Friday, 23 November 2012

The State of the Local Games Shop

Following on my post earlier this week about the two competing game shops in my hometown, I now realise that this has happened before in Utrecht where four game shops have existed within less than a hundred meters of each other for some years now (The Joker, Subcultures, Never Never Land and Labyrinth Fantasy). But Utrecht, with over 300,000 inhabitants, is a significantly bigger city than Leiden or Delft, with a wider regional audience. And still I wonder how these shops survive.

As Ray noted, we've been lucky to have so many excellent games shops nearby in the Netherlands. Not just the staple of Settlers and Carcassone, but also FFG, Phalanx and other foreign publishers. Delft (where I play) and Leiden (where I live), both with a population of just over 100,000 are not particularly big to host a boardgame store, although most comparable Dutch towns have a shop carrying board games. In the small towns they often also carry Warhammer stuff, while bigger cities have separate GW stores.

Over the last years I've seen established shop owners returning to the basics, which require much less storage space and product knowledge. From one of them I've gathered that turnover was slow, with quite a few games collecting dust on the shelves and thereby reducing profitability. But specialist sections like Warhammer and board games require a significant amount of time to keep track off. You have to know the new releases, rule changes, etc etc. to keep up with the generally knowledgeable customers.

And yet, we see new shops popping up now and again. As the established shops retreat from the fringes, new shop owners step up to fill the gaps such as Malifaux, Kings of War, Dystopian Wars and Hordes. Clearly some people still try to live the dream of making a living from their hobby but as John Curry, who is republishing some of the classic wargaming books, notes, making a living from wargaming is very hard.

Turnover of Dutch toy shops (Statistics Netherlands)
Looking at the turnover data for Dutch toy shops (a much broader category, so I don't know how relevant they are to this issue), it seems that form 2000 to 2008, the volume of turnover had increased by 50%, but prices dropped by a few percent. The price drop seems to have started even earlier, in 2002. Since 2008 both prices and volume have dropped for a combined loss of 18% of turnover. So times are tough for toy shops overall.

All this together indicates to me that the current economic crisis has greatly affected gaming retailers. Together with structural changes like competition from other pastimes (computer games) and online shops challenging shop prices it is clear that the long term viability of brick & mortar game shops is in doubt.

8 comments:

  1. I probably wouldn't be in shops as much if my son didn't like it so much. Besides being able to see the boxes before buying he also likes other people being there, table being set out and all that.
    Still, I don't know how long it will last. Long, I hope, but niche markets will likely lead the way in bricks-to-bytes. I have to say that I figured that student cities like Leiden en Delft would have an above average number of gamers and that 2 specialized shops in Leiden wouldn't be too much.
    Having said that, somehow I think that the GW's and Waylands of this world have a better chance of being profitable, with GW having a better chance at a good profit but also a higher risk, being this specialized. GW is using a riskier model than they themselves may realize, I think.
    I really have no good idea though, just thinking from my armchair.

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    1. Well, as John Curry writes, even GW was on the brink in 2009 and needed drastic measures to come out on top.

      But it is indeed a tough job keeping ahead of the crowd, with such a small base. They need to draw new kids in, flog them for what its worth in a few years and then draw the new ones in. What would be the cycle of a typical GW gamer? 5 years? That is excluding the lifelong players.

      Which means you have to create new content every five years. Ind if it doesn't work, you are pretty much busted.

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  2. Interesting. My Sunday Sermon is going to be on the mess the hobby has gotten itself into in terms of Bricks and Mortar stores and the retail model it uses.

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    1. Well, let's see how many weeks I can keep ahead of you ;-)

      Again, looking forward to your point of view.

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    2. I'm coming at it from a slightly different angle. Primarily it was something I've been mulling around for about 5 months now. But the collapse of Maelstrom Games has sort of forced me to firm up the article. The hobby on one hand is in a rude state of health, never have we had so much exceptional product. Yet on the other hand it seems in more precarious a state than it ever has too. I've not too sure how we square that discrepancy and anomaly.

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    3. In that case I am anxious to see what you make of my two posts during the weekend. They are in response to a presentation by a guy from the Shut Up & Sit Down gaming blog that board gaming is going through a Golden Age.

      Like you, I agree that there's exceptional product coming out, but would argue the industry and the hobby are in a bad state.

      My way to square this anomaly would be to look at the structure of the industry. If this had been a typical market, development would have been in tatters. But many small (and part time) publishers hardly respond to market signals.

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    4. J my good man it seems like we're signing from the same hymn sheet to an extent. I asked a relatively big company once if they'd done any market research, or asked their customers there thoughts. Had that thought about the market they'd like to target and how they'd target them. All things I could help with. I even explained how. The look of startled confusion on their faces told me everything I needed to know. They just hadn't thought about any of it EVER. lol. I think they're better at it now, but at the time it was a bit of an eye opener for me. They were looking at the hobby from a sales funnel perspective, i.e. "GW bring lots of fresh meat into the hobby, and our aim is to pinch a small proportion of them" a sales funnel. They didn't have any understanding beyond that, or any idea which of GW's customers they wanted to pinch. I asked them what would happen if GW shifted their focus to recruiting different types of people... the answer I got was "we'd see a spike in sales!"... and then? Truly boggles the mind.

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    5. Great minds think alike, eh?

      But I can't blame small publishers and manufacturers not doing market research. It's expensive and not always good. If you're a part timer on a marginal business, is that where you will put your money?

      But big companies, with staff to feed in the long run, should not evade the question. But you will be surprised what kind of organisations lack first line market research and just a good image of who their target audience is.

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I appreciate comments. Let me know what you think!