Sunday, April 19, 2015

Mature Markets and Board Games

We've got a very diverse game store. Sure, we don't sell comics or frisbees, but we try to sell a wide variety of games in the key, four hobby game areas: CCGs, RPGs, Board and Card Games, and Tactical Miniatures. We use strong inventory practices to make sure each department is healthy. Diversification has been our calling card for years. Yesterday I realized two game companies now account for 43% of our sales so far this year.

The first one is an easy guess, it's Wizards of the Coast. They produce the biggest game in the game trade, Magic the Gathering, along with the comeback kid, Dungeons & Dragons. They also dabble in board and card games. The second game company is a bit of a surprise, it's the Asmodee Group with the other 16%. Asmodee Group owns Fantasy Flight Games and Days of Wonder, which is how they've gotten that second position. You wouldn't notice this if you weren't reading game trade news.

Our top 15 games account for 62% of sales.
The top 30 usually accounts for around 80% of our sales.
We sold games from 195 different companies.
What's most interesting to me about Asmodee, is they've bought the top position in the board game market. Each of our other game categories is what marketers would traditionally call, mature. There's a market leader with well over 50% of sales. Those games have been Magic: The Gathering, Warhammer 40K, and Dungeons & Dragons (until recently and that's another story). But what about board games? Board games has lacked a market leader, from that traditional definition sense.

Has Asmodee done it? Not quite, but close. Our Asmodee Group board game market share is 36%. Our next closest company is Wiz kids, with 7.5% market share. Their our Pepsi to Asmodee's market leading Coke. After Wiz Kids, it drops off significantly, like a mature market.

Why does this even matter? First, it's interesting that the French holding company that owns Asmodee Group, that buys things like parking lots, is also keenly interested in Ticket to Ride and X-Wing as a means to make money. It shows a faith and understanding of the global hobby game market that is not expressed elsewhere, especially when it comes to actual money. You can say what you want, but backing it with millions of dollars is the best speech.

Anyone with even a modest amount of money could do this, but they haven't until now. Does this represent a cultural shift? A cultural shift is what we're all looking for in the game trade. A cultural shift means we're not in a bubble, in a cyclical phase. It means this is the tip of the iceberg, an indication we might be catching up to Europe really. A cultural shift will mean we view money and risk differently. Not only will we be more willing to take risks, but other, more mainstream entities will as well. This new opportunity brings a huge amount of instability with it, which has traditionally been dangerous for the the game trade.

Second, it marks a maturation of the market and how board game companies will position themselves moving forward. It will likely mean a change to the distribution model. Not only is it likely exclusives will be pulled, such as with Days of Wonder annoyingly being sold only by Alliance, but Asmodee is positioned to distribute themselves, much as we do with Wizards of the Coast and Games Workshop (the other market leaders). That will only strengthen Asmodee as they bring in additional publishers and titles from Europe.

There are lots of retailer grumblings about the distribution model right now, with a lot of that aimed at how distributors handle Asmodee Group products. Distributors are acting as the ultimate arms dealer in these boom times, selling to us as well as Amazon and a slew of online stores. How each does this is a major bone of contention among retailers. Do they fulfill brick and mortar first or last? Do they sell to Amazon? Do they "floor" games for Amazon, holding them back? A direct to retailer model (which exists already with FFG), would be appreciated, especially if it came with organized play support. If we can do it with Games Workshop, why not with a company with three times the sales volume?


  1. Excellent article. As yet I have not checked how much of our board games sales are Asmodee Group, but since I know FFG is our leader in that category this makes me believe that I will find a higher percentage from the combined entity. I also agree with the cultural shift, and that we will be seeing board games become a more prominent component of game stores.

  2. What does the term to "floor" games for Amazon mean?

  3. Great article as always. Interesting with Cryptozoic opening their exclusivity with Alliance and going back to its other distributors. Bet that 27% in one game makes you a little nervous. What does "Whiz Kids Board Games" include...HeroClix, Dice Masters, Attack Wing(s)?

  4. It's essentially stock piling product for a fee and buying it on a consignment basis when needed. It tends to create ill will with products that are in short supply. Personally, I don't really care.

  5. Wiz Kids includes pretty much all things Wiz Kids except licensed RPG miniatures. So all the ones you mentioned. We do exceptionally poorly with WZK products, I think.

    I'm not too concerned about markets maturing. I'm definitely concerned about the industry maturing and the kind of attention it can draw. It's one of those things where you think you're on the cusp of a gold mine when in reality you're about to have the rug pulled out from under you.

    It reminds me of opening up of the Internet when we ran BBS systems. We thought we had a new service to offer, when in fact, the Internet was about to obsolete us and we needed to transition to something entirely else. Those who had capital could transition to ISPs, the rest of us just disappeared.

  6. I don't get what Asmodee has to do with parking lots.

  7. I skipped mentioning their holding company.

    Why does this even matter? First, it's interesting that the French holding company that owns Asmodee Group, that buys things like parking, lots is also keenly interested in Ticket to Ride and X-Wing as a means to make money.

  8. What an interesting article ! As I live in Europe and as we sell 3D printed game accessories to brick and mortars shops, this is what I could say, from discussions with shop owners in France:

    - Asmodee has got a good reputation in distribution. Their team is extremly focused on actively promoting new games. Their policy toward shops is friendly (some exclusivity for the Brick &Mortar shops) before it goes online for instance. The official speech was to make a lot of money by selling very accessible games and getting money to feed core gamers publishers. Could we imagine that Asmo will take good advantage on the FFG's ability
    to distribute core games for shops with nice organized play and a mix of "ticket
    to ride" and focus on selling "time twister"-likes and very accessible games to
    grocery stores? Or will they increase the reseller price like a monopoly? It is such a competitive environment that I could hardly imagine this.

    - Kent, concerning the interest of this big investment fund in Asmodee, I would imagine that the plan is to prepare the company until the IPO on stock market and make X5 or X10. They might have a 3-5 years middle term strategy toward Asmo. This investment fund gives them the money to grow. Indeed, "a little bird" told me Asmo wants to catch up and do better in market
    share for board games than Hasbro, which owns Wizard which owns Magic
    right? It seems consistent. Getting bigger and bigger.

    - However, to make more money, the challenge for Asmodee is to increase its sales by putting new products in big groceries stores without creating a sale price gap too important between independant brick and mortar shops and these big super malls.

    - You talked about maturity of the market. This is very interesting, in some French specialized and independant shops, tabletop games combined (descent, caylus, ticket to ride) do better than Magic already. In other shops, Magic remains the number 1 but not in margins, so some of the owners complain they have too much resources allowed to that organized play for lower margins.

  9. Dunno if this is related, but I'm seeing more French companies on board game kickstarters (which are a blessing and a curse, for sure).

  10. Interesting insights! Our board game sales are just about equal with CCGs, but I don't think that's the norm. We have a ton of Magic centric stores in the US.

  11. Hell Blackdiamond925 : I assure you lots of independant shops remain Magic centric in France, some of them rely only on Magic in Paris. However, I heard about a very agressive battle on price that make some shops becomes less and less interested to spend so much time on it, while the margins are decreasing.

    The CCGs still are very strong : Magic, Yu gi oh, and I do not talk about Pokemon (which was the key licence to launch Asmo's success), they remain very very important.

    To someone: Surprising ! Well, on which game are you thinking about? The international board game companies with French people ? The coming of Kickstarter in France in May or June could create some space for small indie companies as the big ones are already on the place for sure:)