For those of you who haven’t heard, Asmodee has made a large pair of announcements. A summary of the first one is here and the second (clarifying) one here. Today, ICv2 has an interview that clarified matters further. In short, Asmodee is consolidating DOW, FFG and Asmodee operations in North America as Asmodee North America as well as restricting their American distributors to 5 distributors and restricting online sales to retailers of “significant scale, unique service, or other exceptional differentiation”. They have also clarified that B&M stores and online retailers will be provided different discount levels. It should be noted that nothing here affects Canada (yet) as Canadian stores are not under the purview of these changes.
Let me preface this all by saying that my analysis is as a retailer. I don’t have any special knowledge of anything that has happened, just an analysis of what is happening.
Why Are They Doing This?
At a guess, I believe Asmodee has decided that they need to support the development of their Living Card Games and miniature game lines in X-Wing and Armada via brick & mortar stores. By consolidating their distribution in a few distributors, they are able to get access to more data while keeping most retailers happy by keeping the ‘spread’ of distributors wide. Certainly, it’s unlikely that any serious retailer in the USA doesn’t have access to at least 2 if not 3 of these companies at the very least.
It’s not a bad move at all. Miniature games (and LCGs to a (much?)smaller extent) require the introduction of new and interesting players regularly to keep the game ‘alive’. While there are numerous ways to develop these gaming markets (gaming clubs, game cafes, etc.); game stores are certainly the largest and most easily located group. As I’m sure the executives at Asmodeee and FFG have heard again and again, B&M stores do not necessarily want to support these games because their games are being discounted online and as such, the players aren’t bringing any revenue to the stores. How much of this is an excuse will be something we shall have to see.
It also sounds like B&M stores are seeing a reduction in the discount that they can receive (hearsay says it’s 45% normal with an additional 3% based off various other incentives). This is different from the starting 45% to 48% maximum that you can get for FFG and definitely a lot worst for DOW & ASM (by 2 to 5%). At least, it’s worst than when we used to buy it in the States (again, my data on this may be old). There has been no indication of what the rate will be for online retailers. I would assume that the discount level for online retailers will be in the 30-35% range. In other words, Asmodee is increasing their profits from online sales significantly, especially since they are limiting online sales to direct sales only. That’s another 10% that they are getting that they no longer have to pay distributors.
What’s it mean for Canada?
None of this of course affects Canada immediately. However, there can be no doubt that they will put some of this in-play in Canada sooner rather than later. I’d expect an announcement in mid-July of 2016. One thing that Asmodee (and it’s distributors) will have to be very careful about is that our laws are rather different from the States and differentiation (especially of prices sold) based off channel of sales might actually not be legally viable. I am not a lawyer, so I’ll leave it to the lawyers to argue that one out. Or in this case, the Competition Tribune I guess. Either way, it’ll be years before they make a judgement which means we’ll be waiting years to
My Personal Thoughts
What do I think about this? Overall, I’m not particularly surprised by this move. The continuing consolidation of the industry and the move to exclusivity has been something that has happened in the last 8 years. The increasingly hostile environment to online businesses is not particularly new either.
A lot of it is a mis-perception or a disagreement about the value of online retail provides to customer, over and above a lower price. That’s not just the only things we do though as an online retailer to add value. I’d also add that we do work on generating demand in our own way – from e-mail lists and blog updates to video reviews and social media out-reach and recommendations, those all target our customers to drive additional demand. On a pure customer service basis, just like B&M stores, we answer numerous questions from customers asking us what games to buy next. That all this happens via e-mail and phone, in a way that can’t be seen by a publisher doesn’t mean that it doesn’t happen.
I’ve spoken about the lie about infinite shelf-space, and more, the fact that most game stores just aren’t going to support board games anywhere near the level that a specialised online retailer will. Yes, B&M stores may do demos – but the vast majority of game stores provide at most a single-night for board games a week. 1 gaming night a week to demo 1 game each week works out to 4 new games demoed a month. This is compared to a release schedule of over 100 new games each month easily. Yet, the fact that we will take a chance and stock numerous games from small independent publishers to FFGs entire line (literally, we’ve carried every game they’ve ever released since 2010 at least though we’ve obviously discontinued sales of some of those games due to lack of demand) means nothing. How many B&M stores brought in Winter Tales?
Which leads me to a point about demo’s. As much as Asmodee North America (ANA) says it wants to support B&M stores who provide “local presence, instant product availability, new customer generation, and crucially, in-store gaming events, demonstrations, tournaments, and organized play facilitation“, the fact stands that the best way to ensure that would be to have equal discount levels (50%) as most other publishers and to provide free demo games and demo material (ala Wizards of the Coast & Games Workshop) to stores that request it. This would be much more targeted, much more useful rather than a decreased discount level and paid organised play material.
Deception: Murder in Hong Kong
Dungeon Saga: Dwarf King’s Quest
Eldritch Horror: Under The Pyramids
Flames of War: Shattered Battlefields
Force of Will CCG: Booster A2 Alice Cluster – the Twilight Wanderer
Force of Will CCG: the Twilight Wanderer Playmat
Helionox: The Last Sunset
Iron Kingdoms: Unleased – Game Master Toolkit
Dixit: The Lord of the Rings LCG: The Dread Realm Adventure Pack
Star Wars X-Wing: T-70 X-Wing Expansion Pack
Star Wars X-Wing: TIE/fo Fighter Expansion Pack
Ticket to Ride: Map Collection Volume 5 – United Kingdoms
Viticulture (Essential Edition)
A Game of Thrones LCG: Taking the Black Chapter Pack (2nd Edition)
Blood Rage: 5th Player Expansion
Blood Rage: Gods of Asgard Expansion
Blood Rage: Mystics of Midgard Expansion
Bottom of the 9th: Big League Support
Bottom of the 9th
Iron Kingdoms: Unleashed RPG – Skorne Empire
Mistfall: Valskyrr – Campaign System
Twilight Struggle Deluxe Edition (Restock)
The U.S. Civil War
The Big Book of Madness
Warhammer 40,000: Conquest LCG – Decree of Ruin War Pack
Marketing is a strange thing where what might look like a highly successful marketing program is actually a poor campaign. At the end of the day, Marketing is meant to drive revenue for the vast majority of businesses. Yet, some highly successful marketing campaigns like the Old Spice advertorial fail to generate increases in revenue.
On our side, we see the same thing with some of our marketing programs. The webpage with the highest number of visitors (not including our homepage) is our Top 10 Fantasy Games list. Total number of sales that we have generated from that page – 0.
On the opposite end, we have our Game Buyer’s Guide Flowchart that we created a few years ago and later updated to our Game Wizard Application. We do not get as many visitors to each of those pages (about a quarter); yet we generate a consistent number of sales from visitors those pages.
Why the difference? It’s a matter of targetting and the right markets. Individuals who find our guides actually are interested in purchasing, while those looking to read our Top 10 list are likely just browsing. Even the terminology used ‘Fantasy Games’ could evoke a wide range of fans – from Lord of the Rings to Harry Potter to actual boardgamers.
At the end of the day, traffic and word of mouth might seem nice; but if it doesn’t actually drive sales, it’s a waste of time and effort
This Christmas, we are trying something entirely new for us which is repurchasing and reselling games that are out of stock / have limited stock in Canada. Due to the numerous exclsuvie distributorships and the increasing popularity of board games, some ‘hot’ games have become extremely scarce very quickly. For example:
7 Wonders: Duel – we received about 25% of our pre-order (which had been sent in months ago).
Pandemic: Legacy – Just a really popular game that F2Z hasn’t managed to keep in-stock.
With games like these, rather than not selling the games at all, we have been picking them up from secondary distribution sources (i.e. other retailers) and reselling them to customers. Obviously, this means that these games are being purchased at a cost significantly higher than what we would normally see if we picked them up via distribution and we have to then pass on the costs to you, the customer.
It also is why in many cases, our stock of these products is limited and the prices so high. We’ll see how this works out this year, but it’ll be interesting for sure.