Thursday, May 26, 2005

Death of Paper Gaming

Paper gaming. It's a term used to describe playing a game that basically, isn't a video game. In other words, the term refers to board games, card games and dice games.

Paper gaming is a billion dollar industry still, with brands like Monopoly, Sorry and Clue leading the way - and even Magic the Gathering chiming in around 200 to 300 million a year, depending on the popularity of its expansions in a given year.

Yet, despite that success, paper gaming is dying. Those who deny that, just simply are not looking at the numbers nor are they counting the number of brick and mortar game stores that are closing down year to year.

Here’s a classic example of where gaming is today: Sale of Baldur's Gate video games (which are a D&D branded set of games), outnumber the sale of the books by a healthy margin. Here’s another factoid: if the subscription numbers are true, then World of Warcraft brings in more monthly revenue, than paper D&D makes in one year - and of course with a higher margin to boot. The active player base between the two brands, probably favors World of Warcraft by a 15 to 1 margin.

The cost of goods on your average board game means it's almost impossible to make money with them. Even a brand with reasonably high exposure and recognition such as Axis and Allies, can't make the grade, and that's with prominent placement on a Toys-R-Us shelf.

Trading card games come and go like sailors at a brothel. The market is flooded with just about every intellectual property imaginable attached to a weak TCG mechanic. Yugioh rules this world at this stage and Magic will always be king, but other than those two, every other TCG is a dog (with the exception of Pokemon which treads water every year, much to the delight of the small faction that now runs the brand).

So what to do? Well sell your Hasbro and Mattel stock immediately. I'm not kidding, those companies will do nothing but atrophy as time goes on and Hasbro in particular still carries a fair amount of debt. The stock will spike occasionally after a good Christmas, but in the long haul these shares will atrophy.

If you are interested in making games (and what self-respecting nerd hasn't dreamed of creating a new game mechanic, publishing his own D&D adventure, or revamping some war game), then take a deep breath and consider wisely…

Even if you produce the greatest RPG book in the history of time and space, your ability to sell just 40,000 units will be extremely, extremely difficult. Now factor in your high COG and your low overall margin and ask yourself if the gamble is worth it.

Want to make a new TCG? Good luck, even with a multi-million dollar marketing campaign, tied to a kid's television broadcasting prominently on Saturday mornings, Duel Masters fell flat on its back and is poster child for the "swing and a miss" trend that is predominant in the gaming industry right now.

If you are a gaming retailer, the news is worse. A reasonably successful demand for the new D&D Miniatures, did almost nothing to benefit your average brick and mortar game store. Why? Well, a sizeable percentage of those miniatures are purchased online and through auction sites. Why pay 15 dollars for a 8 figure booster, when you can acquire a case at a 30% discount and then just resell the minis you don't need, back online.

Online purchasing mean the big boys eventually win, Amazon, Toys-R-Us and those boys will eventually win the online retailing game, e-Commerce has moved in that consolidated direction since the .COM bust back in 2000.

My friends, I hate to tell you this, but we are at the dawn of the final decade for paper gaming. In 15 years, Monopoly will probably still survive, but its volume will diminish severely. The board game section at Toys R Us will be reduced to the third of its current size. Trading card games will have new digital equivalents. Paper based role playing has faded already and within twenty years, relegated almost exclusively to retirement homes.

It's sad, but I also believe it’s inevitable. Until then, I'll pull out my MLB Showdown and leave my EA Sports X-Box games to gather dust on the shelves. There's just something about rolling a twenty sided die and then slamming the game board when Vernon Wells hits a homerun that no amount of console graphics can provide.

No comments:

Post a Comment