Home Forums The Gaming Room Asmodee Group (Largest publisher; Owns Fantasy Flight Games etc) Reply To: Asmodee Group (Largest publisher; Owns Fantasy Flight Games etc)

#11896
WonderSlugWonderSlug
Participant

Perhaps I can add to this topic. I was at that trade show. And I actually think it’s important to point out that this was a Trade Show for retailers, not a “con”. I think the distinction is important to have proper context for the conversations that occurred there.

I’m in the planning stages of opening up a board game cafe, so a business contact suggested I attend this show. It was very helpful and gave me a lot of insight into how a lot of people in the games industry think. And believe me, this exact topic was discussed a HUGE amount throughout the week-long gathering.

A great number of people, including reps from other publishers, expressed uncertainty toward this initiative. The rep from Iello for example stated their company is going to study the results of this program because they too are in the process of designing a program to achieve essentially the same goal. He’s just “not sure if this is the best way to go about it.”

But one theme was constant among everyone. That is, “hugely discounted online sales have devalued and commoditized a great portion of the hobby games industry, hurting brick and mortar hobby shops and manufacturers alike. How do we stop this?”

I’ll sum it up the best I can and then do my best to address any questions.

The relevant portion of the video – https://youtu.be/WEZLeI1Ykng?t=9707

The problem. Online retailers such as Amazon – and equally important, brick and mortar retailers selling third-party THROUGH Amazon (Not Amazon proper) – are driving down the cost of games to unsustainable levels for both publishers and brick and mortar retailers. There were many claims that a lot of this is due to “bots” seeing a discounted price somewhere, then dropping the price on their site to beat it. That process repeats many times over, back and forth, until the price is so low it’s difficult for anyone to make any profit from the sale. In many cases, games are selling for barely above wholesale cost. Consumers love this. Brick and Mortar stores cannot survive this.

Key to this problem, according to Asmodee, is that online retailers and brick and mortar stores currently sign the same agreement to sell Asmodee’s products. Part of this agreement includes the price at which these parties agree to purchase games FROM Asmodee and Asmodee’s distributors. This is called the “retailer discount” or “wholesale price.” This program, as stated at least, will provide a better wholesale price to brick and mortar retailers than to online retailers. This, in theory, will be enough of a difference to prevent online stores from being able to discount the product to unsustainable prices. The hope is this will stabilize the price of products and adjust the consumer’s perception of what that product is worth. [emphasis added] Everyone was assured at the show that prices would not increase. The goal is simply to bring them back up where they belong. Online retailers will still sell Asmodee NA games. They just won’t be able to do so at such a huge discount. At least….that’s what we were told.

Many consumers balk at the price tags in their FLGS because their perception of what the product SHOULD sell for has been altered by online retailers. In many cases – I have a few stores near me this applies to – the FLGS is selling for ABOVE retail. This is not OK. But often times, a store cannot move product AT retail price because Amazon has it for 40% cheaper. Many people believe the stores selling ABOVE retail are doing so in an attempt to make up for the lost sales to Amazon’s discounts. Obviously, this doesn’t really work for most people. There are the occasional “local loyalists”, but they cannot buy enough to keep a store going.

Brick and mortar retailers, in theory, provide a different level of service than online retailers. Asmodee has taken the position that it wants to grow brick and mortar, grow gaming as a community, and it’s hoping that giving the brick and mortars a better discount price will do that. Amazon can give you reviews of product, but can you meet up with friends to hang out, play, and discuss new games, old games and everything in between? Game stores HAVE TO provide some reason, other than price, to draw customers in. Many try. Most in my experience don’t.

Many of the stores around me provide shit service and are not desirable places for me to spend my time. My wife will go “inside” with me if it’s dark outside and she doesn’t want to sit in the car…that’s about it. This is one of the factors that led to me wanting to open my own business. We NEED a good place to go and play games, to take our friends and family who might not be “core gamers”, where community is key and MTG cliches take a back seat to growing the hobby and sharing our love of games with others. Many of the store owners at the trade show expressed that same sentiment, but are greatly conflicted between that dream and the reality of shifting much of their focus toward pushing product out the back door through third party online sales just to keep the lights on.

Now, we have to consider the other side of this, right? If Asmodee controls the prices and avenues of sale, can’t they do anything they want? I spoke to one retailer who was quite displeased because Asmodee has already started tweaking the discount price across their various publishers. They’ve made the price better for FFG products (Descent, Star Wars, Netrunner), but worse for Asmodee products (Takenoko, 7 Wonders). FFG is a good brand, and you might say “well, better price for FFG is cool. It sells like hotcakes.” That’s true, but not for everyone. This particular retailer told me they rarely ever sell FFG products. They’re more of a family store, and taking a hit on Asmodee games has dug into their bottom line significantly.

We also have to consider price creep. Once the consumer’s “perception of value” is “stabilized” can we trust Asmodee NA to keep prices reasonable? Unfortunately only time will tell there.

Consumers might not be thrilled about it now, but I’m confident based on many of the presentations I saw that this, or something like this, is going to become more the norm than the exception in the coming years. Almost every publisher and manufacturer at this show expressed similar concerns toward what online discounting is doing to their product lines, not just for brick and mortar implications, but because it affects their business as well. If consumers will only pay half price for a game, how many new, exciting, risky, fancy component filled games do you think they’ll continue to produce?

Of course, the cynical side of me is just sitting here thinking, “well, couldn’t the current prices be responsible for the current boom in gaming culture and popularity?” “Well, isn’t this just the publishers seeing a spike in interest of their games and just trying to milk it for as much as it’s worth while they can?” <shrug>

I dunno….

Any questions? 🙂