[DL] State of the Industry

[PEGShane@aol.com]

Hi all,

I've been asked this question a lot on the various Pinnacle listserves, and thought I'd just offer up my two cents to those who are interested. Skip it if you just wanna game. ;)

In a message dated 10/6/2002 12:16:58 AM Eastern Daylight Time, darkechilde@charter.net writes:


> I really don't want to distract you too far from Savage Worlds, Shane, but I
> would like to ask:  What is the current climate for the gaming industry?


Sales for *most* everyone I know (and I know most everyone in the industry) are down a bit. Here are my thoughts, in no particular order.

1) A sluggish economy. I've noted manufacturer sales tends to lag behind the economy about 6-12 months. I guess that's because we sell lots of books and then they sit on distributor/retailer shelves for a while. When those don't sell, it takes a while to filter back up to us in reduced backstock sales (reorders).

2) Wizkids is sucking up all the money. More power to them, no complaints here. But given the current market, all those dollars going to one company is really rough on the rest of us. Not whining--just an observation. This was *very* evident at the summer cons, when they had at least three 60+ person lines going every minute the show was open, and each person probably averaged over $100 in purchases (judging from what they were carrying up to the counter). Our sales at summer cons were down 40%, even though we sold more of our new releases than ever, and more than anyone else I know of with "bigger" releases--such as certain very large licensed properties I won't name.

3) The d20 glut has made things very tough on the non-D20 middle tier (companies like Pinnacle, SJ Games, White Wolf in their non-d20 lines, etc.). White Wolf mitigated reduced sales on their World of Darkness lines by brilliantly capitalizing on D20, first with their Scarred Lands world and then with Everquest. I tried to do the same by doing Weird Wars with d20, and dual-statting Deadlands, and while they certainly did quite well, they proved (to me) that the D20 crowd is very heavily ensconced in the fantasy genre. Hostile Climes was an experiment, and with very little marketing and promotion, it sold as well as any DL or Weird Wars book.

And those companies that make good products, Fast Forward, Fantasy Flight, etc, will continue to do well. The top 10 of the d20 heap is a fine place to be.

The glut has caused the most trouble just by the sheer number of new products out there. When we started in '96, there were about 10 well-known companies, 2-3 top RPG lines, and another couple dozen cool lines that rarely broke into the top 5 sales (Deadlands got as high as #3 at its peak in '98). Now there are several hundred companies and over 1000 "current" d20 products. Add that to Wizkids' success and the fact that gaming is a niche market and you've got a tough time in the middle.

All those d20 publishers have created a massive backlog of products that cram the store shelves. This has many detrimental effects to established companies in the middle, such as convincing some stores that they can only carry d20 and ditching the rest. Why carry a complete backstock of Deadlands, or Fading Suns, or GURPs, when you can just get in another hardback book about elves? And if you're making all your money on Wizkids, Yug-i-oh (however you spell it), and a few top D20 lines, why pick up older, riskier lines?

Distributors and retailers, in the private forums, privately gripe about any new d20 release that isn't really different. So why do so many keep coming out? A couple of reasons. First, the companies that got in early and did good stuff are still selling 2-3000 copies of their games. That's still 2 or three times more than most third-tier companies could have done before d20. Look at Chameleon Eclectic in the old days--a company I worked with a lot. Selling 500-750 out the door was average.

Another factor here is that a lot of the d20 publishers were guys who were making big salaries in other industries and have now translated their dying 401Ks into publishing. I'd guess 75% of those guys are starting to lose money now that the glut has taken full effect. A few are still making at least a little profit, so they're better off publishing than they are putting it back in their 401Ks since those are still on a downward trend (plus they're trapped now, since they quit their jobs).

This is also why I keep saying the "middle" tier has trouble. The lowest tier is made up mostly of guys who still have their day jobs and put out their d20 products for fun. Most probably still make their money back if they write it themselves and get their art cheap, so why not? Again though, this takes up the scant dollars the middle tier, companies with overhead and backstock and full-time jobs, are all competing for.

The future? I suspect you'll see Wizkids continue to do well, as well as a movement toward "retro" products like board games, but with the streamlined nature of today's rules systems.

Roleplaying wise, I suspect you'll see two things. The non-WOTC d20 companies will move away from D20 proper and more towards the OGL, which is the exact same thing but without the need for the Player's Handbook, like White Wolf's Everquest. This allows companies to put in their own character generation rules, and change the system without violating copyrights and running afoul of WOTC. (If you don't understand the difference, check out the info at the open gaming foundation, or on WOTC's own website--don't have the addresses handy.) Most designers I know very privately don't like D20. They won't say that publicly because it's all that selling for them right now, but it's the truth, so they're dying to change it to something that better fits their needs.

You'll also see a number of companies move away from d20 altogether to do their own thing and capitalize on those gamers who get tired of d20. My own Savage Worlds is one of them, as is Fast Forward's upcoming 1492 (which is really cool, btw--I've seen parts of it and it's truly revolutionary!)

I think d20 will dominate, and probably 50-75% of the games out there will use it in one form or another (with or without the license). That's just fine--that remaining part of the industry (especially with many crossover gamers who buy and read other games, even if they don't play them) is still a *very* viable part of the market for companies whose emphasis isn't in d20, and is about what it was prior to D20 if you concede that D&D and Vampire owned 75% of the market before.

You'll see that trend start later this year and really gather steam around March (when the industry has its big trade show).

As for miniatures, you'll see more movement towards the pre-painted variety. Quietly, historical miniatures and generic minis that support fantasy RPGs (such as Reaper's extensive line), will also do well, but that's an entirely different crowd. I doubt you'll see many minis games (other than Games Workshop, who have their own market pretty wrapped up) released and succeed as they've done in the past. Look at all those that were really good, had good marketing and production, and are now gone. Clan War was cancelled, Vor, whatever White Wolf's game was called. Geez, I can't even think of a single "traditional"
minis game that's still alive and supported (again, besides GW).  You can name a few niche games that do okay in certain areas, like War Gods of Aegyptus (which is really cool, btw), but even that doesn't register on the industry radar. (Quick note--many miniatures games companies dislike distributors because of the 60% discount and only sell directly to customers and a few stores that champion them. Some do fairly well this way, but never get the really deep penetration of say Pinnacle or SJ Games.)

Whew. Sorry that was so long folks. You asked. ;) I hope that offers some insight into what's going on in the industry right now and why certain things are happening in your local game store or with your favorite game companies.

Shane Hensley
Pinnacle