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.