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Excerpt from an email from Alliance Game Distributors:

March 7th, 2012 Vaudreuil-Dorion, Québec, Canada

Z-Man Games appoints Alliance / Diamond as Exclusive Distributors for the US Hobby Market.

Z-Man Games, the publisher of award-winning board and card games, has entered into an exclusive distribution agreement with Alliance Game Distributors and its parent company Diamond Comic Distributors. Effective immediately, Alliance and Diamond become the sole distributors of Z-Man Games products to hobby retailers in the United States of America and its territories.

Z-Man Games will continue to work directly with its current distributors for the rest of the world and these relationships remain unaffected by this agreement.

“In our view, an exclusive agreement is a better business model in some markets to insure that the games we publish get the necessary marketing efforts they deserve,” said Z-Man Games CEO and President, Sophie Gravel. “This added effort will benefit not only our own games, but also the games our foreign partners entrust into our care for the English language market. The cost of duplicated effort in shipping, warehousing and customer management was significant and did not make much business sense. Consolidating efforts with Alliance will give us back time and resources to concentrate on what we do best: publish great and unique games.”

Tom
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Vast Aire
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So what does this mean as a bottom line for customers? Z-Man game prices start going up due to the exclusive distributorship?
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Chris Ferejohn
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Cannibal Ox wrote:
So what does this mean as a bottom line for customers? Z-Man game prices start going up due to the exclusive distributorship?


The implication in the press release is that they will go down due to saving money (or at least their costs will). But yeah, I'd like to hear from someone in the industry what effects we may see from this (if any).
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I don't like how Diamond handles comic book distribution. They spent the last couple of years essentially driving small companies under by listing their upcoming comics and then refusing to distribute them, even though there were pre-orders and many times the comic had already been printed. Meanwhile, their excuse was that by giving preferential treatment to the big companies and basically screwing the small ones, they would keep the comic book industry alive and healthy. angry
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This isn't good for the consumer. It's great for Alliance and perhaps Z-Man, but I've already seen what happens to prices once a game company seals a deal with Alliance/Diamond.

I'm not really thrilled with how Z-Man has been operating post-acquisition anyways. Sad to see Zev's pride and joy mismanaged like this.
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I'm not sure what to make of this news, but thanks for posting it, Tom.
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Paul DeStefano
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Tom -

How do YOU feel about this?
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David Boeren
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+1, I think a retailer's opinion on how this will affect the market is more valuable than a bunch of people armchair theorizing about it.
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ICv2 article on the subject: http://www.icv2.com/articles/news/22342.html

What's funny to me is that any time you see one of these announcements they talk about it freeing them up to do more marketing and event kits with retailers, but I've yet to see any of these come to fruition in my local FLGSs. If anything it means you're less likely to see titles from that company on the shelves, and definitely no demos or promos...
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Paul DeStefano
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maelic001 wrote:
marketing and event kits with retailers, but I've yet to see any of these come to fruition in my local FLGSs.


Where do you think all those posters come from?
 
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Geosphere wrote:
Tom -

How do YOU feel about this?


I think Tom has said before when Playroom and Days of Wonder did it that it is convenient for retailers.

edit: tom responded below
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Geosphere wrote:
Tom -

How do YOU feel about this?


I too would like to hear his opinion, but given Alliance's draconian methods, I didn't want to put Tom on the spot and pressure him into making disparaging comments about Alliance/Diamond if he does business with them and would like to continue doing so. Things posted on the Internet have a nasty way of sticking to the tape and being used against you somehow. I wouldn't put it past Alliance.
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lfisher wrote:
Geosphere wrote:
Tom -

How do YOU feel about this?


I think Tom has said before when Playroom and Days of Wonder did it that it is convenient for retailers.
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Hopefully this doesn't get to be as bad as the Game Salute bullshit.
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Dennis Shaper
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I don't know, would it be smart to give an opinion yet if it is negative?
He wouldn't want to start any trouble prematurely.
 
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Since when have I steered away from trouble?! devil

My preference would be that things stayed as they were, though Filosofia was not doing a particularly great job of handling Z-Man.

In the end this actually does have a small benefit for us, but as in all things, less choice is not usually a good thing (unless of course it's a Boards & Bits Exclusive ).

I have *never* said that this is more convenient for retailers, quite the contrary. I have said that it is more convenient for publishers. For retailers, forcing us to use a particular distributor is most annoying (and I told my Alliance rep so, and he understands...he still doesn't feel sorry for me, though )

In our case it will mean an increase in our Z-Man prices, but we've had a great discount on Z-Man games for quite some time. I guess all good things DO come to an end (except Leonardo da Vinci shake )

Tom
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Lee Fisher
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Thanks for clarifying, Tom. I probably just read too much into your quip over here.
Re: Playroom Goes Exclusive With ACD in the USA
 
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lfisher wrote:
Thanks for clarifying, Tom. I probably just read too much into your quip over here.
Re: Playroom Goes Exclusive With ACD in the USA

I think you did

Especially with the ACD exclusive of Playroom Entertainment, now you have 2 different distributors, each with exclusives. This pretty much guarantees we have to use at least 2 different distributors or not carry someone's exclusive products

Then there's the issue of whether or not you *ever* wanted to deal with the distributor, now being forced to work with them (note that this is not a comment about either distributor, just an observation).

Tom
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cferejohn wrote:
The implication in the press release is that they will go down due to saving money (or at least their costs will). But yeah, I'd like to hear from someone in the industry what effects we may see from this (if any).


Prices definitely did not go down when WizKids did this with their line (including HeroClix) in 2007. In fact it ended up several online retailers, and more than a few brick and mortar, dropped their product line completely. Not too long after, WizKids folded. After a hiatus, the product line was sold to Neca - which added direct to retailer sales to their distribution model, so apparently they did not think an exclusive deal was the right decision.

Now WizKids had definite bottom line problems prior to their exclusive Diamond/Alliance deal, so it is highly unlikely it was more than a slight impact negative or positive to their long term prospects. But many online stores got out of the business afterwards, and several brick and mortar stores I talked to indicated that their price point had gone up (some of them stopped carrying the product line, all at least dropped their order quantity).

In addition there were numerous stories of product orders being shorted, although this is a general problem particular to collectible games more than board games. But in at least two cases product releases were declared "sold out", yet order shorted retailers were offered the chance to buy "unavailable" products at inflated prices by Diamond/Alliance. Until finally large quantities of supposedly "sold out" product started showing up on the secondary market at a discount. Smacking very highly of an attempt to create an artificial shortage for price gouging purposes.

I can't make any definite claims as to whether the cost of Z-Man products will go down, and/or whether such a savings would be passed along to the end consumer. I just know that after the last such decision I remember by a game company the exact opposite happened - costs went up and supply availability diminished.
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99.9% chance that prices will *not* go down because there is no reason. Alliance doesn't have to compete, and Filosofia will make more profit due to less overhead.

Everyone wins, right? shake

Tom
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Why would the savings be passed onto the end customer? Do you really think a bunch of suits from Z-Man/Filosofia and Alliance sat around a boardroom and said "You know what, we really need to find a way to lower boardgame prices for our customers."?
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Got to agree with Tom; this trend isn't doing us retailers any good.
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I suppose it means that the pressure is on Z-Man to continue to produce compelling games that players want enough that they will pay an added premium for them. If their games fall short, and get mediocre reviews here and elsewhere, it will hard for them to sustain the higher prices, as there are a lot of other good games out there for which people can spend their hard earned cash.

Another message brought to you by...

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Assuming Alliance / Diamond delivers, then regarldless of customer prices assuming they don't go up, what is wrong with a company consolidating ?

If you were to start your company and make acquisition with time, your objective would be to maintain your position in the market and stay healthy financially, and possibly grow, right ?

The guys at Filosofia are passionnate about delivering quality games.

So there must be a sensitive business justification, especially to remain competitive. That being said, I trust that ripple effects coming from the acquisition of Z-Man are likely to come to an end and streamlining the distribution process is likely to help them maintain a good stream of new quality games in the future.

Again, I trust them for their decision and before flaming them, I would encourage to observe how things will go from now and in the end contact them directly if you are running into a degrading sitation.

My 2 cents.
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Yeah, the issue is Alliance/Diamond. I would be willing to bet that one could ask retailers of their opinion and the overwhelming majority would say they aren't doing business with Alliance by choice, but by necessity to keep the games their customers want and expect, in stock. You either don't stock Z-Man games and lose those customers, or get your stuff through Alliance and get their distribution issues and crappy prices. Without competition, Alliance can set whatever terms they want and the more companies there are that sign exclusivity deals, the more likely game stores are going to feel forced to bite the bullet and do what they gotta do to keep people shopping at their store vs. a competitor.
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