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Subject: Price protection and board games rss

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Gary Bacchus
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I've been in a lot of threads in the past and currently that discuss boardgame publishers and their methods of bringing their products to the market. I've noticed that the boardgaming community bristles at certain things and want to get a feel for what people think on one particular strategy that works in other gaming venues, but not in boardgaming.

Price protection is a sticky subject in boardgaming but is no big deal in other parts of gaming. Video gaming, CCGs, and other forms of gaming have their prices dictated by the manufacturer/platform provider and no one seems to mind. But, price protection appears to be shunned here.

So I took a crack at the old poll thingy and here's what popped out.

A brief clarification on question 1. Answer 3 implies no more purchases. Answer 4 implies no more hobby.

Poll
1. What would your reaction be if *all* boardgame manufacturers decided to implement price protection as part of their distribution strategy?
I don't care. The games are worth it.
Urk. It sticks in my craw. I'm not spending as much on gaming anymore
They're being greedy. No more games for me.
I'm disgusted. I'm giving it all up.
Other/I'm in two minds (discuss below)
2. Why do you think other gaming companies (not necessarily boardgame companies) protect prices?
Greed
Protection of brand
Protection of sales channels (protecting B&M)
Other/I'm in two minds/combination of above (discuss below)
      232 answers
Poll created by jakal323
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Travis Worthington
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Re: Price fixing and board games
I don't think that we will see manufacturers be able to dictate prices across the board for board games.

In video games there are a smaller number of much larger producers. A retail outlet can ill afford to miss a big title and so they agree to price floors for all of the titles from that company.

Mayfair was able to do this (for a while) because Settlers is a such a strong title - but others can't.

The cost of designing and producing a board game are far, far lower than a video game, so barriers to entry are much lower - thus board game publisher are and will continue to be smaller and much more fragmented.

Price floors do benefit Brick and Mortar more than anyone else. The publisher is getting paid as much with/without the floors, and if anything probably suffers from decreased sales that such a floor creates.
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Re: Price fixing and board games
The price:enjoyment ratio is a major reason I stopped habitually buying video games. So, I guess it depends on if the games are fun or not. I've been eyeing the big Splotter Spellen games for a while now, and if I had the cash to spare I'd snap them up -- but I'm also decently sure they'd stick with me for many more years and provide many more hours of enjoyment than a 20 hour video game.

I don't find price fixing to be an appealing practice, but if the games were worth it I'd probably still buy them (e.g., I'd consider spending $100 on Indonesia (and have, actually, many times) but not Dominion). On the other hand, I think I have enough games that I could never buy another one and still be happy (how many times are you going to hear THAT on this site?).
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Gary Bacchus
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Re: Price fixing and board games
T Worthington wrote:
I don't think that we will see manufacturers be able to dictate prices across the board for board games.

In video games there are a smaller number of much larger producers. A retail outlet can ill afford to miss a big title and so they agree to price floors for all of the titles from that company.

Mayfair was able to do this (for a while) because Settlers is a such a strong title - but others can't.

The cost of designing and producing a board game are far, far lower than a video game, so barriers to entry are much lower - thus board game publisher are and will continue to be smaller and much more fragmented.

Price floors do benefit Brick and Mortar more than anyone else. The publisher is getting paid as much with/without the floors, and if anything probably suffers from decreased sales that such a floor creates.


This is true. The platform (in the case of console games) also have some inputs into the price floors.

There are counter examples, past and present, in the gaming world. FRED/Eagle until recently and Games Workshop to date.

Personally, I don't see it happening either. As for the strength of a particular title, the ones that have made slight crossovers into mainstream may be able to set a very low price floor. I'm thinking games like Carcassonne & Ticket to Ride (though TTR may be a bit of a stretch).
 
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Re: Price fixing and board games
How about

1) Bringing profitability back to your FLGS if they can operate on the same price point

2) Allow (Indy) game producers to actually make some/better profit so more can do this full time?
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Erik Tietz
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Re: Price fixing and board games
It's not greed, it's pricing what the market is willing to pay. Do I think that Warhammer figures are insanely expensive? Yes. Obviously, many other people disagree because GW is still in business. "Too expensive" is in the eye of the beholder.
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Gary Bacchus
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Re: Price fixing and board games
chooche wrote:
How about

1) Bringing profitability back to your FLGS if they can operate on the same price point

2) Allow (Indy) game producers to actually make some/better profit so more can do this full time?


Point 1 is very well taken. I covered that in the 'protection of sales channel' option in the 2nd question.

Point 2 works part ways too. That would be very effective in direct publish & sales (which most independent game producers work on, right?). How about those independents who license their works to publishing companies (I'm thinking of Winsome as an example)? Would they be effected in the same way?
 
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Re: Price fixing and board games
chooche wrote:
How about

1) Bringing profitability back to your FLGS if they can operate on the same price point

2) Allow (Indy) game producers to actually make some/better profit so more can do this full time?

These sound like good aims. In not too savvy about this whole topic, but it would be nice if the hobby/euro game industry could become more stable and profitable somehow.

I have to think that bringing more gamers into the hobby can only help, by increasing the "size of the pie." This really seems like a very small niche market at the moment.
 
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Gary Bacchus
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Re: Price fixing and board games
tesuji wrote:
chooche wrote:
How about

1) Bringing profitability back to your FLGS if they can operate on the same price point

2) Allow (Indy) game producers to actually make some/better profit so more can do this full time?

These sound like good aims. In not too savvy about this whole topic, but it would be nice if the hobby/euro game industry could become more stable and profitable somehow.

I have to think that bringing more gamers into the hobby can only help, by increasing the "size of the pie." This really seems like a very small niche market at the moment.


From what I understand about the boardgaming business, there is a point in which more volume would eventually justify the cost to meet that demand, but it would have to be a huge jump.

Indeed, one big problem facing publishers is having aged stock. That's why there are often short, fixed print runs. That usually leads to occasional out of stock problems on popular (but not necessarily top selling) products, but the consumers (us) are willing to bear that. So, the companies can afford to be conservative.
 
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Re: Price fixing and board games
djcack wrote:
It's not greed, it's pricing what the market is willing to pay. Do I think that Warhammer figures are insanely expensive? Yes. Obviously, many other people disagree because GW is still in business. "Too expensive" is in the eye of the beholder.


It is important to note, though, that one reason that companies implement price fixing is to establish the "value" of their product. It's the classic expensive = quality idea that is ingrained into the consumer's subconscious.

There are many, many companies that are living very well from this concept.
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Re: Price fixing and board games
There are minimum markups in lots of industries. "Price Fixing" isn't a wholly accurate term as it implies something illegal.

Minimum markups are not a bad thing I do not think. In today's age with the internet and lots of stolen and counterfeit products minimum markups protect the industry as a whole.

There are lots of fly-by night companies setup just to whore out the marketplace, which makes reputable retailers have to lower their prices to a point it runs them out of business eventually.

Also, almost no place sells for MSRP anymore so the term means nothing. Originally MSRP was placed on the product to endure local stores were not gouging consumers, now it almost has the opposite effect; it gouges the retailer - no one is willing to pay MSRP though it is what the product was intended to be sold at, which is a fair market price.

As the internet retailers, deep discounters operating out the their garages and basements, counterfeiters and theives lower prices so even they barely make any money the brick-and-motar places will go the way of the dinosaur. Soon you will not be able to go out and buy a product locally - everything will have to be ordered off the interent. That sounds great for the consumer but it will eventually cripple the economy as millions of people lose retail jobs and the wages for the remaing workforce will plummet with the over-abundance of workers willing to do the job for next to free; its part of what is happening right now but it is hidden by much more glamourous "crisis".
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Re: Price fixing and board games
I chose "other" in the first poll, because I didn't see a good equivalent for my outlook. I have a fixed budget for entertainment - it's not going to change if board games are no longer available at a 40% discount off MSRP. So the effect on me would be that I would buy about half as many games a year as I do now.

Basically it would just shift my money away from the publisher (as they get the same per game whether I buy it full price or discount) and towards the retailer (who would then get a bigger margin on their sales). Obviously I prefer the status quo. I get more games this way, and I care more about supporting the publishers I like than I do about retail outlets.
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Re: Price fixing and board games
Superhawk2300 wrote:
There are minimum markups in lots of industries. "Price Fixing" isn't a wholly accurate term as it implies something illegal.

Minimum markups are not a bad thing I do not think. In today's age with the internet and lots of stolen and counterfeit products minimum markups protect the industry as a whole.

There are lots of fly-by night companies setup just to whore out the marketplace, which makes reputable retailers have to lower their prices to a point it runs them out of business eventually.

Also, almost no place sells for MSRP anymore so the term means nothing. Originally MSRP was placed on the product to endure local stores were not gouging consumers, now it almost has the opposite effect; it gouges the retailer - no one is willing to pay MSRP though it is what the product was intended to be sold at, which is a fair market price.

As the internet retailers, deep discounters operating out the their garages and basements, counterfeiters and theives lower prices so even they barely make any money the brick-and-motar places will go the way of the dinosaur. Soon you will not be able to go out and buy a product locally - everything will have to be ordered off the interent. That sounds great for the consumer but it will eventually cripple the economy as millions of people lose retail jobs and the wages for the remaing workforce will plummet with the over-abundance of workers willing to do the job for next to free; its part of what is happening right now but it is hidden by much more glamourous "crisis".


That was an unfortunate choice of words on my part as the OP. I was using price protection and price fixing interchangeably. Really, the concept is the same but the latter does imply something unwholesome.
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Re: Price fixing and board games
chooche wrote:

2) Allow (Indy) game producers to actually make some/better profit so more can do this full time?


You think that having all stores sell at full retail might mean better profit for Indy publishers? I'd expect the opposite effect. I would think that there would be less quantity sold of each given game if some people don't buy at a discount.

Also, changing the retail margin wouldn't necessarily effect the wholesale margins so I doubt publishers get much out of setting a floor on what their products go for.

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Re: Price fixing and board games
Spielguy wrote:
chooche wrote:

2) Allow (Indy) game producers to actually make some/better profit so more can do this full time?


You think that having all stores sell at full retail might mean better profit for Indy publishers? I'd expect the opposite effect. I would think that there would be less quantity sold of each given game if some people don't buy at a discount.

Also, changing the retail margin wouldn't necessarily effect the wholesale margins so I doubt publishers get much out of setting a floor on what their products go for.



Some indy producers do a lot of direct sales as opposed to going through the more traditional distributors scheme. You'll see a lot of the "micro-niche" publishers (like Deep Thought Games) do this because the overall volume is tiny. This almost doesn't apply to this situation.

In the case where the indy producer is going through a distribution channel or is publishing through a 3rd party, I have to agree with you. What benefit would be gained other than a possible protection of the brand image?
 
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Re: Price fixing and board games
jakal323 wrote:
Spielguy wrote:
chooche wrote:

2) Allow (Indy) game producers to actually make some/better profit so more can do this full time?


You think that having all stores sell at full retail might mean better profit for Indy publishers? I'd expect the opposite effect. I would think that there would be less quantity sold of each given game if some people don't buy at a discount.

Also, changing the retail margin wouldn't necessarily effect the wholesale margins so I doubt publishers get much out of setting a floor on what their products go for.



Some indy producers do a lot of direct sales as opposed to going through the more traditional distributors scheme. You'll see a lot of the "micro-niche" publishers (like Deep Thought Games) do this because the overall volume is tiny. This almost doesn't apply to this situation.

In the case where the indy producer is going through a distribution channel or is publishing through a 3rd party, I have to agree with you. What benefit would be gained other than a possible protection of the brand image?


It could mean that more B&M stores are likely to carry small publisher games - as it stand right now its more of an exception that retail stores carry anything but big name games.

More Indie games in stores, means more visibility and more sales. Visibility is a huge factor for a small board game publisher (such as myself), and in the scheme of things even the bigger hobby game publishers (like RGG and Z-man) are pretty small.
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Re: Price fixing and board games
Superhawk2300 wrote:
There are minimum markups in lots of industries. "Price Fixing" isn't a wholly accurate term as it implies something illegal.

Minimum markups are right in there with price fixing - when done by an industry oligopoly, they are illegal under anti-trust law. It's industry collusion to disadvantage the consumer, same as price fixing. Calling it something different doesn't change what it is.

If manufacturers need counterfeit protection, that's what copyright and trademark law are for. But, really, is there some huge problem with people selling counterfeit copies of Arkham Horror, Munchkin, or Space Hulk online? I'm willing to believe it if someone can link a source with some numbers.

Quote:
Also, almost no place sells for MSRP anymore so the term means nothing. Originally MSRP was placed on the product to endure local stores were not gouging consumers, now it almost has the opposite effect; it gouges the retailer - no one is willing to pay MSRP though it is what the product was intended to be sold at, which is a fair market price.

I laughed out loud at this one.

Just the other day, I went to FLGS to go buy a copy of Dominion. They were sold out. But guess what? EVERYTHING was marked to MSRP. This has been my experience at all of the game stores in this area I've been to. (And before I hear about the "great service" I was getting, these guys were far more interested in policing the horde of MtG players and talking with their buddies than actually assisting me.)

Also, in what universe does MSRP set the fair market price? Simple microeconomics: supply and demand sets the market price (which is, by the way, socially efficient in a market with perfect competition). Maybe MSRP correlates to this price on a rare occasion, but I'd be willing to bet that it is a grossly inefficient price 95% of the time.

Quote:
As the internet retailers, deep discounters operating out the their garages and basements, counterfeiters and theives lower prices so even they barely make any money the brick-and-motar places will go the way of the dinosaur. Soon you will not be able to go out and buy a product locally - everything will have to be ordered off the interent. That sounds great for the consumer but it will eventually cripple the economy as millions of people lose retail jobs and the wages for the remaing workforce will plummet with the over-abundance of workers willing to do the job for next to free; its part of what is happening right now but it is hidden by much more glamourous "crisis".

Let's stop developing better technology and more efficient business practices because it'll put people out of jobs? I think that is a completely untenable long-term position.
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Re: Price fixing and board games
I'm confused that anyone would answer "greed" for the second question; much more so that there is currently a plurality of people voting this way. If we assume publishers get paid the same regardless of final customer price, greed dictates that they keep customer prices low and sell higher volume. Are people voting on the thin-margin video game market, I suppose?

I'm all for allowing publishers to enter contracts with distributors and retailers. If we were in a monopoly-prone market my feelings might change, but we aren't anywhere near that at the moment.
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Re: Price fixing and board games
erwos wrote:
Superhawk2300 wrote:
There are minimum markups in lots of industries. "Price Fixing" isn't a wholly accurate term as it implies something illegal.

Minimum markups are right in there with price fixing - when done by an industry oligopoly, they are illegal under anti-trust law. It's industry collusion to disadvantage the consumer, same as price fixing. Calling it something different doesn't change what it is.

If manufacturers need counterfeit protection, that's what copyright and trademark law are for. But, really, is there some huge problem with people selling counterfeit copies of Arkham Horror, Munchkin, or Space Hulk online? I'm willing to believe it if someone can link a source with some numbers.

Quote:
Also, almost no place sells for MSRP anymore so the term means nothing. Originally MSRP was placed on the product to endure local stores were not gouging consumers, now it almost has the opposite effect; it gouges the retailer - no one is willing to pay MSRP though it is what the product was intended to be sold at, which is a fair market price.

I laughed out loud at this one.

Just the other day, I went to FLGS to go buy a copy of Dominion. They were sold out. But guess what? EVERYTHING was marked to MSRP. This has been my experience at all of the game stores in this area I've been to. (And before I hear about the "great service" I was getting, these guys were far more interested in policing the horde of MtG players and talking with their buddies than actually assisting me.)

Also, in what universe does MSRP set the fair market price? Simple microeconomics: supply and demand sets the market price (which is, by the way, socially efficient in a market with perfect competition). Maybe MSRP correlates to this price on a rare occasion, but I'd be willing to bet that it is a grossly inefficient price 95% of the time.

Quote:
As the internet retailers, deep discounters operating out the their garages and basements, counterfeiters and theives lower prices so even they barely make any money the brick-and-motar places will go the way of the dinosaur. Soon you will not be able to go out and buy a product locally - everything will have to be ordered off the interent. That sounds great for the consumer but it will eventually cripple the economy as millions of people lose retail jobs and the wages for the remaing workforce will plummet with the over-abundance of workers willing to do the job for next to free; its part of what is happening right now but it is hidden by much more glamourous "crisis".

Let's stop developing better technology and more efficient business practices because it'll put people out of jobs? I think that is a completely untenable long-term position.


I understand your point, but some of it's not really based on reality. Smacks of macroeconomic theory. Robots buying and selling from other robots and all that.

The world simply doesn't render down to a mathematical equation and complicated charts. It would work in the fashion you state if only people weren't running the show.

My thought about MSRP was that it was a manufacturer's attempt to add value to the product. It's without a lot of external basis, but there it is.
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Re: Price fixing and board games
Bwian wrote:
I'm confused that anyone would answer "greed" for the second question; much more so that there is currently a plurality of people voting this way. If we assume publishers get paid the same regardless of final customer price, greed dictates that they keep customer prices low and sell higher volume. Are people voting on the thin-margin video game market, I suppose?

I'm all for allowing publishers to enter contracts with distributors and retailers. If we were in a monopoly-prone market my feelings might change, but we aren't anywhere near that at the moment.


This goes along with a theory I've held for a long time. For some reason, there is a rash of extreme price aversion in the boardgame community. Moreso than a lot of consumer groups. I've always wondered why it is that way and am still looking for an answer.
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Re: Price fixing and board games
If they did that, I couldn't afford anymore games and would just enjoy the 200 others I already have,
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Re: Price fixing and board games
MWChapel wrote:
If they did that, I couldn't afford anymore games and would just enjoy the 200 others I already have,


Did what? Implemented price protection? No matter where the price floor was, the cost would be too much?
 
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Re: Price fixing and board games
jakal323 wrote:
MWChapel wrote:
If they did that, I couldn't afford anymore games and would just enjoy the 200 others I already have,


Did what? Implemented price protection? No matter where the price floor was, the cost would be too much?


Easy. I refuse to pay more than $50-60 for a game. At the moment I can get games "online" for that price point, in my FLGS I cannot. If they force the online to sell for the same price point as my FLGS. Then I won't buy.
 
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Re: Price fixing and board games
I will have to add my disagreement with the term "price fixing." The majority of what people are calling price fixing (on BGG) would be more accurately called "minimum retail pricing" (as exemplified by Mayfair Games). And this is not "price fixing" (as either the law and common usage defines it, IMO).

As others have pointed out, this "minimum retail price" does not give the publisher any direct increased profit. The thinking is that if retailers can make a guaranteed minimum profit, they will be able to develop their market better, bring in more consumers of the product, and increase the overall sales.
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Re: Price fixing and board games
BillF wrote:
I will have to add my disagreement with the term "price fixing." The majority of what people are calling price fixing (on BGG) would be more accurately called "minimum retail pricing" (as exemplified by Mayfair Games). And this is not "price fixing" (as either the law and common usage defines it, IMO).

As others have pointed out, this "minimum retail price" does not give the publisher any direct increased profit. The thinking is that if retailers can make a guaranteed minimum profit, they will be able to develop their market better, bring in more consumers of the product, and increase the overall sales.


Yup. Sorry about that. I realized what I did by interchanging price protection and price fixing a bit earlier in the thread.
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