Tarred with the same brush (Distribution Issues)

tar_brushA day after we did our post about distribution challenges in the gaming industry, we receive news that PSI has now informed their US distributors not to sell to online only physical stores.  If you don’t know, PSI does the distribution for nearly 30% of the industry (most everyone who isn’t gobbled up by Asmodee like Steve Jackson Games, Arcane Wonders, Catalyst Games, Stronghold Games, Indie Boards & Cards and more).  This is the same day that a post on Reddit titled “My local game store smells so bad that I don’t want to go in” hits 852 upvotes and generates a ton of conversations.

PSI (potentially at the pushing of it’s publishers, potentially by themselves) decided that game stores that reek so bad that potential customers refuse to go in are better ambassadors for the game trade than we are.

Hyperbolic much? Maybe, but since we seem to be tarred with the same brush, why don’t I use it on all B&M stores? No fair, but then who is being fair or reasonable here anyway?

Let’s be clear – there is an issue in the industry where board game prices in particular have hit a point where many B&M stores are reducing or even removing their support of the category beyond fast-selling staples.  There are a lot of reasons bandied around but the reasons that get spoken about are:

  • Alpha gamers picking up the ‘hottest new games’ from Kickstarter releases direct
  • Online discounts on average at 30-40% off MSRP.
  • Mass market businesses poaching gateway gamers from B&M stores (who now can’t / don’t have the chance to convert these customers like they used to).

Here’s the thing.  If you look at the above issues, 2 of 3 of those problems are created / supported by publishers because it works very well for them.  Kickstarter allows them to launch more games with less capital and make more money.  Mass Market sales allows them to generate more sales with a much, much bigger footprint than probably the entire B&M store industry.

That means online discounts (and online discounters) are the only people they will go after to look like they are doing something.   There are numerous policies coming into play to stop this.  In the US, ANA decided to just restrict sales to a few online stores.  In Canada, some have gone with a MAP program (even if it is technically illegal).

PSI’s strategy is to restrict it to B&M stores only.  However, that’s not going to work.  Most of the large players in the online world are B&M and online, so it wouldn’t stop them from purchasing.  Worst, half (at least!) of the problems come direct from B&M stores who find themselves with too much product and are just dumping the product.  Solutions like this are more PR than actual solutions, intended to appease than fix the real issues.  Mostly because the real issues are either extremely expensive to fix or because, perhaps, they aren’t fixable.

Distribution Challenges for the Gaming Industry in 2016

My initial title for this post was ‘market failures’ but I realised that that wasn’t entirely accurate, even if it is a better sounding title.  What I wanted to talk about was the increasing fragmentation of the market and the complicating of the supply chain that we are seeing.

Vector illustration of red exclusive stamp on white background
Vector illustration of red exclusive stamp on white background

Exclusive Distribution & Monopolies

Exclusive distribution agreements aren’t new, I’ve written about them previously.  Right now, the vast majority of our products (a good 70% of game sales I’d say) are under exclusive distribution agreements.  Our biggest problem with exclusive agreements is the fact that it can be often difficult to locate who has the exclusive agreement in a country and just as importantly, be able to purchase the product in sufficient quantity to make it worthwhile.  A few great examples?

  • Qwirkle is the only game that sells for us from their distributor in Canada.
  • Celestia and Haru Ichiban are carried by Le Valet who at least have some other ‘good’ games, albeit at a higher markup

As many of you know, shipping in Canada is expensive.  Most places cost us at least $30-40 to ship a parcel at any ‘size’, sometimes much more.  Excluding any minimum’s that a publisher might have (and some sell by case quantities only!), that means to keep shipping cost at only 5% of an order, we’d need to put a $600 order with the publisher.  However, many of these publishers have maybe 5 to 6 items (sometimes even less!) which would sell in our business.  When this happens, we often end up deciding to either / or /and :

  • restock very, very slowly
  • not carry the product / product line
  • increase the price of the product to save on our margin

Geographic Boundaries

Geographic boundary restrictions (essentially stopping us from purchasing from the USA) is another extremely frustrating restriction.  It used to be that we could purchase almost our entire catalog from the US.  Over the years, it’s now slipped to about 30% of the gaming catalog.  This can often lead to some extremely frustrating instances such as:

  • Monikers which signed an exclusive agreement with On the Right Track. Who don’t carry the expansion but we can’t purchase the expansion as the publisher can’t sell it to us due to geographic restrictions.
  • Forbidden Island whose US MSRP is $19.  The lowest Canadian price we can get from a wholesaler? CAD$18.

Non-Gaming Distributors

This one amuses me and frustrates me.  For a while, CV was only purchasable from Pierre Belvedere as they had an exclsusive agreement for it in Canada.  Their main business? Selling calendars from what I recall and various kitchen ware items.  They were a distributor, but there was literally nothing else that was worth buying from them.

We recently had a request from Raincoast Books to buy Osprey Games from them. At least, in this case, they are in Vancouver so we’d save on shipping; but really? Again, see above about hitting minimums and shipping costs for why we generally try to stay away from this.  When a game ends up with a non-gaming distributor, it often becomes dead to us because there’s no way to hit a minimum threshold.

Direct from Publisher

I don’t categorise direct from publisher sales as onerous just by existing, mostly because in many cases, these publishers might not have a choice.  Unable to get into ‘normal’ distribution, they’ve decided to sell direct to retailers who are interested.  What I do find frustrating are publishers who don’t understand the normal discount thresholds for sales.  A recent trend has been for publishers to offer discounts of 25-30% off MSRP and charge for shipping.  At those levels, not surprisingly, most retailers would not bother carrying these products.  If a game is selling at $30, then a 30% discount indicates a gross profit of $9. Add in shipping cost, our gateway processing fees and the time taken to handle the order and we barely make anything on such an order.  No surprise that in those cases, we often decide to not carry those products at all.

The current discount rates seem to vary between 45-50% with some particularly aggressive groups as low as 40%.  Not surprisingly, most retailers don’t even both with those at 40% so if you are offering discount rates at 30%, expect that we won’t be purchasing from you at all unless you hold an extremely, extremely in-demand game (see Cards Against Humanity).

Direct to Consumer Sales

Firstly, let’s be clear – a publisher has the right to decide who to sell to or not.  If a publisher decides to go direct to consumer (via Amazon and their own sites) or Kickstarter only, that’s their choice.  It’s not our area to decide their business model.  In fact, when you have a product that is in such demand, it makes sense to keep more of the profit for yourselves.

However, there are numerous publishers who don’t just sell direct to consumers exclusively, they also sell it at a discount from their own MSRP.  Tasty Minstrel Games is an example of a publisher whose games we have had to cut back on significantly due to regular periods of them running regular sales on their own products. Kickstarter’s that roll previous games into the current promotion fall into the same annoyance area if they provide a discount on those games.  If they don’t, it’s not a huge problem normally.

Big Box Store Exclusives

I doubt I have to expand on this much.  The major issue about such exclusives is the perception that it creates that we aren’t ‘real’ stores because we don’t carry X.  When the question becomes ‘Why don’t you have X’, and our answer is ‘because they won’t sell it to us’, it rarely ends up being a good conversation.

 

Over the years, we’ve grown the number of distributors we’ve had to work with from a small 4 distributors to now, over 12+ major distributors who we order from once a quarter.  That’s not including the occasionally publishers who we order a single game from.  This business has grown in complexity significantly it seems and I sometimes wonder how someone who is new to the business keeps up.  At least we’ve had a few years worth of experience to help us.

The Distribution Chain

Interestingly enough, as much as I complain about the distribution chain in the game trade, developing Fortress Geek as also shown what an industry without a few major distributors is like – and let me tell you, it’s not pretty.

The Distribution Chain in Gaming

Let’s talk about what distributors do.  They are clearing houses for our favorite games, the places where publishers sell boxes / cartons / etc of games and who then consolidate and sell these games to us.  The major advantages for a retailer of a game distributor is the ability to consolidate their orders and for the distributors to ‘break’ cases, allowing gamers to buy smaller quantities of each game.  As I’ve written before, there are numerous other reasons but this consolidation and breaking of games makes a huge difference in how easy it is to run such a store.

Right now, in the US there are about 2 major distributors and another 3 to 4 medium sized distributors.  In Canada, there is 1 major distributor and another 3 or so smaller distributors.  To give a context of size, the major distributor in Canada is still smaller than most of the medium distributors in the US.

This is not a huge number of distributors, but it is enough to ensure that there is a decent amount of competition in the industry.

Now let’s take a look at another example in the general ‘Geek’ product world.

The Distribution Chain in the ‘Geek’ World

Let’s be clear here, when we say ‘geek’; it encompasses a lot – from figurines to collectibles to toys to t-shirts and apparel.  As such, in many ways; the entire concept of a single distributor who could cover all this is unlikely.  However, there are 2 major players in the market (Diamond who supply all the Comics being one of them).  These distributors however are pretty much oligopolies (and in Diamond’s case for comics a monopoly) and as such are able to dictate pricing, markup and quantities to a significant degree.  As such, they often do not break-up cases and if they do, margins are painfully low.

That is, if you can get the items you want.  A significant number of products can only be purchased direct from the suppliers themselves.  This of course creates a whole host of problems:

  • Minimum orders at each supplier
  • Lack of transparency of stock levels (many don’t have a method to view current stock levels)
  • Significantly increased number of supplier contacts and ensuing paperwork
  • Licensing & verification issues
  • Increased length of restocks

It’s no wonder that, if you look at the number of generic ‘geek’ stores in Canada; there just aren’t that many.  It’s extremely difficult to run such a store as we are finding out – its extremely difficult to go broad and deep as it requires a significant capital outlay.  In many cases, we have to stock multiple copies of an item even before we know if it’ll sell.

So while publishers and retailers might complain about the distribution chain (and yeah, there are issues); it’s at least better than the current system evidenced in the ‘geek’ world.

Too Many Games!

We’ve been slowly seeing more and more games arrive, more releases as the entire market and Kickstarter come into play.  And I have to say, there’s major disadvantages to this flood of games that keep arriving.

More Badness than Ever

It’s safe to say that there are bad games out there.   In fact, there are horrendously broken games and games with themes that are just wrong.  At the end of the day, there are games that for one reason or another slip past whatever gatekeepers there are and are released into the wide world of distribution.

Let’s assume there are 10 bad games in every 100 releases.  Further, let’s say there are 60 meh games (okay, not great, not bad) and 20 good games and another 10 great games.  Now the last 30 games will switch depending on who you ask (what’s good is after all in the eye of the beholder) and maybe even the bottom 20-30 games will vary (i.e. what’s truly horrible to me might be  meh to another).   We’re still talking about a lot of bad games out there; games that almost everyone can agree just aren’t that great.  Obviously the numbers are made up, but the idea holds true.

Now, if for some reason more capital is injected into the industry – more publishers set up shop, Kickstarter gets even more popular, etc. Let’s say the ratio of good to bad games stays the same.

The end result? There’s even more bad games to wade through than ever.  The probability of you finding those 10 great games suddenly drops off, because you now have to look through even more games (in sheer volume).

Don’t Blink

I’ve talked about the lie of infinite shelf space.  Assume that we want to get as many of those great, good and mediocre games as we can onto the shelves because we know that will sell.  Now, if a 100 games release every month, we need to shift those games ever faster because we’ve now got to find shelf space for those 70 games we’ll bring in next month.

So what happens? We shift some older stock off the list – we say goodbye to Louis XIV, El Grande, Princes of Florence, classics in their own right.  This is happening right here, right now.  Mediocore games, marginally good games, all of them come in and shift off the shelves ever faster because we have to find space for the next new game.  So don’t blink, those games are gone.

Why do you care? Well, perhaps a good game that is good to most might be great for you.  Maybe it’s the perfect game for you and your group.  And you’ll never find it, because it’s gone.

Boom to Bust in 60 Seconds

Think it’s bad for you? Think about how bad it gets for publishers.  Their window of profitability gets cut ever shorter with this.  They need to start making back their funds in ever shorter periods as retailers are forced to rotate stock out.  Sure, Kickstarter might pre-sell a ton of their games but then the question becomes how much more should they print? If your average Kickstarter does 1000 games pre-sold, do the publishers just print 1000 games or 2000? Those last 1000 games have to be sold somewhere – and their window in the retailer’s shelf is ever shorter.

Eventually, publishers might cut down on their print runs further; printing maybe only a few hundred copies more than their Kickstarter numbers because they can’t afford to take the risk of sales through normal retail.  If that’s the case, then games become more expensive (smaller print runs = higher cost) and disappear from shelves ever faster; with reprints not available.

Lower Profits, Lower Service

Publishers and retailers suddenly have less interest in any one game.  If you know you can only sell a 1000 copies (most of it through Kickstarter); then if you want to make a profit you need to pump out games at a faster rate as a publisher.  That means less playtesting, less Q&A when printing.  That means any one single game is less important than making sure each new game gets out faster and that poential errors can be glossed over faster since everyone’s attention span is less.

For retailers, you can’t learn 100 games every month.  So games become commodities, things that come and go.  You can’t provide as good a service because you don’t know the games that well.  You can’t play every game, you can’t even play 10% of those games.

 It Ain’t Over

I’m not saying it’s all bad and I doubt my posts or opinions will change anything.  However, I do think it behooves us all to realise that there are major disadvantages to this move to bypass gatekeepers, to the crowd-funding of games and the increasing number of games arriving.

 

Game Salute, Publishers & Online Stores

For those of you who don’t know, Game Salute is a combined publishing / fulfillment / online store in the states that has been attempting to ‘sweep up’ numerous publishers into their fold.  One of the most controversial aspects of their system is their Game Salute Exclusive program.

Game Salute Exclusive

The Game Salute Exclusive program allows publishers (at their request) to restrict their sales to B&M only stores and online through Game Salute’s webstore at full MSRP.  They thus do not sell to any online board game stores like us.  While technically this is restricted to only publishers who request to be on their Exclusive program, if you are with Game Salute you are exclusive.  Game Salute makes no attempt to differentiate between exclusive and non-exclusive partners and in-fact are incentivised to not clarify this and won’t.  This happened to Tasty Minstrel / Lions Rampant and Canadian sales as we found out a few months and numerous e-mails ago.

Why do they do this? Simply because Game Salute’s goal is to:

  • protect B&M stores (probably because one of the founders is a B&M store owner)
  • generate as much profit as possible.

Obviously, this is a rather contradictory pair of goals when you include Kickstarter support in this; but at the end of the day Game Salute is offering a service.  It’s publishers who decide to go with the program / Game Salute.

The Publisher’s View

Having read some posts / comments on this, the financial reasoning for these restrictions seem to come down to this:

  • Online stores discount games, reducing the incentive for B&M stores to carry a product
  • By selling direct at MSRP, the publisher gains the most profit possible from customers who purchase online
  • As all products are at MSRP, the incentive is higher for B&M stores to carry a game, thus increasing overall reach and thus sales for the publisher

Now, publisher’s selling direct is not new.  Neither is the attempt to restrict sales online (see Wizards of the Coast and Magic, D&D and of course Games Workshop).  What Game Salute and these publishers are doing isn’t so much new as more extensive – at least in terms of number of games if not $ of sales.

Tradeoffs & Assumptions

There are some base assumptions involved here that roll into the tradeoffs.  These assumptions include:

  • The steepness of the demand curve

As prices go up, the number of customers who will purchase a game go down.  The true question is, at what rate does this happen? Unfortunately, the data on this is either very low or non-existent

  • The Tipping Point (or lack of) for demand

In the same vein, is there a tipping point where a game demand increases exponentially? As more games reach the hands of gamers, is there a point where demand due to buzz (ratings, reviews, word of mouth, etc) reaches a point where your demand curve changes dramatically?

  • The degree of substitution between products

If your product is no longer available at online retailers; to what extent will customers then search for your product instead of substituting for another? Again, this is an interesting question and it varies I find depending on the specific game.  Some (e.g. Eclipse) are almost impossible to substitute, while other games (e.g. Cuba, Resident Evil Deck Building) are much easier.

  • The degree of substitution between retailers

To what extent are the customers at a specific retailer (online or B&M) ‘theirs’.  If a customer can’t find a game at their favorite retailer, is she going to purchase from another? Can she? How much more trouble / energy will a customer expand to find your game at another retailer, especially if it’s one he dislikes?

  • The degree of free shelf space at retailers

I’ve discussed the lie of the infinite shelf space, the conceit that every game will find itself onto the shelves of retailers.  This is, as mentioned, a lie – there’s just no way for this to happen except perhaps for the very largest retailers.  The question then is to what extent stocking decisions at a retail store are based on availability of the game in other locations.

Numbers, What Numbers?

At the end of the day, we all make assumptions because there just aren’t any numbers in this business.  We’re all guessing and hoping what we do works out right.  Sometimes those guesses are educated guesses, others we just stand around and flip a coin on.

As an online store, we don’t believe that the publishers going with Game Salute are correct.  We feel that publishers are deliberately reducing their sales to a segment of their customers, in the mistaken belief that B&M retailers will then support them in mass.  At the end of the day though, it’s all a guessing game till a publisher (or two or three) release their numbers.

Fear & Loathing Online

As an online game store, it sometimes feels like the entire industry is out to shut you down.  We’re the evil demon in the mists, the boogieman destroying the fabric of the gaming universe.  We are the bad guys.

The Loathing

We’ve had publishers refuse to sell to us, restrict sales of certain items, issue pricing dictates and offer Brick & Mortar (B&M) stores additional retailer incentives. We’ve had distributors refuse to do business with us, or attempt to dictate how we run our business if they do sell to us, or selectively refuse promotions to us because we are an online store.

Other retailers have attempted to get us discredited, refused to talk/work with us in their industry forums and been actively hostile in person.  We’ve even had some predatory marketing practices targeted directly at us.  And the purchasing public can be just as hostile (if not more so) than any of the above.

The Hypocrisy

What gets me is the hypocrisy often shown by the above.  Many of these publishers will sell online & direct themselves and/or sell to big box stores.  They’ll go to Kickstarter (another online sales method) and provide incentives to customers but not provide them to retailers, cutting directly into a retailer’s customer base.  Yet they’ll state in their very next breath that they are all about supporting ‘the gaming industry’.

The public will complain about online retailers, but then refuse to pay more than MSRP or for the space they use to try out games and socialize in B&M stores.  They’ll buy from Amazon, yet continue to talk about ‘supporting local businesses’.  Retailers complain about online stores but then use eBay to get rid of their additional stock or run online stores themselves.

Distributors at least are mostly up-front about their motivations – they just want your money; and often would sell to you if they could.

If There’s One Thing…

Can’t we all just get along? There’s a lot to love in this business, but this aspect of it is just frustrating and disheartening.  Some days, I really do just want to go evil. Then I take a deep breath, tell myself it’s just business and get on with being the best damn game store we can be.

Z-Man Games : 2 Months After

It’s been 2 months since the biggest publisher since Days of Wonder (i.e. Z-Man Games) has gone exclusive on us.  It’s been a rough couple of months in keeping stock for the games; as I’m sure it has been for Filosofia.

The Recap

Z-Man Games announced that they were going exclusive with Alliance in America 2 months ago.  However; they were then barred from selling to Canadian retailers like us forcing us to buy from either Filosofia (Z-Man’s new owner) or a Canadian distributors.

The Effects

As many of you know, we don’t buy from Canadian distributors.  The cost is significantly higher than purchasing from the US and there’s a lot less breadth and width among the Canadian distributors.  That means quite often we’re buying direct from Filosofia.

Here’s a few things that we noticed:

  • a higher cost per game of 3 – 5% due to shipping
  • increasing our minimum stock quantities by about 30% (roughly $1,300 dollars) for Z-Man Games
  • More out-of-stocks for longer periods due to much slower ship times

The biggest issue is the increased costs and the out-of-stocks.  It’s actually hurting our sales and I don’t see this changing.  It’ll be particularly interesting when we come to the new releases for Z-Man since we aren’t likely to be able to restock those games as fast either.  And while I understand this change is probably not something that matters to the publisher since we just aren’t that large a part of the pie; it’s still frustrating for us to not have stock of board games in Canada.

 

Musings on Kickstarter

The introduction of Kickstater to board game publishing over the last year or so has caused some major changes, with a lot of new independent games being published and dispersed.  It’s also caused a lot of consternation among game stores, and for myself.  I’ve been trying to figure out why I dislike the entire system, and what my concerns are about such a program.  So, here we go:

Present Concerns

  1. Additional work: Scanning through and researching all the board games available on Kickstarter just adds another task to an already busy job
  2. Additional capital: I’ve spoken about this before, and it’s a real concern.  Having to find additional non-working capital to purchase these games is an issue.  The delay between payment and delivery creates a significant ROI requirement, which is not helped by…
  3. Lack of Retailer Support: The few times I find a project worth backing, there often isn’t even a Retailer Support level.  So we either have to contact the publisher to create one (and check back if they do — which isn’t even certain!) or we buy at MSRP.
  4. Lack of Online Retailer Support: I’ll add an additional caveat that there seems to be an even higher level of elitism among Kickstarter publishers than among normal publishers with many of the ‘Retailer support’ levels only available to B&M stores.
  5. No recourse: If and when (because there will be a when) a Kickstarter project is never fulfilled, there is no legal recourse.
  6. Varying demand: Of course, you never know if a game is going to be a hit.  However, with the traditional distribution channels, I can hedge my bets by ordering 1 or 2 copies initially.  That’s all that will sell for many games.  With a Kickstarter-backed project, I have to take 4 to 6 copies and then pray that they all sell — knowing that the customers who really wanted the game might have already purchased it themselves through Kickstarter.

Overall, these concerns have made Kickstarter a non-starter on a corporate basis.  I personally still support some projects, but those are my personal funds.

Future Concerns

While I know I lose some sales and some customers to Kickstarter, it’s not a big issue.  It’s a secondary competitor — one that has a leg-up in terms of getting some product faster, but no more dangerous than any other competitor.  At least, presently.  It’s what might happen in the future that concerns me the most.

Scenario 1: Kickstarter is the financing method for publishing all games

If Kickstarter becomes the financing method for all companies (and there are some indications of that with established publishers like Queen Games and Steve Jackson Games using it), then we will see a major change in how business is done.  The concerns then become:

  1. How much of our customer base are we going to lose?
  2. What percentage of games will sell exclusively through Kickstarter / direct distribution?

Greater Risk

Here’s the thing —  as an online store we might actually be more at risk than your general B&M store.  A core group of our customers are avid boardgamers: Gamer Geeks.  These are customers who are looking for the hottest new games, often with the highest amount of bling and exclusivity. Exactly. This is the same group that are most likely to finance a Kickstarter project.  If we lose a significant number of our Gamer Geek customers, we’ll definitely be struggling.

No More Distribution

There is, frankly, a lot to be said about cutting out the middleman.  If a Publisher can sell the game direct to customers through a system like Kickstarter, then their profits increases significantly.  For them it is better, financially, to sell 1/2 as many games directly to customers than the full amount through regular channels.  If you assume most games are priced at about 8 – 10 times the component cost, then the publisher of a $50 game would make approximately $45 per game selling direct, compared to $15.  I’m not including shipping here, which will push the profit from direct sales down somewhat, but you can still see the attraction.

So what’s to stop publishers from blocking all sales to distributors & retailers? If you realise that 80% of all your demand has been soaked up by Kickstarter, why not just sell the rest direct on your own website? Or just not print more than your Kickstarter funding covers and then put up a 2nd Kickstarter for ‘unreached’ demand?  Suddenly, the retailer and distribution chain disappears.

Lower Margins

Here’s another variation on the above: publishers do allow retailers to purchase; however, they reduce the retailer margin.  An example would be the Ogre Kickstarter where the retailer support level was $200 for 3 games  – or about a 33% discount compared to the usual 45%.  That doesn’t sound like much, but most stores only have a profit margin of 3 – 5%.  A reduction of over 12% in their margins would put most of us in the red.

All the above has the potential to create a major disruption in the publishing channel.   And it doesn’t even have to be all publishers. If, say, 50% of the major publishers start doing this, game stores and distributors will be majorly squeezed.

Scenario 2: Balanced Use

The above is a doom-and-gloom scenario.  What’s likely to happen is something less extreme.  Publishers might use Kickstarter for new and/or risky games where they aren’t certain of their return.  For reprints and classics, they will likely distribute through their normal channels, using the funds from their first print run to do so.

This likely means that retailers and distributors will see reduced sales of new games, and will be much more likely to stick to classic games and bestsellers.  When they do pick up a Kickstarter game, it’ll be a minimal number, since they will know it’s ‘sold through’ already.

Hmmm… maybe we should ask BGG to add a new category to all games: Kickstarted: Yes / No.

In the end, I expect at the retail level we’ll see a lot more breadth of games (more games) but much less depth (numbers printed).  Publishers will likely do smaller print runs in an attempt to ensure they get their Kickstarted games funded, and a large number will be pre-sold.  Retailers will thus have much fewer copies to purchase, and those that do arrive will disappear really fast if they are good games (see Belfort as an example – note, Belfort wasn’t a Kickstarted project as clarified by Michael below) .

I’d also expect there to be much faster discounting of games in this scenario, as retailers attempt to move products before they go stale.  If Kickstarter increases the total number of games by say, 30%, an already busy release schedule becomes even more packed and retailer inventory budgets get squeezed further.  This scenario would be a change, but not a major change.

Scenario 3: A Vicious Cycle

Another possibility is a slow decrease in support for Kickstarter projects in general, and board games in particular.  I would not be surprised if game stores start becoming much more focused on casual gamers:  customers who aren’t as interested in new games, and whose gaming budget might be only $100 – 200 per year (instead of per month), and who are thus quite happy to play / buy the bestsellers of yesteryear.  When it comes to serious gamers, the focus shifts from supporting board games to supporting CCGs and Miniatures even further.  Both of these categories are significantly harder to fund via Kickstarter due to their higher production costs and need for ongoing expansions.

If the above scenario plays out, we might even see the following vicious cycle occur:

Publishers put games on Kickstarter -> retailers buy fewer Kickstarted games -> publishers aren’t able to sell as many games, and are increasingly reliant on Kickstarter pre-orders, adding more new games to Kickstarter -> retailers further reduce support of board games.

If that happens, I’d expect that only a few online stores who either (a) bite the bullet and support Kickstarter projects or (b) lower their pricing significantly to make up for the lost Kickstarter ‘perks’ will stock a significant breadth of board games.  What you see on the regular B&M store shelves will increasingly be the current winners — FFG, DOW, SJG, Rio Grande, etc. — and getting on those shelves will become even more difficult for independent designers, if not impossible.

Final Words

Of course, all of this is dependent on the Kickstarter bubble not blowing up completely as bad products outweigh good ones and customers walk away from supporting the majority of products. If this happens, then not much will end up changing in the end.