:

A liquid asset has some or more of the following features. It can be sold rapidly, with minimal loss of value, any time within market hours. The essential characteristic of a liquid market is that there are ready and willing buyers and sellers at all times.

Clearly I can't just sell all my stock instantly at full price, it takes time to sell stock, so stock is not very liquid. Why is this a problem? If I receive an excellent prototype tomorrow that I want to make immediately I need to be able to pay for it. The manufacturer will only accept cash, so I need lots of cash on hand to fund the manufacture of my next game. If all my assets are stock then I can't make another game until I've sold enough to fund the next game.

Of course, the other problem with stock is you don't know how much it's worth. You know what you paid for it. You know what it could be worth if you sold it all at full price, whole sale price or even the average price of your sales to date. But you don't know how many you can sell. You might have sold the last game you will ever sell yesterday and all your stock is all firewood. Or worse: firewood you are paying to warehouse.

What can you do to avoid this problem? Probably the easiest thing is not over-produce. If you order 5,000 games and only sell 1,500 then you're in trouble. If you produce 1,500 and sell 1,500 you're on to a winner. The problem there of course is that the more copies you make the better your profit margins or the cheaper the final product - which could lead to more sales.

Another thing you can do is try to drive sales early. The faster you sell your games the sooner you turn them into cash that can be re-invested into new games. It's probably worth making less money sooner than more money later.

Wednesday, February 10

Breaking into Shops

If you take a look at my stockists page on my website, you'll notice that there are almost as many UK stockists of my games (that I know about) as there are American. America however is a much bigger market (I know of 600-odd games stores in the US and Alliance service 2,500 game and comic shops.

So why is my market penetration so much better in the UK despite several US distributors? There are several reasons:

  1. UK shops like to carry UK publishers' games: they're local
  2. It's easier for me to contact UK shops by phone and in person
  3. It's easier for me to organise events in UK shops
  4. My games are cheaper in the UK (less shipping)

So what can I do to improve the number of shops in the US (and Canada, Germany and the rest of Europe for that matter) that carry my games?

The first thing I did was to email all the shops I could find an email address (or web form) for, introducing my games and asking them to consider stocking them. That seemed to go pretty well, but several of the shops wanted demo copies of the games, either to see them before deciding whether or not to stock them or to allow demos of store-owned copies to help them sell the stock they have.

It costs me at least £21 to send a set of all three games to the US so it would be a very expensive effort was I to supply copies to all those who wanted them from the UK. However, my US distributors have stock on hand in the US, and can fold demo copies in with the rest of their stocking order to the shop in question, so the shipping is effectively free. So I'm trying to set up a promotion where one of my distributors allows shops in the US they service to buy my games at a reduced price. Apparently some big US publishers offer shops the chance to buy demo copies at 25% of the full retail price - so that's the deal I'm trying to set up.

One of my US distributors currently have my games on consignment: they have a decent amount of stock of all three games, and they just let me know how many they've sold each month and then I invoice them for those sales. Since they haven't already paid me for the stock they've got on hand, it's going to be easier to set up a promotion with them than someone who has already paid me full wholesale price for the stock they are offering at a reduced price.

Obviously the price I've negotiated with the distributors for the ordinary copies is based on them selling the copies at the ordinary price, so I've got to negotiate a new price for each game when sold through the promotion. Also, I don't want each shop to stock up on cheap copies - I want it limited to one copy per game per store, purely for demo purposes. Fortunately, this is something the distributor can organise.

I've gone around the houses a bit trying to find the right person at the distributor to talk to about this, but hopefully it's going to be sorted pretty quickly, now that I'm talking to the right guy. Things are also being slowed down by the time difference - it usually takes 24 hours to get an answer to my questions :(.

Saturday, February 6

The Offer That Will Not Die!

At the beginning of January I offered free worldwide shipping on games bought from my website, as an effort to boost sales and to raise awareness of my games and company.

Due to some technical problems at PayPal, I've been unable to cancel the deal at the end of January like I planned, so it's still running on my website at the moment, and it will remain so until PayPal fix the problem with their buttons feature. I would say that this could be your last chance to take advantage of the offer, but it might finish Monday or it might finish in 2011!

Was the offer successful? I think it was. I sold nearly thirty games that I doubt I would have sold otherwise, either through my website or through retailers and distributors.

My big concern was that the offer would spark a rush of sales from countries where I already had distribution, effectively hurting those retailers and distributors who are already my customers. The good news is that only five of those sales were from countries where I already had distribution (four from the UK and one from Hawaii). The rest came predominantly from Australia (half of all the sales), the Far East and Norway.

One of my other reasons for the offer was that I hoped that getting the games into the hands of gamers would hopefully lead to some more sales - Aaron buys the game and plays it with Bob and Carol, Bob thinks it's okay, but Carol loves it and buys her own copy (which she later plays with Dave and Ellie ...). In one case this definitely happened, which is a great feeling. Aaron (real names have been changed!) bought a copy of Sumeria. A week later he bought another copy - he said he loved it and he was buying a copy for a friend. It's this kind of sale that's the ideal - the game is bought (this applies to all sales by definition), played (some collectors own hundreds of games they've never played), and the people who played it enjoyed it enough to lead to another sale.

In my mind that's a win, now I need to drive more sales, to hopefully lead to more. I'll blog again next week with what my next plan is.