Wednesday, July 2, 2008

Ticket to the Death Star

Days of Wonder signed an exclusive deal with the biggest game distributor this week, Alliance. All of their products will be distributed by Alliance in the future. These are the good folks who brought us Ticket to Ride, Memoir 44, Battlelore, and many others. To put the deal in perspective, Alliance is a small division of Diamond, the comic book distributor. They're the de-factor comic distributor because they've got an exclusive deal to distribute Marvel, which is close to half of the comics market. It would be as if Alliance signed a deal to solely distribute all Games Workshop and Wizards of the Coast products. All other distributors would become niche suppliers and all game stores would become their 1 hit point minions.

The DOW deal is a sizable blow to smaller game distributors. We use Alliance as a secondary distributor, but mostly because we get amazingly good service from a smaller distributor, ACD. Alliance, ironically, is a more technically up-to-date, cutting edge distributor, but this is an industry where ordering on the phone and personal relationships are more important. My point of sale machine can do electronic purchase orders, something that Diamond is rolling out by the way, but most game stores create their orders on the back of napkins or off a log of what they sold the previous week.

The decision to go exclusively with Alliance shouldn't have an effect on how we stock Days of Wonder products in the store, but there could be more out-of-stocks as we wait for a big enough Alliance order. DOW games are heavy, and we need to hit a high order level to get that industry free freight.

The game trade claimed the sky was falling when WizKids signed an exclusive deal, but look at them now. WizKids laid off half their staff, put games on hiatus and haven't had a successful product launch since. It's not exactly a recipe for success. Exclusive distribution appears to me to be a last ditch effort to consolidate and improve efficiency. That's just my impression, if things are as bad as these companies are claiming.

The last thing I want to see is a Diamond monopoly in games. Alliance is fairly easy to work with and has a lot of bright people, but in a monopoly environment, I'm sure you'll see service slip. Competition is a great motivator for innovation and improvement, and you can see it clearly in the small game industry, as each distributor tries to outdo the other. Diamond on the other hand is an automated behemoth that could care less whether I live or die, provided I pay my bills on time. I stopped carrying comics not because I couldn't sell comics, but because Diamond wasn't worth the trouble for such a small part of my business. I would wish for the game distribution tier to implode in a Death Star like twinkling of lights before I see an industry monopoly. The toy industry does just fine with direct sales and toy reps who represent multiple companies.

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