“New” Used Games: August 29th, 2013

aBRIDGEd – Used (Grade A)
Boomtown – Used (Grade A)
Carcassonne Big Box 3 – Used (Grade A)
Cranium: Family Edition – Used (Grade A)
Deluxe Illuminati – Used (Grade B)
Gift Trap – Used (Grade A, Missing Items)
Hare and Tortoise – Used (Grade A)
Jurassic Jumble – Used (Grade A)
Master Labyrinth – Used (Grade A)
MindTrap – Used (Grade A)
MindTrap II – Used (Grade A)
Scotland Yard (20th Anniversary Edition) – Used (Grade A)
Scotland Yard (Milton Bradley Edition) – Used (Grade B)
Trivial Pursuit: 90’s Time Capsule Edition – Used (Grade A)

“New” Used Games: August 28th, 2013

Apples to Apples Party Box – Used (Grade A)
Axis and Allies: Europe – Used (Grade B, Missing items)
Bang! 4th Edition – Used (Grade A, Missing Item)
Betrayal at House on the Hill (1st Edition) – Used (Grade C, Missing Item)
Call of Cthulhu LCG: Core Set – Used (Opened)
The Fury of Dracula (1987 Edition) – Used (Grade A)
Hacker: Deluxe Edition – Used (Grade A)
Lost Cities – Used (Grade A)
Risk (2003 Parker Bros Edition) – Used (Grade A)
Shadows Over Camelot – Used (Grade A)
Star Wars: The Queen’s Gambit (2000 Avalon Hill) – Used (Opened)
Stratego (1986 Milton Bradley) – Used (Grade A)
Vampire: Prince of the City – Used (Grade A)

Growth vs Profitability

The larger you grow, the more profitable you become right? After all, that’s why companies decide to grow after all.  Unfortunately, real life isn’t as simple as Economics 101.  Real life is vastly more complicated and growing your company can actually reduce your profitability.

Staggered Costs

Costs, specifically how costs accrue in a staggered manner is one of the reasons for this.  Fixed costs are the perfect example of, and most commonly known; cause of this.  Let’s take rent – when you move from one rented building to another; your cost increases.  Since most commercial ‘professional’ leases come in multi-year formats, you have to rent with growth in mind.  As such, if you were renting for 3 years; you have to envision and plan for your companies size in 3 years.   If you expect to be doing double your business by year 3, you can’t rent a building that is suitable only for your size now.  Which means your profit (if you have any) in year 1 is going to be lower than those in year 3 just because you have to plan for growth in year 3.

Now, rent is a simple fixed cost example which most people can see and understand.  However, let’s take another example – cardboard recycling.  Having someone drop by to pick up our cardboard each month costs $40.  Obviously, as we grow and receive more products, we need to recycle more cardboard.  At a certain point, we have to do more than 1 pick-up a month. So that’s another increased cost, but it’s not gradiated at all.  A 2nd pickup might give us enough space to grow for another year, but the cost increase (the additional $20 for another pickup) is fixed.

Increased Complexity

Complexity increases with growth.  As you grow, the number of balls in the air increases and the ‘shape’ of those balls can change.  When you’re smaller, many of the problems are simple to manage.  As you grow though, what used to be a small problem increases in size as well and can become a major issue.

For example – refunds.  Refunds are simple right? A customer asks for a refund, you refund him.  Except; what if the customer asks for a refund on a card he longer uses? Normally, this is not something that would happen; but as your business size grows the number of exceptions/one-off cases increase too.  As these one-off cases are just that, one-off’s; you can’t even write processes or procedures to handle them.  You have to deal with them individually – and as such, the amount of time required to deal with them increases as well.  Get enough ‘one-off’ cases; and you can find yourself spending half a day doing nothing more than fixing unique problems.

If you’re doing that, you aren’t doing something else just as important – so you have to add more hours, which means more cost, which can mean lower profitability.   Again – things like this happen in ‘staggered’ formats; each addition coming after a certain cliff happens.

Changing Expectations

There’s also an issue of differing expectations – as you grow, you’ll find expectations for your company change too.  The type and kind of service expected from an organisation that is 1 person large compared to one that is staffed by 100 is very different.  More often than not, meeting those expectations require increased levels of management & bureaucracy, which results in increased cost.  We found this out when we went from 2 to 3 employees.  You’d think adding 1 more person wouldn’t be that much more complex; but to keep us as professional, we had to increase our bureaucracy levels significantly.

Economies of Scale

So what happened to economies of scale? Well, there is obviously some of that.  Renting a 5000 sq ft warehouse is cheaper per square foot than a 1000 sq ft warehouse.  When you finally reach optimum capacity, your margin will have improved.  However, its the interim period where things are expensive.  So remember, growth is not always the route to greater profit.

New Releases: August 23rd, 2013

2012 Bones Vampire Package
D6 Dice Set – Black and Gold with Silver (12mm)
D6 Dice Set – Blue and Orange with White (16mm)
D6 Dice Set – Blue and Steel with White (16mm)
D6 Dice Set – Copper and Teal with Silver (16mm)
D6 Dice Set – Steel and Teal with White (12mm)
D6 Dice Set – Green and Yellow with Silver (12mm)
D6 Dice Set – Green and Yellow with Silver (16mm)
D6 Dice Set – Pink and Purple with White (12mm)
The Downfall of Pompeii
Dungeon Crawler: Mines of Khurgan
Large Dice Bag – Burgundy
The Lord of the Rings LCG: Escape from Dol Guldur Nightmare Deck
Pathfinder Adventure Card Game: Rise of the Runelords Base Set
Pathfinder Adventure Card Game: Rise of the Runelords Character Add-On Deck
Rise of Augustus
RPG Dice Set of 7 – Steel and Teal with White
RPG Dice Set of 7 – Pink and Purple with White
RPG Dice Set of 7 – Green and Yellow with Silver
RPG Dice Set of 7 – Copper and Teal with Silver
RPG Dice Set of 7 – Black and Gold with Silver

New Releases: August 21st, 2013

Cosmic Encounter: Cosmic Storm
Cube Quest
Mascarade
Monolith: The Strategy Game
Nick Stone: IMEF Squad Leader
Pathfinder Battles: Skull and Shackles Standard Booster
Pathfinder Campaign Setting: Demons Revisited
Pathfinder: Mythic Adventures
Savage Worlds: Deadlands – Hell on Earth: Reloaded
Shafausa
Star Trek: Catan – Federation Space Map Set
Tsuro of the Seas: Veterans of the Seas
Zombie Kidz

Musings: Crowdfunding and its purpose

This post comes courtesy of a mixed-up set of beliefs and a new card game: Audatia, a medieval swordfighting card game.  Let me be clear – this has nothing to do with the actual substance of the game/its playability or my feelings about the authors/etc.  This is more a general musings article trying to sort out some weird dissonances in my own mind.

The Kick-Off Point

I learnt about Audatia via mutual friends in the sword-fighting business.  I looked over the campaign, saw their breakdown on how they were going to spend the money, and my hackles raised.  I found it off-putting.  When I discussed this with Kaja, she pointed out I was being weird.

The issue that I brought up was the fact that a large portion of the funds raised (11,000 Euros) was being used for artwork, rulebook design and packaging.  Only a small portion of the actual funds (4,000 Euros) was being used to fund the actual printing.  That seemed high and just weird.

However, as Kaja pointed out, they are using crowd-funding for exactly what it is meant to do — raise funds for a limited-demand passion project.  They aren’t using it as a pre-order system as much, it really is to raise funds to do their passion project.

Still… it stuck in my craw.

Pre-Order or Crowdfunding

Don’t get me wrong – I understand the concept of crowd-funding for raising capital. In fact, I’ve supported a number of projects based on that – from video games (Wasteland 2) to movies (Veronica Mars) to small businesses (a random lady trying to buy a better machine stamp) and of course, a few board games and the obligatory comic book reprints.

In the vast majority of the cases, I knew I was throwing money at a project that I just wanted seen done.  In some cases, the chances of actual completion was low, but I thought it was something I should support.  Whether it was the online comic reprints for artists/stories I’ve been reading ‘free’ for ages or just to support a friend, how the money was going to be spent didn’t matter.

Yet, this project; it mattered.  I had, somehow, drawn a line in the sand in my head that said board games should be spending most of their money on printing/shipping cost.

Skin in the Game

Musing about it, I think it’s a matter of skin in the game.  As a business owner, I have a lot of skin in this business.   If we ever went out of business, I don’t even want to think about how much I would have lost – both in ‘real’ funds as well as opportunity/time cost.  I have a significant ‘skin’ in this game, which makes me eat/breathe/live this business.

Outside of actual game idea, rules and play-testing (which is in many ways a ‘hidden’ cost as some games obviously haven’t had enough play-testing), sinking funds into the artwork and design is a publisher’s skin in the game.  If a publisher isn’t willing to sink their own funds into a game, what right do I have to believe that they are committed to this?

Of course, skin can also manifest in other ways.  A dancer who has spent 10 – 15 years of their lives training has a lot of skin already when they ask for money to fund a production.  An online comic artist has sunk their time producing the strips, the developers in Wasteland 2 have their professional reputations at stake, etc.

Last Thoughts

I guess for me, board games crowd-funded should at least have their artwork paid for.  It’s obviously not the same minimum level – Guy Winsdor has a reputation to protect too (in the Western Martial Arts community) so it’s not as if he doesn’t have ‘skin’ in the game.  Yet, I guess I am holding them up to a different standard because they are doing board games, probably because I see so many games published with constant delays / etc.

New Releases: August 16th, 2013

Battlestar Galactica: Daybreak
Bolt Action: Assault on Normandy
D-Day at Omaha Beach (Reprint)
Forbidden Desert
Legends of Andor (Reprint)
The Lord of the Rings LCG: Assault On Osgiliath Adventure Pack
Mascarade
Nick Stone: IMEF Squad Leader
Savage Worlds: Deadlands – Hell on Earth: Reloaded
Sid Meier’s Civilization: Wisdom and Warfare
Star Wars LCG: The Battle Of Hoth Force Pack
Time ‘N’ Space
Trains
WWI Wings of Glory: Albatros D.Va vs. Spad XIII Duel Pack

Attrition Rate

One of my major concerns is the increasing rate of releases for board games in Canada.  It struck me one way to look at how often a ‘hit’ product might appear (or at least a decent product) would be to look at our release dates and what we kept in-stock.

The Methodology

I proceeded to pull from our database all the products that had a ‘Year’ indicated in its product information.  For the vast majority of products, this would indicate the year it was published (or re-published in a few cases).    I then figured out the total number of such products (No. of products added on the chart) and the number of those products still in-stock with us at the time of analysis (late-June 2013) as indicated by the bar graph (no. of products in-stock).

Now, note that the years used is the year the product was published / released generally (as drawn from BGG datasets).  So you’ll see items like 1935 and 1947 (Monopoly, etc) in there too – products that were released long before we ever existed.

Once the data was plotted, I also added a ‘Percentage still in-stock’ line graph which gave a % of items that were still in-stock compared to the number of items released in that year and plotted it all.  I’ve also added a second data line (the purple) for adjusting for ‘dead stock’. That is, items that are only in-stock because we couldn’t sell them off (or intend to get rid off once they do sell).

The Chart

Attrition Rate of Board Games Released

Analysis

If you look at products that we ‘cherry picked’ from 2006 backwards, you’ll see that even though these products were in-demand when we launched in 2007; many have now been dropped from inventory. If you look only at 2007, the year when we started adding products based off what we guessed could sell, that’s 15% or so and likely to continue to drop as demand wanes.   Whether it’s because the product is no longer available or because the product no longer has demand, about 15 – 20% of products released a year manage to have any staying power.  Within that, probably only 2 or 3 products are consistently good sellers (selling more than 1 copy a year).

Secondly, my concerns about a spike in products seems justified.  There’s a huge spike in the amount of products added in the last 3 years (we are only 7 months in for 2013 with the slew of GenCon releases still to be added!).   From bringing in 521 products in 2010 in-total, we now have 476 products already in-stock for 2013 and more than 600 added for the year.  Just using 2012 numbers, that’s a 57% growth in products.  Now, mind you – we’ve added RPGs and miniatures to the site since then; but most miniatures don’t have a year (model years just don’t make sense to add) and our RPG selection while large was also backdated in some cases (e.g. Pathfinder modules that were released before we started adding the line).   It’s also worthwhile to note that these aren’t even all the products available – just the one’s we’ve picked to add to the site / bring-in / sell.

Thirdly, the ‘demand’ for products takes a steep fall within 1 year.  We drop 50% of products we bring in within 1 year, 60% in 2 years and within 3 75% of all products are dropped.  As a publisher, if you haven’t sold off a significant % of your products in a year, you should seriously be considering adjusting your price / having sales because by year 3, you’re not likely to be able to sell it at all.

Curiously, this is by % so in 2007 we have 32 SKUs we feel are wortwhile.  For 2008, we have 68 SKUs and 2009 we have 127.  If we expect that in 2 years time to see roughly the same number of SKUs being worthwhile, we’d see about a 75% drop in SKUs or us dropping over 90 items.

Limitations of the Data

Firstly and most importantly, while I’ve tried to clean the data; I have to admit I didn’t spend a whole lot of time doing it. I’d guess the % numbers used could be 2 – 3% higher / lower easily.

Secondly, the increasing number of SKUs added and sold can be attributed to:

  • our increasing number of RPGs & miniatures
  • the increasing size of the market
  • the increasing size of our business (i.e. our ability to bring in more stock)
  • the necessity to keep whole lines in-stock (e.g. LCG products, minis, etc)

Thirdly, this data is a snapshot in time. It’d be really useful to see the changes over-time which this cannot provide unfortunately. Perhaps next year, since I have the datasets saved now.

Lastly, some might want to draw conclusions that the ‘quality’ of product has gotten better since our % of items and raw count of items are higher than in previous years.  I’d be hesistant about drawing that conclusion – it’s too early to tell and moreover, this does not show turn rates; just whether we have an item in-stock.  In addition, we often keep products in-stock that might sell 1