## The Spiel (Essen) 2014 – Pre-Orders?

We are looking at trying out something new this year – specifically, we are looking to go to The Spiel (Essen) 2014.  We looked at this once before and just couldn’t see how to make the maths work back then (over 4 years ago); but we are hoping that we’ve now grown sufficiently that we have the customer base to make it work.  On that note, we have a few questions for our customers.

## Population Density & Customers

If you’ve seen the statistics about the industry before then you know that the average revenue figure (which includes some huge stores) is about \$320,000.  If you split that evenly across the year, you are assuming a \$26,000 in revenue a month.  If you assume that Nov is twice as good and December 3 times as a normal month, than an ‘average’ month would be \$21,333.   So if you figure that you get an average sale of let’s say \$50, you are assuming 426 sales a month or approximately 14 sales a day.  Now, obviously there’s a lot of fudging here (Magic players buy much smaller dollar value but a lot more often, board gamers buy much higher, etc) but you get the idea.

So, let’s say you do need to get 426 people to buy from you and you are an okay salesman; that is, you convert 1 in 10 walk-ins.  That means you need 140 people to come into your store a day or 4260 people a month.  Now, if your population is 50,000 you need 8.5% of the entire town to come in every month just so that you can make your daily bread.

Now, using the US Census age demographics and taking people between 15 to 55 (figuring they are your typical customer group). you have 57% of the population that might be your customers.  That works out to be 28,500 potential customers.  So suddenly, that % of the population has changed to 17% of the group.

That’s a frightening statistic isn’t it?  It’s horrible, but there are ways to change that of course.  The variables involved are:

• Target population number (population density)
• Conversion rate (how many you manage to convert into customers)
• Average sale (if you can sell more, the better of course).

None of this is really true of course – game stores are lucky in that they can create ‘loyal’ customers, who come back all the time.  True fans as some people call them – individuals who will make up a large portion of these sales, leaving the rest to random walk-in’s.  Still, it’s a good idea ot think about what your own conversion rates are.

## Organized Play at Starlit Citadel

With the success of our Open Houses and our ongoing Android: Netrunner gaming night, we’ve decided to further expand our on-site events to include Organized Play. Our first such event will be an Android: Netrunner Draft Tournament on July 26th, and we’re planning to hold events for more games in the future.

## What is Organized Play?

Organized play events are opportunities for players who own a particular game to compete against one another in a structured, friendly environment. While exact competition format will vary from event to event, the basic structure is the same: players pay a small sign-up fee (usually around \$5, if no special materials are required for the event), and bring their own game set. They play a series of games against other players in a tournament that lasts an evening or an afternoon, and generally does not involve player elimination. The goal is to give everyone a chance to play against a broad range of opponents. At the end of the event, all participants receive a limited-edition card or other game expansion, and the top 2 or 3 finishers are awarded larger prizes.

## What games will you be offering?

At the moment, we have access to organized play materials for the following games:

• Android: Netrunner
• Star Wars: X-Wing Miniatures Game
• Star Realms
• Marvel Dice Masters: Avengers vs X-Men

We’ll be running events at each of our upcoming Open Houses, and may also run regular evening events for games with a lot of interested players. Please comment below to let us know what events you’d be most interested in attending (you can choose more than one), and we’ll start planning new events for the most popular choices.

## Industry Report 5 (2011 Numbers)

I just checked into Statistics Canada and their 2011 numbers are finally out.  I thought I’d share some of my thoughts on looking it over, comparing what I have from the 2008 numbers to the new 2011 numbers.  This is a 3 year difference, so this should be interesting:

Interestingly, the number of businesses (or businesses reporting) are down from 1,413 to 1,329.  That’s a drop of about 6%.  No idea if this is just a reporting issue or a drop in industry size, though at a guess it’s a reporting issue.

### 2) Better revenue

Average revenue has jumped 330.5k from 320.3k.  I don’t know if this is just a reporting issue or just an overall increase, though from experience I’d say overall.  That’s an increase in average revenue of 3.2% , which if you think of it over 3 years is barely a 1% increase.  That’s horrible because it doesn’t even keep up with inflation.

Where you see the biggest gains seem to be the top quartile of all stores, where revenue jumped by over \$40k compared to the 2008 numbers.  In fact, for the bottom half of the stores, the average revenue was actually lower than 2008.  I’d guess that it’s because more new stores are reporting numbers rather than that old stores are failing, but again; complete guess.

### 3) Better Margins & Profitability

Margins have improved overall, from 41.8 to 42.3%.  Profitability bounced up to 3.2% overall which is a huge increase from the 2.6%.   Again, remember these numbers are averages.  There certainly were a lot more profitable businesses in 2011 – 69% reporting were profitable compared to the 60% in 2008.  Of those profitable businesses, in the Top 50% they average a net profit of 40.1k

### 4) Salaries

I’m always interested in salaries.  Taking a look at the 3rd and 4th quartiles, wages made up 14% and 18.5% of the businesses expenses.  Taking net profit and wages together, a business owner who worked by himself could assume to make (on average) \$38.6k and \$202.7k respectively.  Okay, that last number just isn’t happening because an average business in the 4th quartile is making \$947.3k in revenue and no single person could handle that much work.  Still, it sure does show the jump between the amount that is spent on salaries between the 3rd and 4th quartiles.

I should also add, that you shouldn’t believe the numbers of the Bottom 50 – their losses are significantly more than reported.  For example, the salaries and wages reported for the bottom 50 are reported on average to be \$5.7k for the year.  That’s no way that’s includes the salary paid for to the owners, so their net ‘profit’ of \$4.7k is probably paid to the owners and/or they are unpaid labour.

### 5) Marketing

No surprise as usual that marketing sits at the 1.9% range.  It’s never really moved outside of that band and is about right I would think for this kind of store.

### 6) Rent

Ah, rent.  Outside of COGs and Labour, Rent continues to be the largest expense.  It’s on average 8.5% for the reported industry expenses or about \$28.1k per year.  Of course, that covers a huge range from \$4.1k (or about \$400 a month) to \$75.9k (or \$6.325 a month).  Thankfully, not everyone has to pay Vancouver prices or that \$400 a month would get you a 150 -200 sq ft location – about the size of a large storage location.

### 7) Inventory Turns

Glancing at the opening and closing inventory, turns are very healthy on the average at 4.2.  Of course, those numbers are very different for the bottom half which turns at 2.5 times and the top half that are turning inventory 4.5 times.  Of course, the top 50% also have about \$131k in inventory compared to the bottom half’s \$24k.  The usual rule holds true – you need inventory to sell.

### Last Thoughts

Looking at the data, there’s nothing spectacularly different from 2008.  If anything, I’d say the report seems to showcase quite well the difference between the newer small businesses that have opened and the longer, larger, more established businesses.  The more established businesses are doing well but are feeling a squeeze from their expenses (3rd quarter profitable businesses actually reported on average smaller profits than 2008) but a lot more are profitable.  It seems the wealth is spreading around a bit more…

Even among the non-profitable businesses, those businesses were making fewer losses.  Considering this is 2011; I’d say that’s about right from my recollection – we certainly started seeing better revenues and profits around this time.

It’s kind of fun to benchmark ourselves against the players here, though with data being 3 years old it’s not exactly apples-to-apples but it does show our marketing expenses and rent are significantly higher than they should be.  Of course, that’s partly due to our latest move where we went up in size significantly; and it’ll take a while for our revenue to catch up with the space. So, anyone have any thoughts on these numbers?

3)

## Video Review: Eldritch Horror

Today’s review is for the newest globe-spanning Lovecraftian adventure from Fantasy Flight Games, Eldritch Horror.

## The Lower Mainland Game Store Density

I just learnt on Thursday that another game store is opening in the Lower Mainland of BC. By my count, that puts us at about 30 different game & comic stores in the Lower Mainland; not including big box stores that carry games as well. If you look at just the GVRD; it drops down to 28 stores for a population of 2,463,700. That works out to 1 game store per 88,000 people. More interestingly, if you look at just the Greater Vancouver area, you get this distribution:

 Authority Population No. of Game Stores Population / Game Store Burnaby 223,218 6 37,203 New Westminster 65,976 1 65,976 North Vancouver 84,412 0 NA Richmond 190,473 2 95,237 Surrey 468,251 1 468,251 Vancouver 603,502 7 86,215

Common ‘knowledge’ in the industry (from what I recall) puts the number for a viable game store at about 50,000 at a minimum. Numbers jump up and down depending on the type of population (lots of college kids, tourist town, commuter town, etc.) and of course, other minor things like rent, salaries, etc.

So, if you assume that is correct, if I were going to open a store in the Lower Mainland I’d consider either Richmond or Surrey or North Vancouver just from the above data with Burnaby a far last.  Of course, there’s a lot more to take into account – demographics and salaries, transportation and the like but it’s certainly an interesting statistic.   Maybe we should move the offices to Surrey the next time 🙂

## Bestsellers for Q1 & Q2 2014

Thought it might be of interest to everyone. Based of quantity of units sold, here’s out Top 25 Bestselling Items in Canada.

## The GameWizard App – Updated

We just updated the GameWizard App again. Hopefully, everyone has enjoyed using the App because it’s taken a lot of work to get here.

## Background Work

Before we started working on the changes, one thing we really wanted to do was figure out a better way of keeping track of changes.  This was partly because as we developed the app further, we knew we were going to diverge from the Infographic which it was based on.

So, we looked around for software.  Then, realising there was no software that worked; we ended up using a modified spreadsheet. Yup, a spreadsheet is all that we are using to track this… but it did take a while to redo the questions in the spreadsheet.

Once we got the spreadsheet sorted, we had to start adding questions and games.  That meant tracking down the right paths, figuring out the appropriate questions and the appropriate answers.  Again, that takes a while.

## Code Changes

We moved a section for Non-gamers to the first question to make it much more prominent where it was hidden under ‘Strategy Games’.  We cleaned up a section on Science Fiction games to shorten a series of questions about fandoms and then expanded a series of

We also added 20 new games and cleaned up some out of print games so that the app would be more useful.  All in, just coding time; it took another 8 hours to do all this (a lot of it being bug hunting and the initial huge moves).  If you figure it takes about 24 minutes per game changed.  Of course, it isn’t that long – it probably is only about 4 or 5 minutes of actual coding time when we are just adding a new branch – it’s when we are moving entire branches out that things get complicated.

## The Scope

So when we say we added 20 games, what are we talking about? Well, the first program had over 1,300+ lines of code.  These days, we split the program up to do with multiple areas (cacheing, design, etc) and it’s harder to get a line count, but just the code for the games themselves are over 1,700+ lines of code.

In terms of game, we have 132 games now.  So, 20 games is a 15% increase to the number of games available.  To compare though, we have over 1,500+ SKUs (not individual games, games & expansions); so figure 1,100 or so individual games.  Or put another way, we are only 10% of the way to the number of games we have listed on the site.

On the other hand, we aren’t going to recommend all the games available – so we are probably 30 – 40% of the way to where we’d be happy with the app.

## The Question

So, looking at the app, which area do you think we need to expand most desperately? Which questions need more refining to offer more choices and which games should we add to those choices? I know we’re a bit lacking in wargames, but that’s a really tough section as we’re not wargamers.