Elitism vs. Professionalism

Working in the game trade can be intensely frustrating. Most, not some, but most people you work with on a professional level don't have their act together. Part of this is the barrier to entry in the game trade, which doesn't exist. If you want to start a restaurant, the city will put hurdles in your way: sewage hookups, health inspectors, extra fees and certifications. Distributors in other trades might have minimum initial orders of thousands of dollars. Want to start a game store? Great, sign a lease and put in your first $100 order.

I'm not going to argue that there should be a higher barrier to entry, although I have in the past. It's incredibly easy to start a game store, publish a game product, or even start a distributorship, if you know where to start. That's the trade. The guy with the home office is on the same playing field with the staff in the multi-story office building. The 10,000 square foot game store is in the same town with the guy with 40K racks in his T-shirt shop. Unfortunately, this leads to ... inconsistencies. It leads to a level of confusion, lack of communication, and jackassery that you might not be familiar with if you came from, say Earth.

In the face of such jackassery, asshattery, or my favorite from the late Amy Winehouse who asks "What kind of fuckery is this?" the tendency is elitism. Elitism is the turning away. It's turning your back on all the nonsense and cloaking yourself in your consistent, happy reality. The game trade is plagued with elitism. The publishers hate the retailers and the distributors, seeing them as an unnecessary evil and turn instead to the fans as their salvation. The distributors turn their back on the publishers, paying them slowly and communicating with them (and about them) poorly. Retailers become haughty and cagey, with inscrutable business decisions and a tendency to look down on customers who don't see things their way, publishers that don't tow their line, or distributors that don't understand them.

What we end up with is a silo effect. Very good people with very good businesses stay in their silo and decide not to deal with the outside world. They skip trade shows, they shun customers, they create processes that are all about them, and not about their clients or customers. They despise other retailers who don't do it like them. The silo is a symptom of elitism. The silo takes the people who could make a difference and locks them up in self-imposed exile.

What we need is more professionalism. Where elitism is turning your back on what plagues you, professionalism is facing it head on, every day. It's taking on the stupid, on a daily basis, and maybe, over time, finding a way to fix the stupid. This openness is where we find growth, both as individual businesses and as an industry. In fact, the beacons of professionalism in this industry tend to be the ones that are wildly successful right now, be they publishers, distributors or retailers. I know, because I seek them out. I want to stand next to them. I want to give them my money or my respect. Their open attitude keeps me from hiding in my silo. And when I start acting more professional with my peers, it turns out it doesn't look so bad out there after all.

Kickstarter and Retailers

Simply put, as a retailer, I want in. Kickstarter is a way to fund gaming projects by taking pledges at various levels and when the goal is met, the product is produced and those who pledged get their goods. This allows authors to gauge interest on marginal projects and allows for risk free publishing. It also allows vanity projects to get done without the risk of spending thousands of dollars not knowing if anyone is interested.

As a retailer, Kickstarter projects generate a lot of buzz and allow for something different in the store. The same product sold through one of our distributors might not get a second glance, or if it did, I might order one copy. However, the sexiness and exclusivity of a Kickstarter program makes it not only likely I'll sign up for an interesting project, but likely I'll pledge to buy multiple copies. I think this halo around Kickstarter is temporary, especially as mainstream publishers begin to use it, but that halo exists for now.

So what do I need as a retailer? I need margin. In other words, your $20 print on demand vanity project that you sell for $22, is not likely to be something that will work for either of us. However, your $20 project you plan to print 5,000 copies of and sell through the hobby store channels at the usual margins, is a likely candidate. A minimum retailer margin is 40-50% plus free shipping. So that $20 book should cost me no more than $12 and you pay the shipping. In exchange, I'll likely order 4-6 copies, WAY more than I would from distribution and way more than the average Kickstarter backer.

How many retailers are likely to do this? Probably not many. There are roughly 3,000 game stores and the "alphas," the top 10%, look outside the box. That's a potential 300 stores. In the case of most projects, it's the top 1%, making it just a handful, but that's for now. I think your market is those 300 stores. I don't ask that every publisher create a retailer tier, but I do request that every publisher consider how a retailer tier could work for them.

This assumes you want to work with retailers, that you want your game in front of people, that you have a business model that doesn't involve Kinko's or Lulu. Heck, it assumes a business model exists. In any case, consider a retailer tier. Make it at a level your comfortable with when it comes to margin, shipping and quantities ordered. What I don't need are free PDFs (unless you want to offer them to my customers), input in your project, or constant updates. I'm low maintenance. Like most stores, I've got a game purchasing budget of hundreds of thousands of dollars. Please take my money, maker of games.

Projects with retailer support Black Diamond Games has already pledged to support:

• Journeys to the West: A Pathfinder RPG Voyage
• Random Dungeon Generator as a Dungeon Map
• Gaming Dice in Chocolate and Sugar
• Monsterhearts (at IndieGoGo) 

If you've got a retailer supportable Kickstarter project, please email me and I'll consider supporting it.

Examples of what this looks like: 

My Gaming

Before this blog was exclusively about spouting off about a tiny sliver of the game trade, I included what I was doing in my hobby gaming. It's a bully pulpit of sorts that elicited  excellent advice. In the context of the store, I've been waiting since Christmas for our expansion plans to firm up. I've been in a monetary holding pattern, making sure we had  enough money for the project. That wasn't confirmed until after we had our taxes done (which almost sunk it). This assumes we stay on budget and everything else falls in place, of course. Meanwhile, I distracted myself by writing a Pathfinder sandbox campaign and that's what this blog post is about. You might want to move on if that's not your thing.

The first rule of writing a sandbox campaign, I am told, is not to write anything you can't immediately use. This was the rule I threw out entirely. You know those awesome game masters who can make stuff up on the fly as if it had always been there? Yeah, I'm not that guy. I'm the guy who organizes his gaming books by usage before a session to optimize book pulls. I'm the accountant of game creativity. I'm the guy you want running the game store, not writing the games. So I may have, you know, over prepared. I do find my players appreciate this though.

The desire to write a sandbox game came from a few insights. First, I was utterly tired of running other peoples adventures, even the exceptionally good adventure paths from Paizo. It stopped feeling like my game, despite there being a fascinating level of creativity in those products. The best game I've ever played in is the Serpent's Skull game I'm in right now. Absolutely amazing, but not as satisfying as making up my own stuff.

Second, I have been running my home brew urban campaign for a decade and I needed wilderness. I needed trees, and animals, and overland travel. Rule number one for my players: You can't stay in town.

Third, adventures felt too formulaic. They all had the same variables, the same nods to various character classes, and the same conceits, notably power levels and wealth inputs and outputs. You could tweak the curve, something D20 had down to a (dismal) science, but there wasn't much left that hadn't been done. The sandbox promised an organic experience with "safe mode" clearly in the off position. It was dangerous, and that's what I needed. Screw Encounter Levels.

The inspiration for the "campaign" style came from Celtic mythology. The Irish town of Tara, the historical record showed, was ritually humiliated every year by a monster that would march in every holiday, put the defenders to sleep and burn their town down. What a great story! How could you not inflict that on a group of players? On such and such a day, we're coming over and shoving your face in the dirt. Whatdya gonna do about it? This happened every year for as long as anyone could remember, but not this year. Now go.

The detailed sandbox format was inspired by Robert Conley and his blog Bat in the Attic, a guide to sandbox games. Where I went a bit off the rails was in detailing every hex and town as if I were planning to use it tomorrow. I couldn't deal with the minimalist style descriptions you find in books like Points of Light.

I wasn't happy knowing the name of the town and its leader, I wanted to know what kind of problems they needed solving, the shops in town and where the stone from their walls was quarried. Where is that quarry and what's happening with it now?  I wanted maps and stat blocks and it's not like there aren't a ton of resources out there for that. There's no need to ever create a dungeon map again, really. The fun thing was you could just keep asking questions and that led to more content, which hopefully held everything in context and was (and this is the hard part) fun. The end result was over 400 pages.

Where this turned from a detailed island the size of Ireland (originally planned to be the Isle of Man) and into more familiar adventure territory was in the timeline of major NPCs. Eight different factions trudged along with their good and evil plans (mostly evil). The characters could help, interfere, or just go fight dragons, if that's what they're into.  That's not entirely sandboxy, but a more modern adaptation.

The party could abandon the hunted town of Tara or they could liberate it from its annual humiliation. Because it was a sandbox, anything was possible, so they could lead armies, acquire lost cyclops artifact to boost their power against the forces of evil, or ignore it all and get lost in the vastness of the ancient forests. With 400 pages, it's possible to come back to it a couple times or even have multiple groups playing at once and interacting.

My overland design strategy was to have broken up defined geographical region, like valleys and forests, with two or more factions of good and evil vying for control, and having a mini adventure that could tip the balance of power. I wanted to avoid mega dungeons and create adventures that could be accomplished in one to two sessions. The worst thing in the world is being excited about the sandbox and knowing you'll be spending the next two months in the Dread Necromancers Dungeon of Doom module. There were no off the shelf adventures dropped in. Mini adventures also allows for more casual play, with drop in players, something that has been explored a lot in the sandbox community.

As I began writing, a lot, familiar themes kept popping up. This is because there are only "x" number of wilderness monsters in the rulebooks of "x" power level, so everything possible has more or less already been done. That's where Tome of Horrors really helped out. ToH has a ridiculous amount of animals and plant encounters that helped bring the outdoors alive. A lot of source material arose when they were writing Wilderlands of High Fantasy, the ultimate D20 sandbox set.

Other books that were crucial to the design work included the Paizo Game Mastery Guide, which allows for "statting out" towns to bring them to life and establish their resources. Someone needs to create a book of settlements.  The Tome of Adventure Design was a handy brainstorming book for coming up with various plots and schemes. Inspiration came from Hex Crawl Classics from Frog God Games and the D20 version of Wilderlands of High Fantasy. The aforementioned Points of Light I and II were good for a few seeds (written by Conley and others). Every monster book was crucial, Bestiary 1-3, ToH and even the Monster Manual for 3.5 for those proprietary beasts.

As for electronic products, HeroLab allowed me to take Paizo NPCs and tweak them and add templates to existing monsters. The Pathfinder System Reference Document was a permanent tab on my browser.

This encounter calculator helped with random monster tables. It should be noted that "random monster" could be an event, or is otherwise a "monster" doing an activity in which only one may be getting ready to clean your clock. Every region had their own random encounter chart related to what was actually there.

Settlement Creator helped create villages and towns with GameMastery Guide stats. I did not use a mapping program for my maps and did them all by hand. It just worked better that way for me, although I played with HexMapper for a while.

Anyway, I could clearly go on and on about this, but I'm happy to answer questions or take your advice if you wish. There's also our campaign blog and a secret design blog that was more about coming up with the concept. Facebook is where we post information and other campaign documents, in our private group.

One premise of the game is there is no player map. The continent sized island is almost completely unknown and undiscovered. It's so important to the concept of the game that I'm reluctant to post it here. The photo above is how we started.

The COGS Coaster

In the category of charts only a retailer could love, I've been tracking my cost of goods since opening. The general cost of goods for the game trade, in a mature store, is around 55%. Our discount (AKA margin) is 50% for most things, 45% for Games Workshop, and sometimes as low as 40% for CCGs like Pokemon and Yugioh when we have to buy from distributors (it's higher direct). Magic is pretty close to 50% by the way, which surprises many people.

Despite this 55% baseline, what really effects your COGS is how you liquidate inventory and improve your numbers with low cost of goods items, like used merchandise and things like Magic singles. What this chart really shows is efficiency, or lack thereof. Our first year involved dialing in our product offerings, so there were occasional sales as we dumped product, selling at a discount, which raised our Cost of Goods Sold (COGS). Subsequent years saw more stable growth.

The new store likewise saw a purge that lasted for many months. Our plan to sell toys failed due to not fully understanding the market and the recession and we only survived because our game center drove sales tremendously. The transition out of that bad inventory took a while and only in year seven on the chart do you see stability. Every toy dollar had to be slowly converted to a game dollar. Making bad purchase decisions is costly, and often deadly for retailers. The corpses of dead stores are filled with these bad decisions and I often feel areas of my store are necrotic.

Not in the numbers are items with no calculated COGS, such as used items and Magic singles (ding & dent gets included). It's mostly a wash, although our Magic single sales in year seven really took off as we got serious, tripling in sales from 2010. It's still a tiny portion of overall sales, but it would account for at least 1% of COGS if it was included.

Boom Time Psychology

It appears that the game trade is booming. I have to preface that statement, because there are plenty of struggling, failing, and flailing stores this does not apply to. However, unscientific polls and discussions seem to point to great strength in the trade. We're riding that wave, and as I've stated, I'm highly dubious it will last since it's based on the shifting sands of the CCG market. That said, we've seen steady growth in all our departments for years and I expect it to continue despite the boom.

This success tends to mess with my brain as I try to plan for the future. There is fear of complacency, that with the extra money you start loosening up purchasing, employee hours or you start buying those things on your need list. I would call it a "wish" list but every store has things they need that they can't afford.

The situation reminds me of stories of Great Depression era people whose relatives discover money squirreled away in their homes after their deaths, despite the departed having millions in assets. Survival instincts are hard to break and it's often more comfortable to go on with your tight budget than accepting that you can change your habits a bit, you can loosen up. Tightening up is how we got the money in the first place.

Heck, most retailers are even afraid to mention that they're doing well in fear of the consequences from customers, employees, competitors and even the landlord (everyone complains their doing poorly to the landlord). If you don't have a culture of transparency, you're at the mercy of rumors and erroneous perceptions.

The danger of not addressing the reality of success is you don't progress. Retailers are like sharks, in that they must keep moving or they die. There are product trends you can miss, competitors that need addressing, events that need re-organizing, employees that need hiring, inventory that needs culling, and debts that need servicing. Plus, if you're ambitious, there is probably a long term expansion plan or the desire to set yourself up for financially for the future. I would love to own a building, for example, the Midwest game store retirement plan, but in California that's impossible without a couple hundred thousand dollars in cash.

In our current situation, we've got money in the bank that could be used for: a) expanding our game center, b) paying off all our debt, or c) the foundation of my son's college fund. There is no right answer on this one. There is no particular time in which you're supposed to take your draw and be content (c).  There is no best time to expand your business and hope you've got a long term future (a). It's always good to get out of debt but you don't want to miss an opportunity (b). The answer to this question will depend entirely on the mind of the business owner.* 

The most difficult thing about running a small business is there is no blue print on when things are supposed to happen, including success and failure of any variety.  What's the chance of failure in year eight compared to year three? It's the same. It doesn't get any easier or less risky, so we sew $20 bills into our clothes when times are good while occasionally running out of bags because ordering extra seems extravagant and wasteful. We try to keep our enthusiasm up for a job we can't easily quit. We are successful because we constantly feel the pull of the entropy of failure.

So small business owners have stress when things are bad and stress when things are good. The key to long term success, I think, is enjoying both of these as curious puzzles that need solving.


* the answer is a

Throwing Around Numbers

Wizards of the Coast made the rare disclosure that they sold $200 million in Magic last year. That's twice their revenue from 2008 and also explains a lot of our success recently.
That $200 million dollar amount is interesting. It's roughly the amount Games Workshop took in for 2011. So all of GW, Fantasy, 40K, Lord of the Rings and their nifty paint and tools, equals one brand: Magic.

As a store owner, I can't help think of the differences between these two. The small amount of space Magic takes up compared to the acres for Games Workshop. The bulky, nearly immovable terrain tables and cabinets and shelves of terrain needed for miniature games compared to the folding tables for Magic. Magic feels ethereal, wistful, likely to flit off at any moment like a fairy, while miniature gaming feels stolid, stable, and unlikely to go anywhere soon.

Sounds a lot like our customer base too. The problem with Magic is it remains a commodity, perpetually available at deep discounts  (an area where charging sales tax kills us), while miniature gaming tends to develop a more stable community. In an experiment a couple weeks ago, we sold our Magic Dark Ascension cases (not boxes, cases) at a price approaching Internet discounters. The result was our best gross sales day ever, and a struggle for more supply, as quite a few people supported us with case purchases rather than buy online. I would like to call the Internet the "shadow" market, but clearly, when it comes to Magic case buying, we're the shadow and they're the market. We're working to build our Magic community, but there's always that shadow over our efforts.

Like Wizards of the Coast, we saw our sales rise dramatically over the past three years because of Magic, but the rise is scary because of where it's coming from. If we saw a rise in 40K, we would be more content and willing to invest more into that community. However, a rise in commodity games, CCGs, is just bonus. It's shifting sands. Sure, there's community, but the money feels like some extra cash we shaved from the Internet sellers. So yes, we plan to expand our store and actually cater to the RPG community even further, but it's with an understanding that we're one bum set of Magic (and Yugioh) away from seeing it all fall apart. We're in a perpetual three month wait and see cycle.

Anyway, I was going to write a post on looking at the positive, at finding why stores succeed instead of giving excuses for why they fail. The moral of this story is diversification. Enjoy the boom, expect the bust, diversify into other games. The biggest threat of a boom, is neglecting your other customers or other departments. GW can tell you stories about how their sales people's skills atrophied during the Lord of the Rings miniatures boom when the movies were out. That's a real danger. Or maybe you start doing the math and realize that D&D makes about 10% of what Magic does, so you start wondering how much more money you could make if you replaced those crusty book shelves with more gaming tables for the Magic crowd. Money warps your brain. Don't let that happen.

Finally, some perspective. Hasbro is publicly traded, so we can do more math to determine that Magic is around 5% of their revenue. It's money, but it's no big deal. We don't know the numbers for Dungeons & Dragons, but I assure you, it's likely to be a rounding error when you dump it into the Hasbro spreadsheet. If they do ten times more Magic than D&D, like we do, then D&D would be .5% of their revenue. So if Hasbro is paying any attention at all to that brand, they're looking at how it can be something that it's not now, like a video game franchise. The danger from Hasbro, therefore, is not monkeying with the brand, it's losing it in the math.

Shrink Wrap

When I would shop at game stores before I had a store, one thing I swore I would never do is shrink wrap books. How can I possibly tell if I want a book if I can't see it? Most of the "shock and awe" stores, the ones with tons of inventory that seem more like time capsules than businesses, tended to shrink wrap books. Often it was because they intended to carry that book until it sold or their store closed for good. However, it turns out most stores have a pretty good reason to shrink. It's one more store practice I probably owe someone an apology over.

What I discovered fairly soon after opening my store is that a lot of RPG books will bow and warp with the weather. Eventually you're left with a sad little book that nobody wants. That book, despite how good it was, would end up in the clearance section, and no store owner wants to re-order something they just clearanced.

This is also a reason why game store owners like me prefer hard cover books (unless those warp -- AKA Mongoose). I'm often fairly oblivious to price, so whether it's a $20 softcover or a $35 hardcover matters little to me. There's even a part of my brain that would rather sell far fewer $41 Warhammer Fantasy hard covers than more $33 soft covers if I don't have to worry about them warping and becoming shelf worn.

So to fix the warpage problem, we shrink wrap the books. We've got a "machine" that does that. It's basically a roll of plastic on a roller, an arm that melts it, and a hair dryer to shrink it. Often we can shrink wrap a warped book and it will miraculously go back to normal within its sterile little plastic wrapper.

Most of the books we shrink wrap are for Pathfinder. Why? Paizo puts out a huge number of books. We carry all of them. Only 9 of those nearly 200 books are hard cover and most of those soft cover books sell, as a group, slower than your average hard cover, but fast enough that we very much want them on the shelf. This means they'll almost all eventually get shrink wrapped or suffer the scourge of warpage. The difference in the way we shrink and others shrink is that we wait until signs that a book is beginning to warp before jumping into action. A lot of softcover books sell fast enough that they don't need the shrink.  If you're clever you can use that information to see our best sellers (reinforced by the fact you can read, and are therefore more likely to buy that book, since you can see it).

I go into all this because I want to dispel the thinking that we shrink wrap to prevent people from reading RPG books. In fact, it's pretty obvious to me that you're more likely to buy an RPG books if you can read it, especially a book from Paizo. While older D&D books tended to have a nugget you desperately wanted along with a bunch of schloch, the Paizo books tend to deliver the whole package. At least that's my personal opinion and my sales experience. So when we shrink wrap a book, it's done reluctantly, with the acknowledgement that this will hurt sales. It's not to keep it for posterity in the hopes it one day sells (like our shrinked AD&D books). It's also not that way to prevent shoplifting (like our shrinked Warhammer 40K books, which disappear into our Game Center). It's just one of those things we need to do to carry that line.