The most recent issue of Comics & Games Retailer, the sole trade magazine for the industry, arrived in the mail yesterday.
This is the “State of the Gaming Industry” issue — and I figured I’d post some summary and comment here, since if I do it at any of the usual gaming fora, I’ll be shouted down by wishful-thinking uninformed gamers, who seem to feel that any statement of how bad the industry is doing is somehow an attack on their very identity, and hence argue the contrary with all of the reasoned and logical thought that you’d expect from a Relgious Fundamentalist.
C&GR is flawed, to be sure, since it relies primarily on estimates based on a self-selecting sample, but, as I’ve said before, it’s the best thing we’ve got, and I’ve seen no major indications in my 10 years of reading it that it has ever been too far off the mark.
So, how’s the industry doing?
Let me answer that by giving you the titles of the main analysis article in the issue:
“2006: Extinction-level Event.”
Articles on various facets of the industry (distribution, freelancing, retail) are sub-titled: “That which does not kill us makes us stronger,” “A hard year, but we’re still here,” “Freelancing in interesting times,” and “A glass half empty is still a glass half full.”
Are you getting the picture here?
Here are some sobering quotes from the main analysis, by James Mishler:
- “In 2004, the adventure-game industry lost 25% of its core game stores to closures, mergers or diversification. Over 2005, our estimates put the loss at an additional 20% from the number we stood at in January 2005. From 2000 core stores in January 2004 to 1200 core stores in December 2005 represents an overall loss of at least 40% — two out of every five stores that were with us two years ago are gone today. In addition to stores lost, the last year has seen dozens of role-playing game publishers close up shop, perhaps 25% of all game companies all told — albeit mostly d20 System publishers — even though that “shop” was often nothing more than a section of the garage at home. And we lost one major distributor, as well as at least one fulfillment house.”
- “Trading card games had a down year –down by about 11% — but not severely.”
- “Collectable miniatures game sales were down only 4% in 2005 [….] Traditional miniatures sales declined, especially Games Workshop sales, which were reportedly down as much as 20% in 2005.”
- “Role-playing games were the hardest hit in 2005, with sales dropping around 45% Yes, you read that right, that’s forty-five percent.”
- “the d20 glut is behind us, but so are the sales that came with that originally, and so are the wide variety of products that simply no longer exist to sell, were there anyone to even buy them. While some game lines hae developed to fill the void left by d20, not nearly enough new games have been released to fill that broad and deep loss. Third, of those games that are coming out, a lot of retailers, burned by having too much, decided that a very tight inventory was a better policy — and of course, you can’t sell what you don’t have. Finally, of those publishers that remain, many have reported astounding, record-breaking sales on their direct-to-consumer websites.”
- “Essentially, there are fewer role-playing games, retailers are not stocking them, and consumers are going to web to find them — in print or in PDF. These sales, my friends, are yours to lose. That’s what’s been happening in the last year.”
Those last two items are of particular interest to me and my company, Adamant Entertainment, because it confirms my experience over the past year — the print side of the industry is in a fucking tailspin, but there are consumers out there, and given that it is now possible to reach them directly, we’re seeing our sales go higher and higher every month, as more and more gamers realize that their local store (if they even have one any more) isn’t carrying what they want, and so they look online for it.
In my seminar at the GAMA Trade Show, I mentioned the October 2004 issue of WIRED, which talked about “The Long Tail.” To put it simply, it talks about the fact that for every niche interest, no matter how obscure, there are always folks out there interested in it, who represent a consumer base. Taken in a traditional distribution model, these people are far too little to make marketing to them worth the effort — however, with the internet and direct-to-consumer delivery, these people can be aggregated into a collective who are able to sustain a business. The term “The Long Tail” comes from a graph of interests, where the mainstream interests (top selling records, blockbuster films, etc) are a large chunk, and the niche interests (indie music, documentaries, etc), trail off in a long tail from that chunk:
The interesting thing is, that tail never reaches zero. There is always someone out there.
That’s the model that Adamant is operating on. Direct-to-consumer is going to be the future of most entertainment media, and I think that gaming is no exception. Those of us who have already made that leap are enjoying success….while folks stuck in the old model are suffering through year after year of declines which continue to cripple the industry.
That’s pretty much what I have figured out too. And if you compare that with the kind of money talked about in the RPGnow “State of the Industry” PDF from a short while ago you can see that direct and PDF sales do have money in them — just not the tens of millions that the general industry used to have in its “glory” years.
-45%? Whoa! That’s a substantially larger drop than I expected (which was around -25%).
CU
Couldn’t agree more, which is why I launched my direct-to-consumer model. It’s a little more feudal than most, since I’m relying on patrons to pay a commission in exchange for the right to give design instructions, but it’s working so far.
The long tail is one of those articles that made me rethink my whole approach to freelancing.
I also have to wonder how much of the loss is due to the business practices of the companies/publishers involved. I know at least with GW, I’m suprised it was only 20%. They were doing everything they could to keep from supplying direct market stores. Over the course of a year at the shop I worked at before moving, they raised their minimum order amount while lowering their discount several times. We’d have to place an order of at least $800 for them to even talk to us, and then it would come down to what distributors might have in stock. So customers would leave empty handed because we couldn’t over-order on product that sporadically sold, and even if a store could deal with GW’s demands and still manage to thrive, it was like they were doing their market research for Games Workshop and they’d open a store across the street from the shop they were giving such a hard time to. Stores would only deal with that for so long and several made a point to only get what the distributors had on the shelf, lowering the amount of what they carried over time.
Meaning :) that I can’t see how people are suprised that pdfs and direct availablity outside of an actual store are taking over the market. It just sucks that the industry both from a publisher and a distributor sense are stacked against the brick-and-mortar retailer, even tho it’s the shop that usually gets the blame when they fall short or close.
Are these US figures or worldwide figures?
It’s pretty much the same thing; five years ago, the US RPG market was about 90% of the global English-language RPG market. These days, if it’s lost nearly half its stores, it might be down to 80% or 82% of the global RPG market, but the remaining non-US sales aren’t really enough to make a significant difference to the general tale of doom & gloom.
I still think what we really need is to get Jack Thompson’s attention away from video games ;)
Thanks for sharing this.
A lot of people are forgetting that GW sales slump is likely due to the end of the LotR cash-cow they were riding. No more movies = diminished sales for hobbits.
Great summation, Gareth. It pretty much echoes what I’ve been saying privately to a few small publishers for about a year now. Nice to know someone agrees with me. ;-)
True, But I think the LOTR line was what kept the drop from being more than 20% :)
This is definitely in line with what I’ve been experiencing. Online sales are definitely the way things are moving. Over at Silven, we’ve experienced our best sales over the last year because of a huge increase in online transactions. We are still planning to put many of our publications in print, but are definitely not going to decrease our online output.
I agree that smaller companies probably should switch to direct sales. The only issue being getting the word out to prospective customers. For every gamer looking for gaming books online, there’s 10 that only go online to play World of Warcraft. If the LGS go away, a lot of the new blood just won’t come in. The hobby will get older and smaller with each passing year.
I know the MMORPG market’s suffering pretty badly as well. Some are playing WoW still, but nowhere near the glory days of EQ at it’s peak a few years back.
Wow, that looks like a pretty official graph. You can tell by the labeling of the axis, and the specific intervals.
I actually blame d20 for this.
Before WotC made d20 we had Rolemaster, Hero, GURPS, etc. Now that WotC has had their little money run, the gaming industry is in tatters. I know that there are other factors in there, like the new hippness of geek culture, but WotC made this worse.
You have seriously lost your mind with this comment.
WoW has MILLIONS of regular customers. MEEEEEEELYUNS.
EQ was good… but it NEVER had this kind of business.
Re: I actually blame d20 for this.
D20 brought me back to D&D.
D20 brought pen and paper RPGS to console systems with KOTOR.
You can blame the messenger all you want, but the only thing that is killing RPGS, in my opinion, is the viable options for less time-intensive fantasy. Pen and paper RPGs are hard work… Oblivion is not.
Of course, there are those of us who are happy with our old RPGs and don’t see the need to get another bookshelf to store more games that we don’t have enough time to play. :-D
World of Warcraft has been outdoing Everquest’s peak (just over 500,000) since December of the year it was released. And on March 1, WoW reached 6 million subscribers.
Six MILLION.
I would definitely say MMORPGs are doing great, and that they’re a big reason for traditional gaming’s downward slide.
not so fast
Your analysis using the “long-tail” graph is flawed. Specifically, if the graph were to hold true, it would imply a huge buy-in by consumers at the opening of the new “thing” (in this case, RPGs). This was not the case….RPGs have been around for more than 30 years. If your use of the graph were accurate, that would mean the best sales of the gaming industry were around 1976-77 and have been steadily declining ever since.
It’s more likely that the market has expereinced a series of sales spikes and hikes around the release of specific products, new companies with innovative tactics, or market synergies (e.g….games being released after major media events). The slow growth of the market until 2nd edition AD&D, the glut of TSR products in the late 80s, R.Talsorian and its Cyberpunk line, the dramatic entrance of White Wolf into the major gaming market after the release of its Vampire line, all of these created big spikes in the gaming market.
The rise of WotC was nothing new in this regard. They took an innovative product (Magic: the Gathering) and were able to take the sales from that, purchase TSR and innovate once more with the d20 system. The dip in sales we’re seeing now is the result of market saturation after one large-scale producer (WotC) dominated the market and capitalized on their consumer base (MtG players) until they outgrew the new product made by their old favorite producer. The now-older Magic players have moved on to other activities that Fark.com perhaps accurately describes as “girls and beer”.
RPGs are leaving the realm of the gekky fad and returning to realm of the geeky specialist. The only thing wrong with that is in the eyes of those who took advantage of the market surge and are now left feeling panicky.
~
Re: not so fast
Um, you seem to misunderstand the graph. That wasn’t a graph of sales vs time, that was a graph of how interests are distributed. It doesn’t say anything about when peaks in sales should occur.
The 3.5 edition of D&D was a big catalyst for this downturn (which would have happened to one degree or another anyway).
EQ had millions. I’m just finding that there was a “boom” of MMOs out there, and many people are tiring of them.
Find me hard facts, then we’ll talk. I’m going by the fact that at once point EQ had almost 50 servers with 2000-2500 people per night constantly.
That’s 100,000 – 125,000 active players at all times. Millions of accounts.
It was quite a bit over 500,000, but okay.
The reason MMORPGs are hurting traditional gaming, is that it’s letting people who are anti-social play games where before they were forced to be in rooms with other anti-social people (and cheetos).
Re: not so fast
Right. I was deliberately conflating the two. The point is the graph is still inaccurate as a representation of the gaming industry, interests or sales.
~
Actually as I remember it, EQ’s peak was 500,000 active accounts. I believe EQ’s moved something like 1.5-2 million units… Total. Compare that to WoW’s 6 million active accounts.
I really think World of Warcraft is a large factor in the seeming downward spiral of gaming over the last year.
Well here in Mobile, Alabama, there were 2 FLGS’s. One of them went out of business because the guy running it was a total jerk. Then slowly over the years, our only other FLGS starting to become a jerk, and is rapidly loosing business. They now refuse to order any book that isn’t d20, because they make more money selling cards and charging for tournaments, and giving out crap prizes (woohoo, I pay $30 to win a rare card and a $10 pizza hut coupon, yay).
In my times of going to these stores, meeting people, and then finding more gamers in college, I esimate that with the new jerk status of our only FLGS, over 500 (buying consumers) lost. I know circles of gamers here that just order online or have decided to continue just using the books they have.
And lest we forget how MMO’s have sucked the souls of many old-RPGers as well as would-be RPGers. I know a number of RPGers that experienced terrible groups and don’t bother anymore with tabeltop and just play WoW or EQ.
I have to agree with
With the fact that we have Videogames, books, movies, and well…your local bar, to take up your time, it’s not really surprising that the RPG market is having a down turn. Not that these things didn’t exist before, but the RPG market hasn’t had anything fresh in quite some time. In the 80’s we saw the end of first edition, and the beginning of 2nd edition. In the nineties we had whitewolf, and in the late nineties, early 2000’s we saw the release of 3e.
Now in the mid two thousands we are seeing the same thing that happened just before the release of 3e, the market is suffering, and just like with what happened back then, every one is blaming the previous market leader. (I remember the words “White Wolf killed Role playing” coming out of my mouth just before the release third edition.) The market is hurting because there hasn’t been anything new It’s alright though, these things are cyclic, the market will have an upswing eventually, we just need to have someone do something that hasn’t been done since the release of third edition, innovate.
to all those arguing….
GO GET LAID AND GET OUT OF UR PARENTS BASEMENTS
Attribute GW’s piss poor business practices to their loss. If they hadn’t done such a good job of alientating players, people would still be buying their product.
I figure that once Warmachine and Battlefront work out their supply issues, the numbers on miniature sales will rise.
Hard to compete with MMORPGs, or even ‘traditional’ video games.
BTW: You’ve been farked…
Gareth, this post just showed up on FARK, so you’ll probably see a lot more replies like our articulate friend up there. You might wanna consider locking comments out for a while, just to keep it from getting real nasty.
I think that’s a little off.
When I was younger, and my friends and I didn’t have so many commitments like families and jobs, it was easy to get together once a week to play D&D, Shadowrun, Torg, or whatever game our DM decided to inflict on us that night. As we grew older and got more responsibilities, it became harder and harder to coordinate one night a month, let alone a week, where we could all get together.
MMORPG’s, however, allow people like us to hop online and play whenever we want. It doesn’t matter if the whole gang isn’t on. Hell, it doesn’t matter of only one of the gang is on, you can always find more people.
The younger crowds that are growing up with computers are naturally drawn to the MMORPG genre, both because it’s on the computer that they’re used to, and they’re not getting any exposure to pencil & paper RPG’s.
There’s also the fact that many of today’s kids totally lack the imagination and intelligence to enjoy a pencil & paper RPG. If there’s not an online walkthrough and cheat code list, they’re not interested in playing.
Re: to all those arguing….
1. It’s called a discussion, not arguing.
2. Fix that sticky capslock key.
3. Learn to spell.
MMOs are doing excellent. In fact, game publishers have been on a move to snatch up any potential MMO projects that may prove to sll, particularly those that can cater to niche markets(ex. steampunk MMO). Regardless, I am only talking about video games….
As i’ve been going through these comments, yours was one of the closest to what i’d been thinking.
I’d been involved in a halfway decent tabletop D&D group for a while, just recently, but it fell apart. Unless we were hacking and slashing on some rather linear dungeon crawl, half the party just kinda went into screen-saver mode. “aw, more role-playing? plot?! PROBLEM SOLVING!!?! *yawn* wake me when we find another monster.” The thing is… that’s the only group in the area i’d been able to find.
There are good players out there, i just can’t FIND enough to get together with on a regular basis.
Before you lock comments, I’d like to add my .02. Gaming as an industry has always been toward the end of the long tail, but I can’t see any reason why it can’t continue to show some improved growth, especially in this time of bread and circuses. People are turning away from non-interactive entertainment as being too limited, and/or not having enough choices. Gaming is a natural for those to turn to, but for the image of lonely geeks in their parent’s basement. We need a bit of PR work, it seems.
I disagree about 3.5 being a money-grab, thought it may well have turn a noticeable portion of the DnD community from keeping up with the new and shiny.
I blame it on MMORPGs and other console/computer games. Pen and paper RPGS and those games have, traditionally, the same audience.
/from fark
//yay fark!
///yay slashies!!!
Re: I actually blame d20 for this.
Yes, the D20 Over Hype was part of this, as it had specifically been designed to be a poisoned pill for the industry as originally planned and marketed.
But, Hero and GURPS are still out there and being published, problem is that the distribution system is so very messed up these days that getting product from publisher to store shelf is no easy matter and very expensive. The Markups and share of the money taken by the the distributors and retailers has continued to climb while the publishers take a hit.
That’s why a lot of the publishers are doing more direct sales – cutting out those middle men means more cash in their pockets.
Not that the retailers have it easy, real estate in urban areas has been thru the roof for the past 4 years, and that means higher rents and a need for more turnover per sq foot of stock needed to pay the bills.
Gaming is a small specialized retail market with some cost overheads that make it hard when they have to compete for space with things like a Starbucks that might want their space.
FARKED
This link made it on Fark, so you poor souls are likely to see more respones like the idiot before…
But, on the industry, this is no surprise to me. Its been something I’ve been watching develope for a time now. GW really doesn’t shock me at all. With their marketers withdrawing from the big cons to run their GamesDays, and the amount of cash they arte expending for said GDs they aren’t drawing alot of new crowd. They will likely become more like the Historicals market if they continue with this trend. Plus computer stratigy games don’t cheat, or load dice… nor are there rules arguments. Which was half the reasons we had people quit playing GW in our area and got to playing the stratigy game on their computers
Farking hell
nzsnyder, what you’ve just said is one of the most insanely idiotic things I have ever heard. At no point in your rambling, incoherent response were you even close to anything that could be considered a rational thought. Everyone in this room is now dumber for having listened to it. I award you no points, and may God have mercy on your soul.
Now in terms of gaming I would defintely have to agree that WoW and its ilk have a huge appeal due to the pick/put down factor. In a way its kind of like just a small hit of D&D when you need it, then your back on with your life again. I miss tabletop gaming, but just really dont have the time for it anymore.
P.S- I roll 20’s.
The Explosion in WoW might in fact be one of the reasons behind this slump. With every household most likely to produce an RPG fan also likely to have internet access, and the wide popularity of Blizzard games, I don’t think that the arguement that WoW’s tremendous popularity poses a threat to Pen and Papers can easily be dismissed. At the very least, it poses a threat to the future of the market; every pen-and-paper player who also plays WoW was a tabletopper before Warcraft; in all likelihood, most p-n-p players in the future are going to be WoW fans first. Its definitely not as complex or detailed an experience, but it is faster, easier, socially anonymous, and in comparison to big publishers like Wizards of the Coast and GamesWorkshop, cheaper in the short term. So those future players are going to have to be given reasons to choose tabletop over WoW, and if they aren’t simple inertia will keep them online.
Then again, MMORPG’s might be where the big publishers are going. If Wizards’ Eberron game is successful, and Games Workshop continues to license to spectacular developers as it did in the Dawn of War series, then Computer sales may come, in the next decade, to dominate their corporate profits, which will lead them to simply abandon their tabletop business sooner or later. I think that’s kinda an extermist arguement, but it does raise the question of how these forays into computer gaming will effect the industry.
That’s kinda an unfair statement about the kids, but at least you werent sitting on your porch in a rocking chair, wielding a shotgun when you made it.
Given the excessive parenting kids have to deal with these days, from Baby Boomers and all the subsequent gens who have sublimated frustration over BB social dominance into constant parental control, its not much of a surprise that some in the present gen have turned away from the idea of success through intelligence and creativity all together, seeing as their attempts to do so are usually rebuffed, through excessive application of authroity and drug therapy, as trouble making and dangerous bad habits. There are intelligent, imaginative kids out there, likely in the same proportions as when you were a child, but they’re dealing with totally different circumstances, and in a world defined by a new set of tools. Whatever their generational attributes, they are reactions to this enviroment, not an explicit lackings in their character.
Re: to all those arguing….
learn to get out.
Re: to all those arguing….
Gee, your scintillating logic has confounded and defeated me.
I certainly hope you have a job that is on a comparative level with your intelligence, like fry cook at the local McDonald’s.
Re: to all those arguing….
you haven’t denied the parent basement claim.
There are RPGers in the most unlikely places. My 60-something boss at the university I work at has a collection of first edition Dungeons and Dragons, and I spent months thinking she was some uptight and very traditional and conservitive lady. Then she saw me reading a GURPS book one day on break and said “I never actually got to play a GURPS game, is the system really as good as my friend used to say?” I was shocked.
Where are the FARKING Girls???
When a business model targets only one (ONE!!!) demographic, it’s death is eventual, not avoidable.
White males, the reruns of ST:TNG are calling you!! In the meantime, find ways to put RPG’s in the model of “The SIMS”, which is where all the women flocked. If you can do that on paper, it saves the industry.
Good luck, we’re all counting on you.