Why New Board Games Companies Are A Threat To Established Games Businesses

Barriers to entry have never been lower for the board games business. This has led to a proliferation of games products on the market and also of games companies. Whereas a new company would once have had to bang down the ever-resistant doors of retailers with unapproachable buyers and telephone switchboard operators who would resist at all costs aiding a new supplier, things today are in many ways easier for new entrants to the board games category.

It is completely possible to validate consumer appeal and propensity to purchase in reality ahead of seeking to sell to traditional retail businesses or to traditional board games distributors. Crowd funding sites and direct to consumer sales channels have revolutionised the gateway to the board games business to the degree that there have never been more games on the market before.

The challenge then comes down to elevating your company and products above the noise of everything else that is out there. For new companies this is an easier task which they can structure the business around as they grow, versus incumbent players in the market, who tend to have still a retail focused mindset versus a consumer-focused mindset. Board games companies which are relatively new today have many advantages versus established companies who are more beholden to their retail buyers and to their accompanying sales teams and company structure which inherently has to put traditional retail first avoid the traditional business model, and therefore is at least partly in conflict with competing routes to market.

There are numerous ways that established board games companies can manage this situation. They can form spin off divisions more focused on selling direct to consumers, they can form partnerships with other companies, and they can make acquisitions to bring the new starter mentality and consumer centric approach under their own roof.

What we see going forward though is that it will be risky to rely on the same old ways of doing business going forward. We nearly got through this article without mentioning Amazon, but it’s hard not to mention that Amazon still has huge growth ahead with more rollouts and ramp ups in more countries around the world. This is guaranteed to provide ongoing momentum for direct-to-consumer businesses (we classify Amazon as direct to consumer even though they are a retailer, because they are more of a self-managed selling platform versus traditional retail).

It would be an exaggeration to state that going forward the only constant is change, because board games are here to stay, and so are many of the traditional elements of the board games business, but nevertheless there can be no doubt that the future looks quite different. While the market position of games category leaders will remain strong, there will be an ongoing bubble of new entrants coming into the market increasing the competitive pressures on those companies who lack flexibility, as well as a perennial product line to rely on. We therefore predict a round of acquisitions ahead of established companies buying challenger brands and companies who can help them future proof their businesses.

These are interesting times!

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5 Ways Germanic Games Companies Can Export More Board Games

Germany (along with neighbouring Austria & German speaking Switzerland) is one of the biggest board games markets in the world. Board gaming is a major social pastime in Germany, to a level that is way beyond most other markets. Whether that’s devoted parents spending time playing games with their children, or adults playing the latest deeply immersive board game, the reality is that the Germanic peoples truly embrace board game playing. There is no better exemplification of the strong marketplace than the Essen Spiel show, which in normal (non-pandemic) times sees more than 200,000 gamers descend to play games, get crushed by the crowds (!) and to enjoy gaming after hours. To put this in context, Gencon gets only around a third of these visitor numbers, despite the USA having a much larger population than Germany.*

The challenge for German speaking board games companies is that the type of games which work in the market there don’t always travel all that well, certainly not compared with the apparent ease with which a successful game in the USA, UK or France can sometimes sell across different countries and cultures. We have worked with more than dozen board games companies in German speaking countries, and our team has many close friends working within the board games trade there, but the reality is that many Germanic games don’t travel so well. There are two primary reasons for this:

1.       Deeper, more complex game play as standard.

2.       Artwork style which does not translate as well to other markets vs the prevailing art style from other countries.

This is quite a risky article for us to write, because we don’t want to offend our many friends, colleagues and clients in Germany, so we certainly don’t make these points to offend people. But in order to help German board games companies export more games and grow profitably, we need to state the truth as we see it. The standard level of complexity and depth of instructions tends to be beyond the attention levels of mainstream potential game players in other markets.

Additionally, although artwork is highly subjective, there are definitely prevalent art styles from country to country, and these can be quite different. Many of the games which sell very well in the German market have pack designs which don’t automatically translate to other cultures quite as well as from some countries.

Having started with explaining why we think German games companies don’t export as many games as they could, we will now take a look at 5 ways in which they can sell more games overseas:

1.       Develop some simpler but equally compelling gameplays – those German speaking games companies who have enjoyed some degree of export success tend to have success with the simpler games in their portfolios. This does not mean that you can’t still develop games to the level required for success at home, but it just means allowing some thought and development resource to be directed to the export markets. If the necessary expertise is not available in house for this, there is a myriad of freelance resource out there of exceedingly high pedigree and capability.

2.       Consider creating ‘export’ artwork variations on priority products –

Where a company is keen to sell particular games overseas we have seen more success achieved when the company is willing to adapt the original version of the game as required to meet the prevailing needs of the export market.

3.       Develop games to brief for other markets – then see how they can be adapted for the market in Germany. One feature of the board games business in Germany is the proliferation of board games products. So many new games come to market every year, and nearly every company has multiple new titles coming to market every year. Surely there is capacity to develop a minority of titles focused on export markets first, German markets second?

4.       Be flexible if you can’t be bespoke - On games which can’t easily be changed for overseas markets, ensure maximum flexibility on trading terms, MOQs etc to give the games their best chance of finding good distribution.

5.       Run analysis on which types of games work well in BOTH German speaking countries and outside the region – there are some types of games which work across both German speaking and non-German speaking markets. If your team hasn’t analysed all games which exported well from the German market to see what they could learn, we do recommend running that exercise to create clarity on what gives the best chance of achieving success both in and outside the home market.

In conclusion, the reality is that German speaking markets represent less than 10% of the global board games market, therefore to maximise their chances of growth, focusing on what is needed for success overseas should prove more successful in the long term versus only selling the games which have already met the needs of the German speaking markets.

*https://www.dicebreaker.com/topics/essen-spiel/news/essen-spiel-2020-covid-19-unchanged#:~:text=Essen%20Spiel%20takes%20place%20in,Gen%20Con's%20approximate%2070%2C000%20visitors.

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Board Games Manufacturing Tips – The Value Of Shopping Around

One of the areas of the board games business which tends to get the least attention, especially from management is manufacturing. There are so many critical things to focus on with a board games company, selling – getting your games listed by retailers, creating or sourcing the next new hit games concepts, managing staff, and so much more. The reality is that most companies tend to stick with the same old board games factory unless that factory screws up and starts to fail to deliver.

While this inertia is perfectly understandable, and while there are a lot of benefits from building a deep and long partnership with a games factory, the reality is that there also considerable benefits to be derived from not allowing that factory or factories get too comfortable. The primary drawback of getting too cosy and too engrained with one board games manufacturer is cost effectiveness. It is just the nature of how business works and how human minds see things, but a new customer will always tend to get better pricing versus an existing one, unless the existing customer takes active steps to keep the supplier on their toes.

The primary way to keep your factory on their toes is to shop around a little. While it may not be practical to shop every single product around, it should be considered best practise to at least benchmark quotations from your current supplier against pricing from their competitors. Where a board games company has not had quotes from another supplier for some time, it is not uncommon to find that they are paying between 5-10% more than they could be.

Having said all this though, it is a mistake just to make everything about pricing, because above all what board games companies need from their factories is capacity and reliable supply. Board games have a highly seasonal selling dynamic with board games, and the challenging cashflow cycle which in turn leads to stock being ordered close to when it is needed as opposed to well in advance. Therefore, any supply chain disruption can have very costly consequences. And for this reason, we would normally recommend that aside from really small or very new companies, any established board games business should have at least two factory partners. This offers the ongoing opportunity to ensure pricing is reasonably sharp, but also offers supply chain diversification and risk reduction.

For those toy companies who sell board games also, the mindset tends to be heavily influenced by the toy business model, whereby tooling is necessary for plastic injection moulded products. Moving tooling is in itself quite a process, whereas duplicate tooling is costly and so these factors tend to lead to more inertia in terms of manufacturing location for toys. With board games where there is typically a small print set up fee, there is less reason not to consider multiple sources where it makes sense.

The bottom line here is that board games manufacturing is a critical part of the recurring board games business process. Sticking with the same single supplier all the time can lead to strong relationships, good understanding and easy working but it also comes with risks – risk of paying too much for manufacturing and also in terms of lack of supply chain diversification.

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