Asmodee to acquire F2Z Entertainment

The Great AcquirerSo it looks like F2Z Entertainment is about to be purchased by Asmodee.   For those of you who don’t know, F2Z owns Z-Man Games & Plaid Hat Games, which means they own the IP for Pandemic, Mice and Mystics and Dead of Winter.  In addition, they have the rights for Carcassonne in English & French and the french Catan as well as distributing a ton of Asmodee games in Canada as well a a bunch of other things.

As many of you know, I’ve written about the exclusive arrangement with F2Z that came into play a few years ago. Let’s be clear, distribution in Canada in general is significantly more expensive than the US. Our costs of FFG games from Lion Rampant is at least 15 – 20% higher than it was when we purchased from the US directly so it’s not just a case of F2Z. It’s a systemic problem.

With the acquisition, I don’t know if it will improve.  There are a few scenarios that are likely to play out, in order of short to long-term:

  • Once the acquisition is completed, I don’t expect any major changes for a few months.
  • At some point in the 6 months after the acquisition, I expect there to be a MAP program to be put into place just like the FFG program.
  • I also expect a number of new reprints of good selling games will begin production, so expect there to be a significant increase in-stock for these items in 6 – 9 months.
  • Distribution via F2Z might actually shut down in the next few years as contracts expire and Asmodee moves to using distributors completely, reducing their repetitive cost of managing both a distribution and retail arm at the same time.  This might bring actually have the advantage of providing more funds/ need for opening a 2nd warehouse in the West which would lower our costs.

Outside of that, I expect everything else to be business as usual.  It’s unlikely Asmodee will try to undertake the same kinds of policies that they’ve taken in the US (i.e. restricting sales of products to only a few online retailers) due to our differing laws, but you never know.

Overall, I’m actually cautiously optimistic that this might be good for us in Canada.  In the long, long term there’s some concern that Asmodee will use it’s new leadership position to drive margins even further down, but I do not expect that to happen anytime soon.