Wednesday, December 21, 2011

A long rant about publishing boardgames, and why you need to know the supply chain

"It's like every game on Kickstarter is AWESOME!" I thought.
I was wrong:  Lunch Box Board Game looks terrible.  They are shooting for a $130,000 target, more than any game has EVER gotten from Kickstarter funding.  The biggest one, D-Day Dice, had a crap-ton of good buzz going, a print-and-play demo, tons of sweet overfunding goals, and is apparently an awesome game lots of people want to play repeatedly.  The second biggest one, based on long-running webcomic Schlock Mercenary, is by noted game designer (and, full disclosure, buddy of mine) Kevin Nunn, and is being published by designer/publisher (and, full disclosure, buddy of mine) Nicholas Vitek, who has had prior Kickstarter success with 1955: War of Espionage.

Seriously, go look at those three links.  You need to see them, side by side by side, to appreciate how terrible in comparision the Lunch Box Board Game looks.
The Lunch Box Board Game folks' stated business plan is to print up 3,000 copies of a roll & move trivia board game.  A little math tells us that they believe they'll spend $43 per copy.

From all my separate conversations with current and former Houston Gamers designers, as well as other small designer/publishers at Texas conventions over the years, almost all of them held to one basic math-based rule of thumb: to make any sort of money on a game, you need to print it for 1/10th the SRP (that's "suggested retail price," for you Elementary Education majors out there) you choose, based on your target market.
Mathematical proof follows:
You, the badass game designer, make the games for 10% of SRP, sell them for 18-20% of SRP to Fulfillment House Francine, who sells them to Debbie Distributor for 26-32% of SRP, which sells them to Roberta Retailer for 45-55% of SRP, who sells them to Cordelia the Casual Consumer for 100% of your SRP (or whatever the market will bear). Cordelia then plays the hell out of the game, and preorders a case of everything you ever design, forever, and also spends a ton of money on other games, funding everyone throughout the chain.  The end, everyone involved is a winner.

If you print a game for $5, it better goddamn sell for $50 or less, or your entire business plan is SKY HIGH.  You can make little burbling noises about direct sales through your website, and so on.  Doesn't matter, it's not how gamers or game stores buy games, for the most part.  Also, always keep in mind the key rule of board game fulfillment: "Shipping any product to anyone sucks, more than you can ever imagine." 
When Cordelia the Casual Consumer goes to buy a game, she goes basically two places: her Friendly Local Game Store, and her 2-5 Friendly Online Game Stores That She's Willing To Support In The Sense That She Will Always Order The Cheapest Deal She Can Find, Give Or Take A Couple Of Bucks.  She doesn't go to the manufacturer's website, because if she's buying online, she believes firmly that she deserves at least a 30% discount and/or free shipping, from the very first click.  Hell, why should she? By and large, the websites are terrible and updated infrequently, and all the best information and discussion is probably over at BoardGameGeek, except when it's not [Q: Judge, can we do that sidebar that another day? A: You bet your tin star, Marshall].

Both those retail outlets typically buy from the distributors who buy from fulfillment houses, because no retailer wants to deal with 10,000 individual publishers' invoices, shipping policies, etc.  It'd be like a bookstore trying to buy books from authors, one at a time, as they sold out.  Likewise, the distributors deal with fulfillment houses, because they don't want to deal with 10,000 individual publishers.  So you find a middleman who deals with the other middlemen, who ends up probably being Alliance.  Go ahead, call up your FLGS and ask "Which distributors can you order from?"  They'll be astonished that you don't think the games magically congealed on the shelf, fresh for your purchase.
Now, some printers do direct fulfillment as well... which means they'll charge you to print the game, charge you storage until your game sells, and then charge you shipping fees and fulfillment fees.  The upside is they're probably much more likely to have usable warehouse space and a pallet jack-accessible ramp than your back bedroom (which is where all your printed-but-not-yet-sold copies would otherwise go).

Big whoop, you're just some dude theorycrafting
I've worked in a TOP SECRET game website warehouse, pulling, packing, and shipping orders. Endless details, endless headaches, endless parade of bullshit. The boxes are always either too small, or too large, and then you don't have the right size label, and then people in Forn Parts want to buy things in baht and rupees, you wake up in the middle of the night screaming, etc.  Everything takes longer than you'll think.
Capitalism and the implications thereof
Once a fulfillment house or distributor gets bigger, they start offering bigger discounts on bigger shipping amounts, which means that our FLGS/FOGS could buy $500 of product from Distributor A, or $500 of product from Distributor B, and get a discount and probably "free" shipping out of the deal.  If the Friendly Game Store of Either Type splits their order up into $250 to each distributor, oh, dang, no more discount/no more free shipping from one or both of the distributors.  Again, dealing with multiple shippers sucks, so stores do their best to have one major distributor (usually Alliance) and a few minor ones as backup for what Alliance can't get.

The store is free to switch to another set of distributors, but realistically, they're all going to offer volume discounts because they, too, want to lump big pallets together and drop ship them, not break pallets down and goof with little 6-pack cases of games, etc.; If the FLGS/FOGS picks a good selection of merchandise and doesn't irritate customers, they'll make money and all is good.  Also, for fun, figure out how big a case of 6 of your games would be, and then multiply that cubic yardage by, say, 250. The fulfillment house and distributors may not even want a bunch of copies of your game up front, so you may need to ship games a few cases or a half-pallet at a time.

What about Amazon, smart guy?
Maybe you can sell directly through Amazon and actually make money... reviewing the guidelines makes me think, "hmm, $40 per month fees, plus 15% of sales, that's not bad..." then I remembered that it sucks to have recurring fees. If you consider $480 a year plus a dime-and-a-half rake, forever, to be an unacceptable cost of doing business, you can also ship your stuff to Amazon and let them worry about it, with Fulfillment By Amazon (oh, look, a fee schedule!). Will you make money this way? Beats me. Hey, if you can't sell your stuff, Amazon will throw it in the trash! For free! If I'm reading this right! Which I may not be! Thank you, Dave Barry! For creating exclamatory sentence fragments!
So I'll do Kickstarter right, and rake in the bucks!
Mmmmmaaybe... you can pre-sell games via Kickstarter and actually make money.  Some people definitely are.  Presuming it funds and your printer doesn't screw you, you'll get to ship a lot of games quickly (once you get them from your overseas printer of choice), and your life will suck for a while as you deal with that, but then for the most part, you'll have time to breathe.  You know up-front whether you're likely to break even, and you're avoiding a lot of fulfillment-house and warehousing charges.  You also get to meet the public, just like in this thread where the Lunchbox Game publisher gets to hear why their plan is terrible, and dismisses all criticisms

I think that Kickstarter has the potential to be good for the industry, because it's attacking a direly wasteful supply chain.  Go back and look at that model.  People print a ton of copies of a game, and they sit around, and then periodically ship them to Debbie, on to Francine, on to Roberta, and finally maybe Cordelia buys one.

It also has the potential to be very bad for the industry. When everything is being sold to the consumer "on spec," the potential to burn out customers is there.  The Kickstarter limited-availability model aggravates certain types of completists, and frustrates others.  Of all the products I've ordered via Kickstarter, fully half have been delayed by problems in the publishing supply chain (Alien Frontiers being the most notable).  Sure, I'm supporting creators directly, but that just makes me more acutely aware of the slowdowns and disappointments involved (that card I supported for Eminent Domain is less cool than I thought it'd be.  Good game, though.).  At some level, I'm simultaneously kicking myself for supporting some things, while missing projects like the adorable Creatures card game, which was/is a great gaming value in a small package.

If you think to yourself, "Todd, this entire system sucks, I just want to make awesome board games and make a lot of money..." well, yeah.  You need a hit, and probably two or three of them a year.  Get playing, get designing, get playtesting.  Cordelia is waiting; go make her some great games!

7 Comments:

Blogger ........ said...

I thought kickstarter was the holy grail of what's going to be new an hot, and while I am into some of the offerings there (miskatonic school for girls and rise) most seem like uninspired mess. Some games like the lunch box game needs all this crazy money to get made while other more inspired affairs barely ask for 1/10 of that.

Is this a lack of understanding about shipping and such like you mentioned that causes designers to ask for less? Or do you think it is just money grubbing that causes designers to ask for so much cash?

Also, Necropoly? Are they serious?

11:53 AM  
Anonymous Josh said...

Nice rant. I've received at least one absolutely horrible game from Kickstarter (which is one of the other problems IMHO of Kickstarter - no quality control). I'm now quite hesitant to support any of the games... but then again, without them we would have no Alien Frontiers or Eminent Domain; ah, the double edged sword.

7:46 AM  
Anonymous SuperEliteGames said...

I wish someone would worry about quality for a change, instead of profit.
I seem reasonable that a good game will sell well. But there's no point in worrying about profits if the game is not up to expectations.

7:53 PM  
Blogger Todd D. said...

Thanks for commenting, everyone!

"---" - Some designers on Kickstarter are asking for only part of their costs up front; if the designer truly wants to see a product succeed and they already have a cash reserve, they go small, and hopefully use overfunding goals to encourage greater results. I know Kevin Nunn's Rolling Freight was going to cost more than his goal to print, etc., but Kevin Brusky, the publisher, has confidence in the excellence of the game, and was going to fund the rest. I do, too - I backed it on Kickstarter.

Josh - Thanks. You make a good point on quality. If half or more of a production run turns out to be defective, the publisher may have no alternative but to simply ship it as is.

SuperEliteGames - I addressed this in my fourth paragraph: gamers are much, much more likely to buy repeatedly from companies and designers they know and like. I've never met any designers who deliberately designed mediocre games... but I've met many would-be game designers who had never heard of BGG, and hadn't become aware of the rise in Euro-gaming. If your game is "like Monopoly, except...", it's time to get current on the last 15 years of innovation in game design.

As a final note, if games aren't profitable, there's no incentive to re-print them! If a designer's not getting at least a little money from each copy, why shouldn't they just stop at 50 copies... or 5, or 1?

2:35 PM  
Blogger Seth Jaffee said...

I believe the "quality" josh was referring to is not "production quality" but "quality of game" - I have heard that comment a lot on BGG and Twitter, that Kickstarter allows bad games to be made.

The fact is that bad games come out all the time, they don't need Kickstarter.

Each project on KS is its own thing, and each supporter needs to ask themselves if what they're getting is worth what they're giving up, period. From the money's point of view, it's just like any other pre-order system. If you'd preorder the game otherwise, there's no reason not to do so on KS. If you can't stand the thought of pre-ordering, then KS is probably not for you either.

As for the rest of your article... very nice! I suspect most people do not know what goes into bringing a game to market, and you've given everyone a pretty good idea of what's involved. Thanks for doing it!

8:25 PM  
Blogger Todd D. said...

Fascinating article about whether Kickstarter is expanding or cannibalizing them... read the comments, too:

http://blackdiamondgames.blogspot.com/2012/08/zero-sum-or-expanding-pie.html

10:46 AM  
Blogger Jenny said...

I must say I absolutely love this post. We are currently doing a kickstarter project now (Village Wolves). I literally, was on last night researching and trying to figure out ways to make our project more successful. When I found this post I laughed bc you spelled out all the problems we have come across and some solutions. We wished we would have seen all of this before. Thanks for the post.

5:42 PM  

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