Need vs. Want

An anonymous commenter made a very good observation about the game trade and its customers. Feel free to comment. There's not much I can add to this succinct analysis:

I suspect this taboo topic of money is related to the guilt attached to a lot of games purchases. Another miniature or pack of magic cards is a self indulgence in a lot of cases, making the issue of spending a lot a reflection on the character of the customer. Additionally, the mental category of "optional purchase" brings out the cheapskate in most people, because although we can emotionally write off fuel and food and shelter, and perhaps even a night out as a social cost, there is little to no emotional leverage to justify buying what is essentially another toy.

In some ways this guilt is unfounded, because there is often a large amount of social, entertainment and self actualization value in these products that far outstrips other spending you might do - e.g. hours spent painting and playing with friends and family a board game with miniatures in it.

This emotional backdrop sees us regularly hand over massive amounts of money to parasitic supermarket cartels without any thought, yet mentally challenge the price of every game purchase made. Thus the taboo.

The Holidays and Game Stores

Curious customers ask if the holidays are a big deal for game stores. Well, it depends on what kind of game store you have. If your store is in a college town, you might see a reverse pattern, where your customers go "home" during the holiday period and Summer. This, I imagine, would be a nice change from regular retail, in which you wouldn't dream of taking a vacation during these times. Consider this if you want to run a retirement game store. Stores in malls tend to be intensely focused on the holiday months, as sales are concentrated in November and December, as are their general public customers. Their stores are more "muggle" friendly throughout the year, so they're set up well for the holiday period. It's more of the same for them, I'm told.

Our store, the game "destination" store that's also family friendly, sees a big uptick in December, but only because we sell board games year round. Our board game sales skyrocket in December, while the rest of sales are up a smaller amount. In the end, our December months are usually 40-50% higher than a normal month and those sales continue into the first week of January.

It's not a make or break month for us, but it is where most of the money comes from for bigger projects, like expansions and inventory increases. Summer months, July-September, are 20% jumps. This is when many of the new hobby games get released. I think they're too bunched up actually, but supposedly this is when young people have time to play them. In the past, when we were new, Summer was about catching up with our finances, rather than now, where they add more opportunity for projects.

December is also the end of our fiscal year, so there are strange issues related to that as well. For example, if our inventory has expanded, it's considered taxable income, so while we're trying to ramp up inventory at the beginning of the month (I'm $15,000 over budget right now), the goal is to have that budget balanced by the 31st. So there's this enormous bubble that must be gradually and gracefully deflated in a matter of a few weeks. This is stuff that's invisible to the staff, but it's a big part of my job. We want full shelves on December 1st, empty shelves Decemeber 31st and moderately well stocked shelves for our returning customers on January 1st. We also gave a bunch of items to charity this year to not only be good guys, but to reduce our taxable inventory burden. If you've ever seen the birth skit from Monty Python, in December I'm like the hospital administrator with the machine that goes "Bing!"

We stock differently for December. Some "core" board games get a deeper inventory, while we also struggle to bring in games from the SF Chronicle list. The list games are tough to manage, due to their mass market obscurity and "family" focus. In other words, we tend not to like them, so the list games need to be brought into the store in quantity and sold out completely in a three week period. Anything left over after that simply won't sell for us, perhaps ever.

Sometimes we find games we like on the list, but it's often one or two that we'll reprise, mostly for the next list period. Flip Out and Finca come to mind and I know Snake Oil from this year will be a regularly stocked game for us now. It's an Apples to Apples variant where you sell things to a particular customer using a combination of cards in your hand. Sounds like work to me, but it's actually pretty fun. Many of these games, once they run out, will be abandoned forever by both us and our suppliers.

With the holidays, we generally sell 30-50 board games a day. Again, we sell and stock most of these games, nearly 1,000, year round, so it's not something we just bring in for the holidays. That said, we stock up on puzzles and more mass market alternative games like items from Gamewright, Pressman and Winning Moves. Sales ramp up slowly. The first two weeks of December look like a strong sales period in any month. The period before Christmas doubles and then triples in sales. Again, this varies between stores, but in our case, it's incredibly consistent. In fact, the holiday period is the most consistent part of our year, with sales hard to nudge up, since the game trade trends tend not to filter out to our "muggle" holiday customers.

The holidays are where we test our policies and procedures. It's when I spend the most time with staff as we have multiple people on shift all the time. In fact, I just gave a raise yesterday after realizing we had a star player in our midst. The holidays are when we can refine our sales technique, which is about maximizing sales of the right thing to the right person. Gross selling is easy, but finding the right fit and avoiding returns is key. Holiday sales are the only time we see returns of games; gamers don't return things unless they're broken. Despite all the work, the holidays are also when we can relax and show a little more thanks to our colleagues and customers. Thanksgiving should really be in January for us.

The Balance

During one of my holiday rants, discussing why game publishers can't seem to get it together, the question was asked why the game trade was so muddled. Simply put, there is no money in it. The wise do something else or wise up and move on. For example, most of my mentors from 8 years ago are no longer running game stores. They'll sometimes gently inquire whether I've had enough yet, pointing out that you can leave before your soul or your bank account is entirely worn down to nothing. I'm actually still enjoying it, so I'll stick around.

Because there is no money in it, those who are in the game trade are running on passion. Passion is a great ingredient, like sugar in a cake, but it's not enough. It also requires business competence, the kind of competence that likely precludes you from entering the game trade, so it's usually home grown and discovered in the thick of things. It's also why those who do succeed still make strange decisions. They're mostly self taught.

The history of the game trade is littered with the business corpses of those who couldn't get the balance right. Great ideas along with a sense for business is a rare combination. There are those who have succeeded, and you can walk down the aisles of your friendly local game store to learn who they are. Steve Jackson is a prime example. Or go find yourself a copy of Designers & Dragons, which should be back in print in early 2013. Most of these companies are gone, despite creating amazing product. Because they lacked business sense, it turns out most were never viable at any time in their life cycles. As a business owner, I know that feeling, that you're doing great now, but something is just flawed in your model. Or worse, you live in a purgatory of "getting by."

So you have passion running the show with no economic motivation and questionable business sense. The good news is that if you do have strong business sense and (not or) a sense of creativity or at least your finger on the pulse of your customers, you can do well. In fact, people who were good elsewhere are great in the game trade. Big fish. Small pond. Getting them to stay in the pond is next to impossible, once they start looking at their personal needs: mortgage, college, retirement.

The other really obvious thing about the game trade is because there's no money in it, most people  have a day job or other means of support. Now imagine you're going about your life, paying your mortgage, going to work every day (not at your game company) and you're making your game company decisions in your spare time. Are these the best decisions? Are they consistent with your long term success and based on norms in your industry? Are you spending your best hours of the day contemplating them? In other words, will your family suffer if you make the wrong decision?

Most people in the trade are not really in the trade. They're creative and all, and perhaps would like this to be their full time gig, but it's not and it shows and because of that, the trade remains a backwater. Looking at my own sales chart, I would say the part-timers and bathrobe businessmen account for about half of our sales, and probably about 75-80% of individuals. We need them and respect their work, but don't ask me for a street date on their products.

So how does Kickstarter fit in? Well, it breaks the tension, the tension between art and business. It says, screw business. Business has been getting in your way! The self appointed gate keepers at the game distributorships will hold you back no longer. The card shops who claim to represent you to the public will by bypassed (follow that card money and you'll see the modern game trade was built on CCG money). Middle men will go down in flames. A revolution is upon us.

Of course, there's a reason why there are gate keepers, to keep out products that aren't financially viable, to provide a service that prevents junk from gumming up the system. Occasionally, the gatekeepers stop watching or perhaps the money is too good, like with the D20 glut, and we see a ridiculous amount of product of questionable value in ever increasingly shorter periods. At one point there were well over a hundred D20 products released each week. I got into the D20 glut late and was buying up D20 product by the pound.

A small number of those D20 companies struck a balance between business and art, while most got the creative bug out of their systems and are gone. Some leveraged their efforts to springboard into a "real" company, as we say with a handful of D20 publishers that still exist in different forms. Unlike Kickstarter, they had to at least create a formal business and establish funding and methods that could work for them later. However, most of those D20 companies are road kill, ridiculed, their product now shunned by fans. We take no D20 at our store. If you bring me some to buy, I'll kindly offer to recycle it for you, with a few exceptions.

My talk of gumming things up and "real" and not real is likely offensive to you if you are on the Kickstarter bandwagon, but there is no free lunch. There is no secret pill that will allow for thousands of years of commerce to come to a halt because of a website. The game trade exists because of that balance of passion and business. Kickstarter allows those with passion and a sense for business to get a leg up, to get a shot at the show. Kickstarter is not the show. Those who can strike the balance can succeed, but there is no substitute for balance.

The question is really what will be left when the dust settles. Will some of these companies make it into the trade? Will there be collateral damage, a besmirching of an industry that is already black with smirch? Will an army of bathrobe businessmen turn people off to small press much like the "flight to quality" that occurred with D20 and roleplaying games. The D20 logo is the kiss of death for most D&D players. Recognizing that started with retailers. Will the Kickstarter logo on a product work the same way?

I don't want to end down on this. There should be a sense of celebration in crowd sourcing and the wonder of new developments. There is wonder in art and creativity. I just want to stress that the business side of things will have to come. Even if it's in your bathrobe. There is no substitute. Strike a balance.

Top Game Companies 2012

You should read the title as"our" top game companies of 2012, since we're one store and not the entire game industry. We do strong sales and we don't have much local competition, so I still feel we represent the local community fairly well, at least with what is sold in local brick and mortar stores. This does not tell you a good number of things, like sales by department or sales by individual item. We compare a lot of data when making our decision and this is just one small data set.

The point of this exercise is two fold: First, we want to see who we should be paying more attention to. Wizards of the Coast dominates at a nearly frightening level now that Magic is so popular again. It's such a big percentage of sales that I sometimes wonder if we need a WOTC employee, someone whose sole job it is to manage that brand in-house. That sounds crazy, but I've seen it done elsewhere when Games Workshop dominated. So reason one is to see who needs more attention.

Reason two is to put that growing pain in my posterior into perspective. Who is being a pain in my ass and should I continue to tolerate it? What company is requiring a disproportionate effort? Battlefront with Flames of War was in that category before we dropped it. Konami with YGO still seems to justify the occasional chcken on the carpet event, at least until employees start quitting or the police get called one too many times. Yes, they're that bad. Note that the nationwide game store backlash against this horde of monsters will be immense if it begins to falter. Konami should address this.

The chart also says the consolidation of board game companies with one distributor is really a buzzing fly of a nuisance when put in context. I sell more Coke products than Days of Wonder or Z-Man and I kind of think I sell a lot of both of those.In fact, I'm going to call it the Coca Cola Line. If a company falls below Coke, a necessary but nearly invisible commodity product category, I'm not going to worry about it.It doesn't mean I don't like, respect, appreciate or try to sell the heck out of those products, it just means it shouldn't keep me up at night. 10pm worried phone call from an employee: Well, is that game above or below the Coca Cola Line?

Finally, as I've discussed many times, Other is huge. Yes, Other, as individual companies, falls below the Coca Cola Line, but other is the reason for our existence, our expertise, our killer app against big box stores. Other is that one item for that one customer. It's paying attention to the game trade and getting excited and inexplicably talking about things that from the charts, really don't matter. It's how we carry more individual items than Costco with a smaller percentage of floor space. Other is really why we continue to do this. Other is energy and excitement and the hope that one of these others will make it past the Coca Cola Line.

1. Wizards of the Coast
2. Games Workshop
3. Fantasy Flight Games
4. Paizo Publishing
5. Konami
6. Privateer Press
7. Pokemon USA
8. Ultra Pro
9. Cardfight Vanguard
10. Rio Grande Games
11. Steve Jackson Games
12. Mayfair Games
13. Chessex
14. Reaper Miniatures
15. Wiz Kids
16. Asmodee
17. Coca Cola
18. Battlefoam
19. Days of Wonder
20. Z-Man Games

NPC (Tradecraft)

The most surprising thing I realized when I opened a store was the feeling that I was a non player character, an NPC in role-play parlance. The NPC is the necessary enabler of the hero, the mundane who knows where the adventure is located or who has the information the hero needs to complete their quest. The NPC smooths out the experience for the PC, creating the illusion of continuity. In the real world, most people feel they're the PC, the player character, the person who does the thing.

When you own a store, you agree as part of the social contract, to take on the role of NPC, to fade into the background. At best you become the Expert, the NPC of most use to the PC. For the most part, customers will treat you like you're an NPC in their important heroic life, and it's your job to wipe the counter, wax eloquently about your subject matter, and play your role. They agree to be heroic and you agree to let them. Tell me one more time about your character.

This contract is very fragile as nobody needs the shop keeper, the middle man. Everything we have can be obtained elsewhere, often cheaper. So although we clearly provide a valuable service, proven by our continued existence, the dance is a delicate one. In fact, this social interaction is most of our added value. It's so important to the transactional nature of the business, that I've avoided even mentioning it.

Nobody wants to hear your chatter Artie

A lot of what we do as store owners is very much in the NPC vein. When it's done right, we create a kind of performance art, arranging the stage so that it appears we do nothing all day but play and talk about games. We're like the NPC store owner in fantasy video games whose always standing behind the counter in the exact same pose when the hero returns from the dungeon, ready to sell him that +3 longsword.

The shelves are neatly arranged with product that somehow shows up. The place is always in good shape, meaning the bills must get paid in some nebulous, magical fashion (trust fund? Dot com?). The bathrooms are clean, the carpets are swept, and the store is well lit, warm and inviting. This is what we do, and if anyone actually notices the details of how it gets done, or if we fail to maintain the act, then we're doing it wrong. It becomes about us and not about the experience. It should look effortless, even though it takes many hours a week to pull off. It's our NPC duty. No heroics here.

Our accomplishments as business owners aren't even in line with what our customer believe we should be doing. We should provide interesting, free events to entertain them. We should stock their game, knowing precisely their desires and having it available at all times. We should be fonts of knowledge on new, future and theoretical products. In reality, our primary job is to make money, something we're not supposed to talk about. You'll notice that I talk about a lot of things, but never about actual money, gross sales, etc. The game store community itself regularly gets nervous when we discuss nuts and bolts, in fear of a government bogeyman who will get us all on some nebulous charge of price fixing. Boo!

So sure, we can be of benefit to the community, contribute to charity, help the Boy Scouts, but making money comes first, so we can one day retire or buy a house or put a child through school. Things we need that we barely admit to ourselves. Every toy, gadget, or inventory dollar spent on the business to please the PCs is a buck not available to NPCs. It's a balancing act, a tight wire act, really. Bread and circuses.

Nobody talks about money, unless it's over a beer, in hushed tones, with others of our kind, with plausible deniability. Do you know which stores do average, above average or amazingly high sales in your area? It has nothing to do with their perception in the gaming community. The answers would shock you and you wouldn't believe me, provided we broke out and decided to act like PCs, and not the NPCs behind the curtain. The NPCs know the answers to these things amongst themselves, but we all agree to play our roles regardless. For the most part, the NPC experts all get along.

So as NPCs, we're somewhat conflicted in what we're expected to be, what we're supposed to be, and how we're perceived. Those who break their NPC mold and go PC are hounded by their peers, dismissed by their communities, and generally ridiculed. Also, when you talk money with customers, their immediate assumption is: a) they're giving you too much of it as they are your best or close to best customer, b) you're making more than you deserve, and c) you have somehow broken a social more in bringing up such matters. "C" is certainly true. So to decide to be the store owner is to accept a certain level of humility, that nobody really knows what you do, that what you do will never be heroic, and your success will (must) never be acknowledged. You tell customers you're always doing pretty good, not great (failure drives them away and success makes them feel taken). You agree to play the role. It's like playing spy, but without cool gadgets or a vital public service.

The Good Kickstarter

If you want a good example of the"plateau of productivity," what works in Kickstarter and retailer partnerships, you should check out Evil Hat's new Fate Core project. It's a perfect example of how publishers can cooperate with retailers. It has a generous margin, low count buy-in, and most importantly, promises store owners their customers who pre-order through the store will get the same digital content as Kickstarter supporters. That level playing field is of paramount importance. It took about three minutes of thought before I knew this would work for us.

It's not perfect, and I know many of my customers will support Evil Hat directly, because they want the publisher to get the maximum benefit, which I can understand. They may also want  to participate at a higher level by shaping the product through forums, which we can't provide through this type of partnership (at least not yet).

What about the money? As I've mentioned, Kickstarter projects are death for game store cash flow, as it ties up working capital. However, with the playing field leveled, I'm confident we can take in pre-orders during the design period, which counters this huge issue. I'm no longer spending six times the Kickstarter project amount to support it. It's the same as any other product, since I'm selling it without the wait.

This scenario won't work for every publisher, as Evil Hat is the Cadillac of small press (not really small press at all, if you ask Fred). Good Pajamas Publishing will not get the same attention as Evil Hat Publishing with an identical offer, because I don't know them and they don't have a track record of steady sales in my store. We've sold over 250 Evil Hat products over the years, which means this is a fairly low risk endeavor (although the dozen Kickstarter copies of Dinocalypse Now was not a good fit for us, but we're learning, right?).

Speaking of low risk, the debate we have in store is what exactly is the purpose of Kickstarter? I'm a capitalist at heart, so I'm pretty laissez faire, fine with whatever works if it's ethical. However, others have expressed strong opinions that Kickstarter is a key to, you know, kick starting your company. Should Evil Hat and others with established success records continue using Kickstarter once they've kick started? I can't see why they wouldn't want to, but I could see why others, stores and customers, may draw a line in the sand in continuing to support established publishers through this process. It does tend to undermine the current system.

Most small publishers that continue beyond their kick starting period are generally non-starters for me now because of this. Some, like Greater Than Games (Sentinels of the Multiverse), have announced they will stop using the Kickstarter process now that they are established. I think riding off into the sunset after getting a solid kick start may be an expected element of the future of crowd sourcing. There should be a question of how successful could a company possibly be if they're still using the medium.

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