How We Did in 2012

Black Diamond Games did very well in 2012, with sales up 13% from the year before. We continue to see collectible card games boom, our CCG sales up 30% from 2011. Magic accounts for a frighteningly high level of our sales, something we're hoping to leverage in 2013 with a new online singles catalog using Crystal Commerce. Still, the big fear is we let other areas atrophy. We're also seeing stores featuring Magic pop up all over to take advantage.

Yugioh and Cardfight Vanguard are heating up as well. Vanguard, especially, will see more support as Bushiroad implements a stronger organized play structure, including upcoming pre-releases of new sets. Many Pokemon and Yugioh players play Vanguard as their second game, and between Pokemon sets, our Pokemon nights see mostly Vanguard sales. We're done carrying Kaijudo and we gave up on World of Warcraft CCG in 2011.

Collectible miniatures are up 37%, thanks almost entirely to Pathfinder miniatures. They haven't quite stepped into the space left behind by Dungeons & Dragons miniatures, but they're a welcome addition nevertheless. We do sales in Heroclix, but they're honestly more trouble than their worth, with our local community playing at other venues. We'll probably stop carrying them this year, something we've done twice before. 

Also hot right now, board and card games saw a 16% increase in sales. I think a lot of credit can go towards these games getting some love, especially programs like Tabletop, which reach customers we don't normally encounter. As for individual companies, Fantasy Flight Games has been doing exceedingly well for us, with licensed Star Wars and Game of Thrones products doing great. Our Euro style games also selling fast, with Settlers of Catan remaining on top and most Days of Wonders games selling strongly when in stock, thanks in part to Tabletop. Despite all the hemming and hawing over Kickstarter, it doesn't effect the bottom line much, at least not with board games.

I'm afraid that's the end of the good news though, as we've seen declines of around 10% in areas like role-playing games. D&D is dormant, which in most years accounts for half to two thirds of RPG sales. Kickstarter likely plays a larger part in the decline of RPG sales, since so much of what we carry tends to be "fringe." Accessories like paint and dice are also down about 10%. 

Classic games and puzzles are down 10% as well, categories that haven't aged well with the population. We'll be shrinking those departments down, rather than expanding them.

Tactical miniature games are down 10%. Although Warmachine and Hordes are on fire, it doesn't make up for the steep decline in interest in Warhammer 40K and Fantasy. When it comes to Games Workshop, they've jumped the price shark for us. It's hard to justify price increases that far outstrip inflation or cost of materials. These things are thankfully cyclical, but at the moment, if we were worried about non-CCG areas atrophying, there might be some evidence available for that.

Core

With Wizards of the Coast releasing old school D&D supplements via PDF this week, I thought I would take a look at our D&D core rulebook sales for 2012. This is a bit different in that it includes the reprints of AD&D (1st edition those just joining us) and 3.5. Our sales numbers include just the PHB, along with any bundles we sold that included that book.

For Pathfinder, the data includes the core rulebook and the starter box, two gateways to entry that may overlap. For D&D 4, it includes the Player's Handbook, the Heroes of X books, and the Red Box starter set, again with some potential overlap.

My general feelings are that there is more interest in AD&D than 3.5, with 3.5 close enough to Pathfinder to migrate those players down the road to the New Thing. Thus, we have Unearthed Arcana for AD&D getting a reprint soon and no word about 3.5 reprints, which I think, beyond the core books, aren't necessary. So please, go right ahead with AD&D reprints, but I may have to pass on 3.5.

Events

A few years ago I wrote about how our Game Center was like a hotel suite. It needs to bring in $128 on weeknights and around $200 on the weekends. There are many things in business we ignore when it comes to money. The bathrooms are a good example; something you do because you care and because you wouldn't want to work in a place that demoralized you with dirty bathrooms. Small business also gives a lot to charity, usually to local community groups, something we did last year. But events are not these things.

Events are revenue producing. You can't even hide events in the mother of all business lies, the marketing expense. If you're paying for event space, and you're not making money on events, either directly (CCGs) or a very clear indirect route that you understand (RPGs and miniatures), then you're simply doing it wrong and you'll probably fail. Stores that can't find their event formula struggle. I mention this because most game manufacturers don't understand this.

A big factor in marketing games is getting them played in stores like mine. Publishers know this, but the complexity and expense of designing such a program is daunting. The project is almost always given to the marketers to create. After all, from the game companies perspective, it's a promotional issue, rather than a profit center for them.The result is many of these organized play programs aren't designed with "event as profit center" in mind.

Sometimes that's fine, if the event is casual, there's no cost, and it drives one of those game categories with indirect, rather than direct sales. Pathfinder Society Organized Play is an excellent program by Paizo that costs us nothing, engages customers and drives sales indirectly. You don't need to buy something to play, but it results in sales of that product not required for the event. Wizards of the Coast is the best at organized play and provides free materials for both Magic and D&D (alright, and Kaijudo). They're by far the most generous of all game companies in this respect, with actual print materials arriving on a regular basis.

Also, look at Star City Games as the king of organized play for profit. I pay a fee. I provide the bulk of the prize value. Customers pay cash to play. Star City promise to drive dozens of people to my store. It's clean and effective and puts a lot of pressure on us to generate buzz and maximize attendance. I lose money if I screw it up. People drive hours to play in these events.

The two problem examples in the last week come from Fantasy Flight Games and Pokemon USA. Pokemon requires a background check and hoops to jump through to run sanctioned events in the store. They're the only company to do this, which is commendable, if not annoying to get through. However, unlike other game publishers, they set the price and parameters of their events to cut out retailers from making money. The organizers, not store employees. handle event fees. No need to get your hands dirty with that filthy cash, retailer, we'll take care of things on our end. So they really don't trust us to do anything right. They don't trust us with their customers and they don't trust us with their money.

Our Saturday Pokemon City Championships saw over 80 people attending, none of whom paid us anything to use our facility, and sales showed that. We were understaffed, it turned out, but it's hard to justify why we would do anything about it, why we should care, which is a bad feeling to have. It's like saying, why should I have a clean bathroom for you, what are you doing for me? Ouch. Would you stay in a relationship like that? Of course, the big question Monday morning was "Why the hell are we doing this at all?" This is not the 90's Pokemon. There are at least three other more popular card games at the moment, although Pokemon would be ranked higher in my book if it didn't have such an anemic margin.

Fantasy Flight is doing a great job with their league kits but their new regional championship program doesn't quite grasp what we need to accomplish. A $175 kit supports 16 people. First, any event with 16 people is a failed event in my book. Events should have enough product for open ended attendance or kits broken down so I can buy more of them at a reasonable price. We try to buy five  kits from Konami for our Yugioh sneak peak events, for example, and we pay $175 for each. Even if I over order, the kit is essentially product I'm going to sell later anyway.

When it comes to attendance, motivate me to fill the store. I should get stars in my eyes and want to announce your event to my friends and relatives, not laser focus on 16 guests I would like to invite. This is a for profit event, not a dinner party.

Events need a clear revenue path. Do customers pay $20 to play? That's what I'll be charging for my Yugioh event. The FFG kit comes out to around $11 per person in kit expense, so that would be reasonable. What if we get 15 people and not 16? Perhaps I'm expected to pay $175 just to generate buzz, you know, a marketing expense. I suppose I could buy more kits, like with Yugioh, but the path to profitability hasn't been defined properly.

I don't want to pick on these guys too much  (alright, maybe Pokemon), but publishers need to understand the retail business model. Both of these companies have reduced margins on their products, Pokemon being the lowest in the entire store. Nothing makes me less money per dollar than a pack of Pokemon. In other words, if you come in looking to start playing a game, the worst thing I could do is get you started with Pokemon. Game companies often justify lower margins by claiming marketing expense for stores, yet few follow through. Step up. Use those dollars wisely. Make better events. Talk to retailers.

Flippity Flop (The D&D)

End of year analysis often comes down to updating old charts and watching trends. This one is looking at the story of Pathfinder and Dungeons & Dragons and the how they've defied conventional marketing. In just two years (comparing 2010 and 2012 numbers), they've switched places in my store, something that should be impossible by old standards. Next year I expect you'll be able to compare 2009 and 2013 numbers.This has happened in quite a few other stores as well, from what I've gathered. As the D&D books go out of print, however, this kind of data becomes less relevant.

That doesn't mean D&D 4 is dead. At one point I thought it might be irresponsible to sell people on a game system going out of print, but there are still a good number of players, although they rarely buy books nowadays. I still find myself selling red box sets to boys interested in playing an RPG. The D&D name, combined with the low price point and the simplicity of the game makes it a better choice sometimes. You can still get most D&D products. I don't take that approach with adult customers. In my mind, Pathfinder is still ADVANCED Dungeons & Dragons and 4E is basic (or more accurately, casual).

The other data point I like to look at are core rulebooks. I haven't crunched those numbers, but I can say they're down in our store for both games, meaning we're likely seeing market saturation for new players and converts. The dream of the two games creating a larger pie is probably not going to come around, as last year was just average. Perhaps in 2014 we'll see a big upswing with D&D Next. There's still not a lot of proof that we can get both games firing on all cylinders.