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/index.php/board-game-business-consultancy-services/
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