Death of the LGS

[Storyteller01]

How do you know they've done nothing?

We'd have heard about it by now. Amazon or B&N seeing possible legal action from wizards would be industry news.

They won't do anything. Much as we want to believe otherwise, wizards sn't big enough to go after these companies. They can't afford to.

 

[gamersgambit]

A few comments:

First, the economic theory thread has been played out. Can we (if we're going to discuss economic theory) argue it in another thread aside from the one I started, please?

Second:

Wizards has a pretty lousy policy when it comes to direct sales with LGSes: COD or credit card -only-. They don't offer terms. Their shipping costs a bunch (and for an east coast store, takes 4 days to arrive).

They also screwed up their tier program, which I can go into if you really care about that.

I don't know what discounts they offer for bulk sales to people like Amazon. I don't really have a problem with them offering bulk sales discounts--if they didn't, I wouldn't be able to buy from my distributors at the same cost that Wizards charges only with terms (which I do to avoid COD).

 

[mlund]

Then why aren't all distributors or LGS's offered this same incentive?

They are. Read above to see examples of such.

You don't get the price incentive attached to buying 100,000 units because you don't buy 100,000 units.

It's really that simple.

By doing nothing to curtail the releases in Amazon or B&N, they have effectively condoned their actions.

You've provided zero evidence that this is the case.

My limited experience with contracts indicates that WotC / Hasbro as well as Amazon would have to complete idiots not to have penalties and reparations clauses in their contracts for things like this. They'd also have to be idiots to speak in public as to the details of those clauses.

This and other actions taken may be indicative of resentment towards its customers.

It could be taken that way, sure. You can read unsubstantiated assumptions into just about anything if you try hard enough.

- Marty Lund

 

[Corjay]

My limited experience with contracts indicates that WotC / Hasbro as well as Amazon would have to complete idiots not to have penalties and reparations clauses in their contracts for things like this. They'd also have to be idiots to speak in public as to the details of those clauses.

That comes down to power. Who has greater power over the other? In this case, Amazon has the power. WOTC can't afford to lose their business, which means Amazon can pretty much do whatever the hell it wants to. Sell early, force cost decreases, etc. Now if it were just a small time distributer, WOTC would simply say "you can do it as we ask you to, or we can refuse business with you." In that case, WOTC has the power, because the small distributer needs their business.

 

[Storyteller01]

They are. Read above to see examples of such.

You don't get the price incentive attached to buying 100,000 units because you don't buy 100,000 units.

It's really that simple.

And how many distributors or LGS's can buy that many?

You've provided zero evidence that this is the case.

My limited experience with contracts indicates that WotC / Hasbro as well as Amazon would have to complete idiots not to have penalties and reparations clauses in their contracts for things like this. They'd also have to be idiots to speak in public as to the details of those clauses.

They don't need to. People talk, even when clauses have been established. It's the human factor, and very hard to negate. Look to the leak of both GW and WotC materials for examples.

You would also see effects in both business, as neither would continue their standard business until this has been resolved. WotC is still sending books, and Amazon is still selling them at reduced rates.

It could be taken that way, sure. You can read unsubstantiated assumptions into just about anything if you try hard enough.

- Marty Lund

The future will tell.

 

[racoffin]

A few comments:

First, the economic theory thread has been played out. Can we (if we're going to discuss economic theory) argue it in another thread aside from the one I started, please?

Amen. The thread was how to get people interested in their local gaming stores (and Scott's in particular). Quibbling back and forth about economic theory could probably be done elsewhere. Might help to cool things off as well.

 

[mlund]

That comes down to power. Who has greater power over the other? In this case, Amazon has the power. WOTC can't afford to lose their business, which means Amazon can pretty much do whatever the hell it wants to. Sell early, force cost decreases, etc. Now if it were just a small time distributer, WOTC would simply say "you can do it as we ask you to, or we can refuse business with you." In that case, WOTC has the power, because the small distributer needs their business.

I think that's an awful lot of assumptions right there with very little substantiation.

I don't think Amazon can "do whatever they want," nor do I think "Wizards of the Coast can't afford to lose their business." Otherwise Amazon would've had Wizards stop selling to its competitors already. If Amazon dropped off the face of the world tomorrow, or Wizards just didn't do business with them anymore, I'm pretty confident that Amazon's competitors (Buy.com, Barnes & Noble.com) would pick up their volume. It might cost a little bit of money, but Wizards isn't Amazon's hostage by any stretch of the imagination. If they damage the D&D, WotC, or Hasbro brands it is certainly in Wizard's power and best interests to cut them loose.

And how many distributors or LGS's can buy that many?

I'd assume no LGS can afford to buy that many. They wouldn't be very Local if they moved 100,000 units. Plenty of wholesalers and rival online sellers deal in that kind of volume, though.

If you're trying to argue that LGS's can't match or beat Amazon's prices we've already established that a long time ago - so I don't quite get your point here. I think we've already established that the LGS has to compete by doing better than Amazon in areas other than sales price - including making sure to put an "F" in FLGS.

They don't need to. People talk, even when clauses have been established. It's the human factor, and very hard to negate. Look to the leak of both GW and WotC materials for examples.

You would also see effects in both business, as neither would continue their standard business until this has been resolved. WotC is still sending books, and Amazon is still selling them at reduced rates.

Leaking game IP that passes through hundreds of hands is one thing. Leaking confidential legal contracts that are basically for-lawyers-eyes only are quite another thing. Law firms that work for major companies are hard-core about confidentiality.

Secondly, nowhere is it required for Wizards of the Coast to stop doing business with Amazon.com because a shipping center somewhere in Canada screws up 1 batch out of 6,000,000 shipped orders. There might be a compensatory fine or a breach of contract if the behavior is systemic and repeated - but we have no evidence of systemic and repeat or willful bad faith in this case.

- Marty Lund

 

[Corjay]

I think that's an awful lot of assumptions right there with very little substantiation.

I don't think Amazon can "do whatever they want," nor do I think "Wizards of the Coast can't afford to lose their business." Otherwise Amazon would've had Wizards stop selling to its competitors already. If Amazon dropped off the face of the world tomorrow, or Wizards just didn't do business with them anymore, I'm pretty confident that Amazon's competitors (Buy.com, Barnes & Noble.com) would pick up their volume. It might cost a little bit of money, but Wizards isn't Amazon's hostage by any stretch of the imagination. If they damage the D&D, WotC, or Hasbro brands it is certainly in Wizard's power and best interests to cut them loose.

"Then I guess you don't know everything about [business]." —Princess Leia



Business is a power struggle. There's no such thing as corporate etiquette. There's a reason they say it's "dog eat dog". If you're not the one doing the pushing and pulling, then you're the one being pushed and pulled. Simple as that. Whether it's Amazon or it's WOTC, one of them is doing the threatening and the other one is doing the cowering, and I think it's clear in this situation which is which.

 

[Storyteller01]

If you're trying to argue that LGS's can't match or beat Amazon's prices we've already established that a long time ago - so I don't quite get your point here. I think we've already established that the LGS has to compete by doing better than Amazon in areas other than sales price - including making sure to put an "F" in FLGS.

It has been proven that this does not work. Give out things for free, and you get folks looking for handouts. If you want to sell, sell it cheap. In time sensitive markets such as gaming, you also sell it first. No LGS can do this over larger competitors.

Leaking game IP that passes through hundreds of hands is one thing. Leaking confidential legal contracts that are basically for-lawyers-eyes only are quite another thing. Law firms that work for major companies are hard-core about confidentiality.

Confidentiality isn't all that safe. If it effected the industry there would at the very least be rumors. You find this in all levels of business. It's so prevalent that rumors concerning major companies effect stock markets.

Secondly, nowhere is it required for Wizards of the Coast to stop doing business with Amazon.com because a shipping center somewhere in Canada screws up 1 batch out of 6,000,000 shipped orders. There might be a compensatory fine or a breach of contract if the behavior is systemic and repeated - but we have no evidence of systemic and repeat or willful bad faith in this case.

- Marty Lund

It isn't a single location hit. Pre-orders will filled and shipped early, in these cases confirmed in california as well as canada. Several folks on this site claimed to have gotten their early, a few of those willing to answer questions about content.



Regardless, I do believe that you need to support your LGS if you want the game. The stores go, then all that's left will be the internet. Their prices will be higher due to lack of competition. Without the stores, advertising is also restricted to word of mouth. A small as the gaming communiity is (relative to the global and corporate scales), this won't be enough to keep the game going.

 

[Cadfan]

The problem with mlund's reasoning is that he presupposes that things like bulk discounts are natural, immutable facts. They're not. Wizards of the Coast doesn't have to offer that bulk discount. If they believed that online distribution was doing damage to the overall health of Dungeons and Dragons, they could end bulk discounts instantly. In fact, if they believed that deep discounting was harming the overall health of their product line, they could establish a price floor at will, simply by putting it into the contract for the purchase of their products for resale.

There's all kinds of things they could do. Now, the fact that they're NOT doing these things suggests that either they don't believe that local gaming stores are hurting as bad as local gaming stores claim, or they don't believe that local gaming stores are as important to the hobby as local gaming stores claim, or that they feel that the overall negative effects of these policies would be worse for them than the gains from supporting local retailers.

But they could do these things any time they wanted. Or at least, at the earliest moment after their current distribution contracts expire.