Sunday, July 01, 2007

Return of the LGS?

The Troll Family is blessed with a number of great gaming stores, like this one, within easy drive of where we live. We don’t frequent them as often as we’d like to, but we enjoying stopping by when we can, even if we can’t buy anything. Each visit is like a mini-convention, hanging out with like-minded nerds, chatting about games, anime, comic books, and cool movies. Where else can you find people who think “The Chronicles of Riddick” is an underrated movie?

It has long been a perceived truth that gaming stores are dying. Their ranks have been dwindling for some time now, and even cash cows like "Magic: the Gathering", "Pokemon", and D&D’s 3rd edition have done little to stem the tide of store closings, at least in the US.

But something you might have missed has happened in the US Supreme Court. Luckily, Ryan Dancey had his ear to the ground, and has this to say on his blog:

Luke Peterschmidt & I in our consulting practice, have considered the full-service hobby game store model to be unsustainable, and have long believed that such stores were doomed. We have been advising our clients to pursue as many diverse retailing strategies as they can, to avoid being “trapped” in a failing business model. At the heart of our analysis was the knowledge that discounting, especially e-commerce discounting, was a clearly superior business model to full-service retail store support, and that given enough time, the e-commerce discounters would eliminate most full-price retailers.

Leegin changes everything. EVERYTHING. Suddenly, the fate of the retail tier is in the hands of the publishers. And the publishers already know that the full-service retail model is the best way to grow their businesses. Given the chance to “save the retailers”, the manufacturers are almost compelled by the logic of the situation to do so.

This is pretty exciting stuff, and ought to have significant impact on the RPG and other gaming hobbies. What Mr. Dancey is predicting is the end of online discounts. (Notice I don’t say online discounters. They’ll still have a place as dealers to folks who don’t live near a gaming store. But the price difference between brick-and-mortar stores and online stores will vanish, which means there’s less incentive for you to buy online what you can get at your local store.)

Read the whole thing. Mr. Dancey discusses the common objections and doomsaying in the article, as well as in the reader comments following. Since he’s done a great job of dealing with those issues already, I’ll jump off what he wrote to other topics.

Assuming Mr. Dancey is correct, and assuming we do see a rebirth of the local gaming store, what does that mean for the hobby? At first, I thought this would accelerate the trend towards more Ptolus-like products. Listen to this special interview on “Have Games, Will Travel”. Without the discounters, will customers be more open to spending a lot more money for higher quality or more expansive products? Doesn’t this encourage the return of the boxed set?

I think it does, but that’s only half the picture. The big thing browsing through a store does is encourage impulse buying. You go to the grocery store for a dozen eggs and milk, and end up coming home with a box of donuts and a bag of chips as well. Gaming stores are the same way. You go to pick up the latest expansion of your favorite game, and you end up buying something else too that caught your eye. This is a huge boon for folks that make small, fun games. Things like “Kobolds Ate My Baby”, “Munchkin”, or pretty much the entire “Cheapass Games” line, are the sorts of things that could really benefit from this sort of phenomenon. This could be the shot in the arm that the independent game publishers really need to push the current small-press revolution to the next level.

Things could be on the verge of getting very exciting again for the gaming industry.

Update: For those of you thinking that this is an excuse for the manufacturers to hold retailers and customers over a barrel while they rifle through their pockets for loose change, read this thread over at Ryan Johnson explains how Guild of Blades is taking advantage of this situation. Notice that there’s a sunset provision, after which discounting is permitted, and even before that kicks in, the price floor isn’t SRP, but a percentage of that, allowing retailers to offer loyal customer discounts and the like. There are also provisions for returns as well. This isn’t manufacturers twirling their mustaches and cackling with avaristic glee. This is manufacturers telling retailers that if the retailers will take a chance on new products, the manufacturers will have their back, and not let them get screwed by deep discounters.

Seriously, people, the manufacturers we’re talking about make games for a living. You think they don’t know how to min-max? ;)

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