PDFs were a godsend to small publishers, but they also, to a great extent, cut out the retailer. Sure, the market grew, as there are PDF only publishers, but a big slice of the market was eliminated, and probably more importantly, publishers were often given an edge selling electronic products direct to consumers. Whether you're talking Paizo with PDFs given out as part of their subscriptions (and very clearly NOT to retailers) or Wizards of the Coast with their subscription based character management system, those companies found ways to sell direct to consumers, and those companies right there are most of RPGs when you look at market share. There are projects like Bits and Mortar that attempt to level the playing field, but it's tiny in comparison.
3D printing is the next wave of disintermediation that will effect miniature gaming. Some companies will become like the PDF publishers of RPGs and just sell you a template to print models on your printer. But you can easily imagine a Games Workshop, if they decide to become innovative in their next incarnation, giving out a template when you buy a box of models from them, but only if you buy direct like Paizo does with their subscriptions. Some retailers in other countries report their players are already playing with 3D printed forgeries from China. Like the PDF market, small miniature game companies will probably disappear from game store shelves as they go electronic, while big publishers will find ways to disintermediate retailers through electronic offerings.Then there's Kickstarter, which I've talked about extensively, which takes the sizzle from our steak, removing a lot of the buzz we get from selling stuff, but not so much profit. At $55 million a year in sales in a $1.25 billion dollar industry, Kickstarter is more an up and coming disintermediator, but it's having a big effect on how we do business.
The Internet, is of course, the 500 pound disintermediator in the room. Market share is still small around 5%, but it's growing larger at a fast pace, around 10% a year. Amazon owns 25% of Internet market share and they're the 7th biggest retailer in America. The rush to the bottom, the pressure to open your own Internet store, or sell via Amazon, is very strong in the game trade, but it's mostly a diversion or a way to overcome poor demographics, i.e., low sales volume caused by your small population base.
The solution to disintermediation is to move away from being the intermediator, if that's even a word. Find ways to offer goods and services in a primary manner, rather than as a middle man. We will always sell stuff, but it's clear that being an enormous pro shop with a tiny bowling alley in the back in which we use volunteers to operate is not quite right. I've often used the expression of the tail wagging the dog, when referring to events, a necessary marketing evil to drive sales of stuff. It's a valid model if you accept you're the middle man.
Getting beyond disintermediation requires we offer services and goods that can't be taken from us. It requires that our events be far, far better than what can be done at home. It requires they be monetized, like a bowling alley, and that they're clean, relatively comfortable and well lit, like a bowling alley, and that professional services, leagues, and experts are constantly available, like a bowling alley. Retail can't be shoved in a small section of our business, like a bowling alley pro shop, but the alley itself needs more respect and support. It might require well organized volunteers as a store priority, something few stores do well, or it might require paid staff to exclusively run events. There are good stores that do both, but they are in the minority and we need to learn more from them.
Getting beyond disintermediation can also include consumable goods and services. The coffee shop model, which I've scoffed at a number of times, has turned out to be a winner, if you can run a coffee shop. Most game store owners are not professional retailers to begin with, certainly not entrepreneurs, so this is beyond their capabilities. However, for veterans, that add on business is a model to consider. We have many stores now with the coffee shop, the pub, the malt shop, or something similar. Endgame in Oakland is planning a game cafe model that includes author signings and musical performances. They're not just offering muffins to gamers, they're offering more reasons to visit them.
This is on my mind as we embark on a big store expansion project that will provide us a couple thousand square feet for our events. Avoiding disintermediation will be in the back of my mind in each decision, including better chairs, hookups for monitors and sound, and even the choice of flooring. The ability to be a valid social venue needs to be improved. One litmus test on my mind is the question: Could you have a Superbowl party that rivaled someones living room, albeit with space to play board games or something similar? One thing I've had kill a business in the past is rapid change that exceeds resources available. We want to make sure we're building for the future, not just for the right now. A misstep with resources will tie up plans for years and can kill an existing business. I think we know where we want to be, but it's more a mindset than a muffin shop.
