Tuesday, February 28, 2023

Static Cling

If you were going to write a hobby game store business plan, an honest one, you would have to look at the headwinds. I wrote about the problem with Games Workshop fulfillment today, with the bottom line for me being a shrug. I refuse to reward inefficiency by doubling down on product, so I shrug with the state of affairs and move on. I simply can't get the product I need for my store. But how many times can I shrug?

Magic the Gathering is a huge line for me, and boy does Wizards of the Coast have a lot to unwind there! I'm sitting on tens of thousands of dollars of overstock from COVID times. I've got new product about to be released being sold online at near my cost. The price points of some of these new Magic releases are stratospheric and potentially alienating. I've got 20 play formats where only three work in my store with 17 potentially unhappy groups. The player base is still irate over their 30 year anniversary, $1,000 box flop. Shrug.

Dungeons & Dragons? OGL shenanigans, culture wars, and floated rumors of subscription gouging? Half a dozen different OGL clones emerging from mostly direct to consumer publishers, to divide the market? Shrug.

Wiz Kids and the ever expanding, 1,000 SKU, always out of stock product line? Shrug.

Asmodee gobbling up publishers and being unable to do basic business functions like invoicing? Shrug.

Smaller board game publishers unable to meet demand while an entire segment of Kickstarter board gamers has moved away from brick and mortar retail entirely? Shrug.

How many distributor accounts do you need to open to get the product you need? All of them? Shrug.

China, the source of most hobby game manufacturing, in crisis with rising wage inflation and geopolitical turmoil? Shrug.

My shoulders are starting to hurt with all this shrugging. If you were writing a business plan, you would have to assume this trade is in crisis, and you would need to include all of these shruggable offenses. You might correctly assume that all of these practices are intended to put the publisher first and you, as a retailer, a far distant second or third. It's why I write for you and don't expect change from them. The trade itself is having tremendous growing pains. That's right, it's a crisis of growth, not a crisis of decline. Things are really good.

The market is likely five times larger than it was when I started in 2004. The entire culture is now oriented towards hobby gaming. I spend most of my time out of the store and I kid you not, a common overheard restaurant discussion is how some young person is into hobby games and it's just so perplexing. Nervous laughter about how they're dedicated to Magic the Gathering, 40K, or Dungeons & Dragons. 

Yes, Dungeons & Dragons still exists. It's pervasive enough to be a topic of regular conversation and with the D&D movie releasing next week, it's likely to continue. Hobby gaming is part of American culture. Movie stars have D&D clubs. Geeks have inherited the Earth. But we saw that coming.

However, because geek culture is so pervasive, there's so much money on the line, it would be very easy for geek adjacent companies to swoop in and change the nature of the trade. The fear is that once you as a store owner, help grow a segment large enough, the growers are no longer needed. It's like what happens when we see a great game we've championed end up with Mattel or sold and then deeply discounted in Target. If you spent a decade demoing Blokus or Catan, only to see that game crushed under the foot of the mass market, you know what I mean. 

Everyone asks who could possibly swoop in and take control of segments? Well, anyone who thinks they can who has the money, and there's a huge amount of money floating around out there. Who would have guessed a French parking lot conglomerate would own the board game segment ten years ago? You could certainly predict (and I did) it was a segment without a market leader. There are no more of those.

This is all very scary if you have a static perspective of the trade. If you look at what you're doing now, or what you plan to do in your business plan, it's likely you'll need to shift dramatically in the future. If you cling to a static position, this looks really scary! This is clearly not a place to ride out retirement, or install employees while sipping margaritas on a beach. It's clearly not a safe place to invest your money into someone else's business. This is a trade that requires constant pivoting, provided your shoulders aren't too sore from all the shrugging.

Remember your job is primarily to pivot. Don't get too tied down to any one model or product line. Don't spend too much money improving someone else's property. Always keep your eyes on the horizon. We are front list driven. The question of what to buy is the question of what's coming soon. Any one segment is likely to fall into decline at any given moment, while another rises up to take its place. Stay diversified, both within the trade and beyond the trade. If you're the kind of person who suffers tremendously when you experience change, you need to make a different plan. 

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