Flying off the shelves!

[Illrein]

I feel bad right now.
Currently, the gaming business is bad in my area.
The FLGS I go to is the oldest in the city. Nearly ten years it has stood across from a university and by a plethora of fast food restaurants. New management and relocation in the year 2001 resulted from the then shop owner being hired by Wizards. It is under WotC policy that it would violate the conditions of his job to own and operate a gaming store (he had something to do with Magic: The Gathering and tourneys and such). I was worried, along with the entire city's gaming community, but, as luck would have it, two of the guy's best friends bought the place: two well-known local role-players (one's liberal DM, one's conservative DM, though). This was good for me and other gamers alike: the current employees were a guy who hated everything (Magic, D&D, customers, everything!) except Battlefield Earth and techno music, and the other stole Magic cards from the store and was eventually fired. The solution was solved. A few months later, the original shop owner was laid off from Wizards, and at the time, it left a bad taste in my mouth about WotC.
Since then, this FLGS has been antagonized by Challenge Games. If anyone's familiar with this franchise, it sells a large assortment of Games Workshop stuff and paintball materials, but a minimal supply of D&D (WotC stuff only; no small indie press stuff). They moved out of the local mall, getting rid of an employee everyone there disliked. This employee decided to open his own Challenge Games-clone: Victory Games. Little did he know that doing this greatly crippled the business of all three gaming stores.
Now, business is so bad, my FLGS is close to being closed. Their landlord dislikes them, and he tried to shut them down this past weekend by locking their front door so they couldn't conduct business (luckily, one of the new owners was in the store at the time, so he just opened up the shop again). I talked with one of the owners, and he said that his best guess is that only one of the gaming stores will be left within a year. The owners miss the glorious days of Pokemon (when they'd get tens of thousands of dollars a day!), and the only thing being close to that is Yu-Gi-Oh, which has barely made a couple hundred dollars for the fledgling FLGS. Last November, the store had its worst sales in its history, in spite of several promotional offers. The D&D scene is almost dead here. The only gaming groups left in the city that know of the FLGS are down to three, two of which I am in. I live in Lubbock, which is large small town. All of the former gamers have either moved away, got full-time jobs, enrolled in college or some other school, or quit playing all together (some blame the d20 system, some blame Wizards and their high prices, others blame that no one plays any decent RPG anymore).
I've decided to buy my books at the FLGS, but I do reconsider often, thinking about my small amount of money I have. The total amount of books I want are about $120 (all 3.5 and Ghostwalk).
Personally, I support my FLGS over Wal-Mart or Amazon any day. But then again, I am really short on cash. In the end, I'll probably end up buying the gift set from my FLGS, along with Ghostwalk.
Sorry for being long.

 

[Gizzard]

The fact that Taloncomics' sales volume does not allow it to comfortably discount as much as Amazon does not make Amazon bad or Taloncomics good. The motivations for the discount are the same.

Well, I think this is the difference between the FLGS and a massive online retailer like Amazon - the idea that "sales volume" fits into the equation.

Inherently, places like physical Walmart have made a big business out of buying in large quantity and passing the savings on to the consumer. This means that Walmart cannot carry niche items because these items fundamentally don't fit the business model.

Amazon, Buy.com and online Walmart.com are experimenting with a new business model where they carry absolutely everything and discount nearly everything they carry. I don't believe any of them are currently making money with this strategy however.

I think we realize that "sales volume" is an important key to giving consistent, deep discounts. And we also realize that very few RPG products are going to give the sort of "sales volume" that is profitable for mass-marketeers. Fundamentally, RPGs are not mass-market products. So, what is the future of RPG products with respect to the large online retailers? Unless I misunderstand their business model, I don't see how the two go together in the long term.

 

[TalonComics]

Re: Now hold on a minute

(Disclosure: I'm the editor for Amazon's game store and wrote the reviews for 3E.)

Derek, we've disagreed before and I don't want to get into an argument but I've got to call you on the above quoted statement.

Amazon tries to be "the world's most customer-centric company". That phrase is honestly behind every business decision Amazon makes. As a cynical gamer I was at first suspicious, figuring it was just a slogan. It's not. So:

The reason Amazon discounts is because it wants to pass savings on to customers.

The reason you discount is because you "wanted to pass on some kind of savings to my fellow gamers".

These reasons are the same.

The fact that Taloncomics' sales volume does not allow it to comfortably discount as much as Amazon does not make Amazon bad or Taloncomics good. The motivations for the discount are the same.

Example: Pro pitcher Randy Johnson likes to throw fastballs. I like to throw fastballs. Our enjoyment of throwing fastballs is the same, but Randy can throw them much faster. If you're the manager of a baseball team which pitcher, me or Randy Johnson, is the better choice? If you care about fastball speed, Randy is the better choice because he can throw faster. Does that mean Randy is a bad person? No. It means he's a capable pitcher.

Taloncomics discounts. Amazon discounts. The reason both stores discount is because they want to pass savings on to customers. The motivation for discounting is the same, but Amazon's discount is greater. If you're a buyer of a book, which store is the better choice? If you care about price, Amazon is the better choice because it provides a greater discount. Does that mean Amazon is a bad company? No. It means Amazon is a capable retailer.

Taloncomics is a retailer. Amazon is a retailer. You're a gamer, I'm a gamer, our customers are gamers--that's all equal. The discount percentage is not equal. That difference in discount does not create a moral imbalance.

Furthermore, I don't believe your claim that Amazon hurts the game hobby. On the contrary, I say that the Amazon is a great boon for the hobby. If the nearest game store to Bob is 2 hours away in the city, then Bob can't game. But he can buy at Amazon, and can game. If Jim can't afford game books at a physical store, then Jim can't game. But he can buy at a discount at Amazon, and game. If Brenda is too busy to drive to a physical game store in the hopes that that store happens to have the game book she wants on its (limited) physical shelves, then she can't game. But she can order at Amazon, order virtually any book with an ISBN number, have her books delivered to her very doorstep, and game.

Amazon gets more games to more people at lower prices. This is good for game publishers. This is good for game players. This is good for the game hobby.

Good is not bad.

-z, growing tired of being called a bad guy.

First off, I don't think you're a bad guy! I don't even think Amazon is a bad company, however, I'm not oblivious to the fact that one of Amazon's business tactics is to undercut other businesses with massive discounts, then hope they'll make up for it in bulk and in the process kill off some competition. Do I think that's evil? No, of course not. When I see that kind of practice threatening a hobby I love though I start to get defensive.

I think it's a great concept that people in remote areas can buy gaming product online and have it shipped directly. I've been in situations where I would have loved that back in the 1980's. That is the number one reason I have an online presence for my store also.

I just don't believe massive discounting is helping our hobby. Gaming isn't like the video or music industry. No Blockbuster is going to come along and start a chain of game stores located in practically every town across the country while all the locally owned store go out of business.

So, that makes me ask, what happens to gaming when the FLGSs go out of business because they couldn't compete with massive discounters? What happens to gaming when Amazon goes out of business because they're losing millions of dollars every quarter? These are my worries. We're already seeing stores closing because they're not adapting to the internet. We're already seeing stores closing because they can't afford to offer the same discount as massive discounters. I've seen many specialty stores try the tactic of massive discounting to pull in customers and the end result was either they went out of business or they stopped massively discounting because they weren't making enough money.

Where does it end? I honestly don't know but I do know it's not going to be a good thing.

Zaruthustran, once again, I just want to say I don't think you're a bad guy. I just don't believe that massive discounting will ever benefit gaming long term.

~Derek

 

[JohnNephew]

This isn't going to happen I'm afraid. As I've said before most make their bread and butter money on the best seller, main stream WotC products. If they're not going to be able to sell those then they don't have the money to pay rent *and* carry smaller press books. Next thing you know the FLGS is gone or is selling Warhammer exclusively.

~D

And, indeed, most of the FLGs's will be gone. I hear tell that about 20% of game stores go out of business every year, maybe more.

"Please buy these bestsellers from me for a higher price than you'd pay elsewhere" is not a long-term business plan for a retailer. "Let me win your business by discounting everything in order to meet or beat the best price out there" is a lousy plan, too, because for the small retailer the economics of discounting are a path to doom. If the small retailer depends on those strategies for bread and butter, they're going out of businesss sooner or later.

The game stores that are thriving do so by adding substantial value for their customers. That value may be convenience (don't wait for delivery of a mail order), it may be selection (a customer may come in knowing that the store has a huge and well-organized selection of obscure D20 titles from small publishers...and walk out with a full-price 3.5 Player's Handbook), it may be service (the friendly merchant teaches you to play and you buy the game; or he learns your tastes, and helps you find titles you will enjoy, which you otherwise would not even have known existed), and so on.

In my experience observing stores, the ones who really carry small press titles (not just the ones who stocked up on small-press D20 when the category was hot) are not particularly threatened by online discounters. The people most threatened by online discounters are the ones with narrow selection and a lack of distinguishing features or a competitive edge.

The Warhammer comment is interesting. Games Workshop has been the most aggressive manufacturer in terms of cutting off online discounting. But what they also do more than anyone is assert control over the FLGS, to use every means at their disposal to control what goes into the store, how it is merchandized, etc. If a manufacturer does something to cut off online sales channels and discounting, you've got to expect that they too will look to get more out of it -- after all, a publisher is giving up sales volume (we get the same cut if a book is sold at 25% off, 40% off or full price), they need to make up for it somewhere.

I don't think there's a force in the market to do it today, but at some point in the future I can imagine an RPG publisher that only sells to authorized dealers, prohibits discounting, invests heavily in (and micromanages) merchandising in those outlets, and so forth. Perhaps a publisher would offer a deal like: "We will do everything to stop online discounting of our products, and we will provide a vast array of merchandising tools in your store. In exchange, you agree to carry ONLY our product line in these categories."

 

[hunter1828]

In all this discussion of "small, friendly, local business is better than large, impersonal, discount business" I'm left wondering how many people remember, or even realize, that even Wal-Mart was a "small, friendly, local business" at one time, struggling to stay in the black?

hunter1828

 

[Magus Coeruleus]

I don't know about Amazon and won't speak to the issue of buying from them, but in the case of Wal-Mart, a very good reason not to buy from them is because they have atrocious business practices. They sell sweatshop-produced goods, they have a bad track record with employees, and they drive local businesses out and homogenize availability of goods and services, which I think is a bad thing.

Also, and this applies to Amazon and any big chain, money tends to flow out of the community and into corporate coffers, whereas local purchasing supports the community. This can have a significant impact on the economic health of your city and town, the diversity of businesses, wages, job availability, etc.

Another factor affecting online outlets is that in many cases you don't have to pay sales tax. This is actually a bad idea, in my opinion, even if it was good for a while the internet as a marketplace was just developing. If you like to argue straight libertarian, capitalist "vote with your dollar," "survival of the fittest" philosophy, you ought to consider that this only works and is only fair with a level playing field. The fact that local stores have to deal with sales tax and onliners usually don't means they get an unfair advantage. It also represents millions upon millions in lost revenue for local government, which provides roads, police, fire department, and other services to both local and remote sellers. It's just that the local stores are footing more of the bill because they pay the tax (or, technically, get less sales because they pass the tax to you, as per normal). So onliners get to discount for free. In the U.S. and most of the industrialized world, we don't really have capitalism, but rather corporate socialism. Corporate profits are privatized, but corporate expenses and losses are largely socialized. It's not a free market, but a free ride for big business.

Does this make online retailers and big corporate sellers evil? Frankly, I don't really care to add the overly simplistic alignment system on it. It's not the real issue. The issue is that the game is rigged in favor of the big guys. If that matters to you, maybe it should be a factor in where you buy your stuff. If you don't care so long as you can get a cheaper product now, that's fine, but arguing that it's all the responsibility of the local retailer to deal with the problem is kind of disingenous.

I won't actually argue that people should all buy their RPGs from a local gaming store, because I think there are a lot of variables to consider, but I just wanted to point out those that generalize to pretty much all goods/services.

Oh yeah, and if you'd like to help small business and the long-term health of the hobby, but don't want to do so buy spending more money (understandable), there are other ways. You can start by contacting your elected (or selected, as the case may be) representatives and argue for a more level playing field. The more you look, the more you'll find that the big guys aren't all big because they run a tighter ship. Oftentimes it's because they can use their size and power to get unfair advantages. The possibility that they may have started small and innovative does not change this common reality.

 

[Knightfall]

First, let me say that this thread has been a great read.

Second, I'm a gamer living in a city where one major game store has at least two (maybe three) locations in town and it is impossible for new game companies to compete with that group of stores.

Third, I have always bought my gaming material from a LGS, whether it be the store mentioned above or anther local gaming store that is now out of business.

Now for the crunchy part of my response. That top dog game store just recently had to scale back its store front presence because less and less gamers here in Edmonton shop there.

Why?

Because those gamers are now buying their gaming books over the Internet. And now Wal-mart is getting into the picture and it's going to be harder and harder for my LGS to stay in business.

Now, I personally know the guy who runs the place and I can honestly say I find him to be a good guy. However, his business decisions regarding ordering and pricing does leave a lot to be desired.

You can't order non-mainstream products from him unless he's seen a promotional copy of the companies work first. He won't take the risk because so many gamers have backed out of special orders in the past that he gets stuck with the product and often has trouble selling it.

And his prices are quite high. In fact, unless you have an account with his store you pay more for the products you buy. (Normal Price = Suggested Retail Price + Markup + Sales Tax; Price with Membership = Suggested Retail Price + Markup.) Note that the markup works out to be roughly the exact same as paying sales tax based on the Suggested Retail Price.

Now, you're probably asking 'why the hell would you pay that much?'

Answer: Choice.

In the past, I have chosen to pay his prices because I believe that it is important that he stay in business. Because if he goes under there are no really good places to buy RPG products in Edmonton. The few places that do stock gaming material are either poorly informed, poorly staffed, or have VERY limited selection.

Now I've come to a point in my life where my choice might need to change becuase of economics. In the last few months I've been going through a downcycle physically, emotionally, and financially. I just don't have the resources to have money for extra things. (I must thank my sister more often for paying for the ADSL connection so I don't lose my Internet contacts.)

I can guarantee that I won't have money for the new core rulebooks and that I'll have to live with using the new SRD.

As for my point! This difficult time period and the fact that it might be months (or longer) before I can afford RPG books again means that when I get back to where I'm doing more than surviving, it might be time for me to change my choice for purchasing RPG products.

A lot of RPG products (most notably WotC) are becoming more and more expensive as the difference between the US dollar and Canadian dollar becomes less stable. RPG products are WAY more now than say five years ago and not just because they have become fancier with more color and artwork.

And D20 products are even moreso for less content because they can't put out a book for the same price as WotC can.

Thus, I will most likely have to forgo buying the books from my LGS and buy them at Wal-Mart or anywhere else in town I can get them cheap (evven used if I have to).

And buying them online isn't an option since I don't have a credit card, or any chance of getting one, and I am not comfortable with sending a check or money order to a LGS, with an online presence, that I've never visted and don't know anything about.

Anyway, just my .02, which I'll need back BTW.

Cheers!

Robert Blezard, a.k.a. Knightfall1972
Edmonton, Alberta
Canada

 

[Numion]

Has anyone mentioned the fact that with the on-line discounters books that wouldn't have been sold at the higher price are sold? That means more money for WotC than they would get otherwise - and whats good for WotC is good for the game.

All gamers aren't like ENWorlders that are just "IT MUST BE MINE!" about the core books. Some people won't buy them unless the price is right. It isn't a choice between FLGS and massive discounters - it's a choice between massive discounters and "no books at all". Which of those choices is better for the hobby?

 

[David Argall]

economics course

"in the case of Wal-Mart, a very good reason not to buy from them is because they have atrocious business practices. They sell sweatshop-produced goods, they have a bad track record with employees, and they drive local businesses out and homogenize availability of goods and services, which I think is a bad thing."

Actually, it is a quite good thing, which is why people buy there in large numbers. Let's start by loading the language the opposite way..
Wal-Mart provides low cost goods by not allowing its employees to loaf on the customers' time, and makes sure they do good work to provide you the service desired at a price the ripoff artists can't match.

You are in partnership with Wal-Mart when it pays its employees and the money they get comes directly out of your pocket. Which do you ask? What are the employees paid? or Which is the lower price?
And homogenize means you can get the services you want. You do not have to move to Latin America to eat bananas, or to Canada for ice cream. They are both at the store around the corner, whether that store is inside the US or in Europe or... You are getting what you want.


"money tends to flow out of the community and into corporate coffers, whereas local purchasing supports the community. "

Delusional. Notice how people flow out of the communities that don't have these big stores and chains. They are satisfying a need and attracting people.
The basic point is that while money is flowing out, it is also flowing in. We have new jobs, new construction, greater income for the average consumer [in the real sense that lower prices means his income can now buy more]... What has happened is that you are involved in a larger circulation of money than without these large chains. One way, the money flowed from Hicksville to Podunk and back. Now it flows from Hicksville to Chicago, to Paris, to Maimi, and back to Hicksville.


"This can have a significant impact on the economic health of your city and town, the diversity of businesses, wages, job availability, etc."

Yup, tho the opposite of what you are thinking. For example the average consumer now has extra money in his pocket, which means he can buy from yet another merchant, increasing the diversity of businesses.

"If you like to argue straight libertarian, capitalist "vote with your dollar," "survival of the fittest" philosophy, you ought to consider that this only works and is only fair with a level playing field."

Quite the contrary. All of economics is dealing with uneven playing fields, which are superior.
John is 7'6". Sam is 4'5". Nothing level there. So John changes the ceiling lightbulbs [or stars in the NBA] and Sam scraps the gum off the underside of the table [or is a winning jockey]. Both are better off because they are different and can do things the other can't. They would be both be made worse off if you made them each 6'0". They, and we, don't want a level playing field.


"The fact that local stores have to deal with sales tax and onliners usually don't means they get an unfair advantage. It also represents millions upon millions in lost revenue for local government, which provides roads, police, fire department, and other services to both local and remote sellers."

It also provides power to the politicians, boondoggles, ego gratificating monuments... The assumption that government = waste is well founded, and the more money we keep out of government hands, the better for us.


" In the U.S. and most of the industrialized world, we don't really have capitalism, but rather corporate socialism. Corporate profits are privatized, but corporate expenses and losses are largely socialized. It's not a free market, but a free ride for big business."

Corporate profits are less than 5 cents on the sales dollar [& in the case of Wal-Mart, way less], so the free ride is that of the consumer who buys corporate products.
Note too that old saying, "2 wrongs do not make a right." . If we regard corporate subsidies as evil [which they often are], we fight the subsidies, not try to attack the corporation on a point where it is benefiting all.

 

[Magus Coeruleus]

Re: economics course

David: It was not my intention to start a flame war, so I'm not going to bother with a protracted response. I don't appreciate the hubris in titling your response an "economics course," nor the condescension of labeling my thinking "delusional." I find your arguments quite unconvincing. But based on your rhetoric and the way in which you select certain parts of my post for response while ignoring others that I felt were equally or more pertinent, it seems that the main issue is not disagreement regarding facts (though there's plenty of that), but rather that you and I seem to have rather different set of values motivating these arguments. Add to that the apparent lack of respect for anything I might have to say, and I really don't see much value in debate, just high flame potential.

I strongly disagree with you, and I'd like to leave it at