Why Embracing & Managing Product Launch Failure Is The Key To Success In The Board Games Business

It shouldn’t be news to anyone who has been the board games business for a while that most new games launched don’t stick around very long. Thousands of new games launch each year, and apart from a bit of stock residue most fade away into the distant memory or onto the web pages of Board Game Geek!

Dealing with product launch failure is a fundamental part of the board games business. If you are crestfallen and deflated, if your team are so mortified that they can’t move on and if your company is financially crippled by a single product launch failure then you are doing something wrong! Failure is a frequent visitor in this business, like it or not so you need to aim for the upside scenario while planning for and managing the downside.

Clearly we don’t intend to order ridiculously excessive quantities of stock, but when a game fails to sell off the shelf from the start, and retailers start to revise their forecasts down we can find ourselves looking at a considerable over stock and a suddenly reduced sales forecast.

One of the things we can learn from the major stock market listed companies in our industry is that they are absolutely brutal about managing inventory levels. If new products don’t perform they are exorcised and written off early so that the company can move on into the next sales cycle as efficiently as possible.

Practically speaking, if you are paying $4usd per unit for manufacturing costs, you can probably sell it via closeout and clearance channels for $2 or so (even on a disastrous flop). So in the end, aside from the opportunity cost and the reduced sales forecast you needn’t lose that much.

When launch failure becomes damaging and risky for a company is when they have invested way beyond manageable levels in terms of R&D, tooling and marketing spend. For each and every product, your company should be asking whether they can afford for the launch to fail – if the answer is no, then the product should never go ahead, because otherwise you are gambling not building a successful business. Smaller companies tend to lack the formal greenlight/milestone approval process within their product development that the bigger companies have, and as such they sometimes let things slip through that should have been binned early or end up taking risks by accident that should have been screened out.

Classic disasters include betting the house on a TV advertising campaign when that is not the usual model of the company or listening to retailers demanding massive stock orders on risky and unknown items – these two factors should be managed with extreme caution.

The reality is that most successful board games companies run a portfolio approach, with risk managed across a broad range of products. Understandably when you are starting out you won’t have that, but the sooner you can build a portfolio approach into your operating framework the more likely it is you will succeed over time.

Above all, painful experience from our side suggests that you don’t trust your own product success predictions. We have seen games we thought were rubbish to the core become perennial performers while many clear and obvious ‘winners’ have fallen by the wayside. There are so many uncontrollable factors affecting the success or failure of a new game that you really can’t expect to be right all the time, or even most of the time. Therefore, by presuming that there is a high risk of failure and managing accordingly you are more likely to build a board game business that lasts.

We run a Consultancy business helping board games companies to grow. We have experience of most major board games markets around the world and our team has developed more than 200 board games including versions of classic games like Monopoly, Clue/do, Risk, Game of Life etc. For more information on our services (including our Export sales Consultancy) please just click here: https://www.boardgamebiz.com/game-business-consultancy  

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The Importance Of Board Game Inventors To The Board Games Business

The unsung heroes of the board games business are board game inventors! In so many cases, classic games which are now cultural icons came from the minds of independent or start up inventors before being taken onto a bigger commercial stage by more established board games publishers.

The challenge for board games publishers with highly experienced staff is that there is often a feeling of seen it all before and of doing things a certain way. Creatively speaking, outside inspiration often stretches what a board games company will do and makes the company look at things in a different way.

In some ways board games publishers have the easiest R&D model of nearly any business out there – there is a vast array of tested and honed board game play concepts out there. The average small to medium sized games company will review many hundreds of new concepts each year, bigger companies may review more than a thousand. And from this mighty array of options they can whittle the options down to as few as they can viably launch. That is not to say that there is no work required from that point on – far from it, things need to be tweaked, artwork needs to be developed and any plastic components designed, engineered and manufactured, but nevertheless the pool of creativity available to board game companies is close to unparalleled.

Many games companies hit a rough patch and have a bad year or two, but there can be no excuse that they didn’t have enough ideas to develop! The trick for board game companies is to develop strong filtration systems and processes which can sort the wheat from the chaff. This can take some effort, and every established games company has somewhere along the line turned down a game that became a top seller elsewhere, this is because games publishers can bring in way more concepts than they have time to properly review and it is difficult to predict which games will take off and which will fail spectacularly.

This of course is the main challenge for even professional board game inventors – the high level of competing games concepts and the high quality of many of those concepts makes it hard to place even strong games from originators who really know what they are doing. Therefore, the business model for games inventors is massively stacked with upfront opportunity cost and emotional investment based on faith and love of the game. All this effort and energy needs to be expended well ahead of actually selling anything and making a living. Nobody knows exactly how many board games get published globally each year, but it is in the thousands at least, maybe even ten thousand or more. So, despite heavy competition there is ongoing demand for the output of board game inventors.

For those still unconvinced of the need for or importance of board game inventors in the games business, consider this – all of the following popular and iconic games were created by independent inventors: Monopoly, Clue/do, Trivial Pursuit, Settlers of Catan, Operation, Cranium, Scrabble, Dobble…and many more. So, here’s to those plucky game creators and their glorious output!

We run a Consultancy business helping board games companies to grow. We have experience of most major board games markets around the world and our team has developed more than 200 board games including versions of classic games like Monopoly, Clue/do, Risk, Game of Life etc. For more information on our services (including our Export sales Consultancy) please just click here: https://www.boardgamebiz.com/game-business-consultancy  

Sign up now for our free BoardGameBiz newsletter offering insights, news and analysis of the business of Board Games. We’ll also send you a free copy of our book ’55 Features of Best Selling Board Games’ – just click here to sign up.

How To Find Reliable & Cost-Effective Board Games Manufacturing

If you’re in the Board Games business then you need reliable and cost-effective manufacturing. By far the largest cost you have is the manufacturing cost - generally speaking Board Game manufacturing costs account for around 25-30% of a company’s revenues. So, if you are looking for ways to make a Games company more profitable it logically makes sense to look at the area where spending is highest.

Pricing isn’t everything though, even though it is usually the first concern. If you can’t make your games to meet demand and you lose sales, then your company loses far more than it gains by shaving a couple of points off manufacturing spend.

Nevertheless though, there are several tried and tested ways to reduce manufacturing costs:

1.       Get quotes from multiple suppliers – this is evidently an effective strategy because so many companies use it. With this approach you quote every new Game with a couple of factories in order to ensure you get competitive costing. The drawback with this approach though is that it can be overdone. In the end while there are quite a few Board Games factories out there, Games manufacturing is a finite capability. So, if you routinely make 3 or 4 factories quote for your products and deliver very little business to any of them you will find that they will lose interest in quoting for you and before long you will have nowhere to manufacture your games. Beware of taking a transactional approach, an effective and sustainable approach to sourcing requires relationship building with suppliers and an appreciation that they are also in business to make money. We would normally suggest Board Games companies with multiple new products launching each year focus on building two strong factory partnerships. This allows for the benefits of good working relationships, allows for some supply chain diversification and offers two sources for quoting to ensure pricing is competitive.

2.       Work in partnership with the factory on the product spec – there are normally some features of the product spec which are sacrosanct, but there are others where there is more leeway. One mistake we have observed over time is board games companies and their Sourcing Managers really screwing down a factory on pricing without asking the factory to challenge the spec. We have worked with many of the most respected Board Game factories in the business, and one opportunity we recommend our clients to take is to ask the factory to proactively challenge the spec and to find cost savings based on process, materials and overall specification. Clearly they would rather take this approach versus making less margin, and often their solutions are better anyway in terms of setup experience or gameplay experience.

3.       Use factories with established customer base – we would always be wary of an inexperienced factory. Why would you take the risk of working with a factory on their first few projects when they have yet to develop the expertise to ensure consistent quality & delivery standards? Maybe you could work with an inexperienced factory for a significant cost reduction but aside from this we would normally suggest it is prudent to review the existing customer base of a factory. The easiest way to find out who else the factory is supplying would be to ask them, most factories are happy to share the list of companies they supply, you can also check how good they are at protecting the details of their clients projects by probing and asking for more information, if they tell you everything they are doing with no respect for client confidentiality you can expect them to treat your confidential projects with the same approach!

4.       Review carry forward product pricing on an ongoing basis – when a company sells a product year after year, and where the pricing seems ok and is fairly stable i.e. not increasing all the time, it can be all too easy to leave things be. This though is often where the biggest cost savings can be made, by refining costings and spec on an ongoing basis. One project we worked on was for a long-established Board Game with some plastic components and plenty of cardboard items. Typically, this type of long-standing multi-component game can offer good opportunities for cost savings as technologies and cost barriers are broken down over time. When we reviewed the company product portfolio and the sales and profit of each product this particular Game stood out like a sore thumb due to good levels of recurring sales, but low profitability. By identifying the problem and getting the team at both the company and the factory thinking on how to rework the spec, the manufacturing processes and the materials we were able to deliver cost savings of more than $150,000 while also delivering a far better experience for gamers.

5.       Work with experienced 3rd parties to get better value and find more cost competitive sources with reliable delivery – in theory nobody wants a middle man, but often in the world of Sourcing middle men can actually save you money. The average Board Games company we have worked with (based on having worked with, consulted for and sold to more than 200 Board Game companies) typically has just one Sourcing Manager or sometimes a person with remit for sourcing and other functions. Presuming they are sourcing in the Far East, they may actually visit the factories once per year, sometimes even less than that. They tend to spend far more time on the process of ordering and shipping than they do on actually sourcing. By using 3rd parties you can often find better solutions and cost savings due to added resource, expertise and knowledge.

We run a Consultancy business helping board games companies to grow & be more profitable. We have saved our clients more than $10m on sourcing over the past decade. We work with the most reliable board game factories in the business with strong capabilities and competitive costings. For more information on our services (including Sourcing) please just click here: https://www.boardgamebiz.com/game-business-consultancy

Sign up now for our free BoardGameBiz newsletter offering insights, news and analysis of the business of Board Games. We’ll also send you a free copy of our book ’55 Features of Best Selling Board Games’ – just click here to sign up.