Why New Board Games Companies Are An Existential Threat To Established Games Businesses

Why New Board Games Companies Are An Existential 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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