Monday, September 24, 2012

Battle of the UVPs

In my last post I talked about the difference between the more entrepreneurial, Unique Value Proposition and the more common, small business, Useful Value Proposition. In many respects, this is the tension within the game trade. The dreamers, those who strive for the unique, bumping heads with the conventional, those searching for marketable products that are useful.

It's not just the game trade, I once worked for a technology company that sunk itself because the CEO was an engineer, obsessed with what was possible, rather than what he could deliver to market. His cadre of scientists, guys with PhDs in glue, kept re-designing their product rather than bringing one of those designs to market. The "useful" guys, the guys with the millions of dollars who wanted a finished product, eventually tired of this. They sacked the CEO, tried to get the glue guys back on track, and eventually closed down the whole company when they couldn't deliver. Fists were waved at the usefuls, but what choice did they have?

So you can imagine in the game trade there is some tension between the creatives, the uniques, and the guys who have to eventually sell their product to consumers, the usefuls. In the game trade, the uniques blame the distribution system, a system that once catered readily to them, but have now found their markets shrunken, competition stiffened, and a subsequent strong desire to sell only useful stuff; Magic, D&D, Warhammer, etc. These useful products have ready markets, albeit markets perhaps a tenth the size they once possessed at their height.

The uniques, most with day jobs, untethered by the daily demands encountered by the usefuls, fume and re-route their products around distribution, going direct, selling PDFs or products even THEY know aren't profitable in print. More recently they've embraced Kickstarter, a seemingly magical realm connecting consumers who want unique product with the uniques themselves. How many of those uniques will fail to delivery because they lack the skills of the useful? Time will tell.

Retailers, meanwhile are stuck in the middle. They want some unique, but generally crave more useful product. It should be noted that retailers love the unqiues, and lament they can't serve them better. Retailers are so useful, they could easily do something else at probably double the pay. However, their love of the uniques, their love of the games these people create from nothing, drives them to sacrifice their time, their life energy, just to be near them, just for the opportunity talk about them every day. That kind of devotion would come with a huge reward if it were directed at technology or science, heck, even teaching.

Retailers do their best to represent their love of the uniques in their Useful Value Proposition. As I've mentioned before, 50% of what we sell is a single copy of a game. We are that focused on individual customers, that focused on single copies of specific games. That's pretty unique I think. However, even embracing this model is criticized by the uniques, as they feel this "periodical model," selling a product in the style of a magazine instead of a longer term, evergreen product, makes it impossible for them to sell in any depth in stores.

But what are retailers to do if they want to remain useful? Retailers respond that the stuff isn't useful enough, that there aren't enough warm bodies interested in a years supply of books on Kobolds or obscure board games imported from Slovakia. Retailers decry the lack of useful product in the pipeline, while the uniques, the designers, are now more focused on selling all those unique products to consumers directly. And even if the retailers, the usefuls, wanted to carry that obscure unique stuff in depth, the distributors, the gatekeepers of usefulness, put on the brakes.

So what's the solution? Well, thousands of years of commerce aren't going to be changed tomorrow over the likes of Kickstarter, a service comprising less than 5% of the known game trade. More than likely, Kickstarter is eating into former hunting grounds of the uniques, the PDF market, Indie Press Revolution, and the direct to consumer publisher websites. They've also grown the pie, I think, creating a bigger market, a win-win for everyone. It's only when a big company like Reaper or Steve Jackson games gets involved, that we have a canary in the coal mine effect.

Let me also state that the usefuls will always find a way. By nature, they are useful. Anyone can become one, unlike the uniques, which require a special creativity and talent that not everyone possesses. However, anyone can make a living being a useful, anyone can run a game store with a minimal amount of intelligence and cleverness. Game stores will live on Magic, tournaments, board games, coffee or as I once told my business partner, women's shoes, if we must. We will remain useful. It's nearly the whole of what we do. When the Venn diagram of the usefuls and the uniques intersect, then we can do business. There's really nothing that's going to change that, although a little more understanding of this would remove some of the acrimony and hostility.

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