Re: [HOE] Re: Product Updates ( I feel a rant coming on...)

[Darrin Bright <darrin@neobright.net>]

At 12:43 AM 11/28/00 -0500, you wrote:
>Just a Friendly Reminder to the POWERS THAT BE...
>
>Not getting any products out or not in time means company makes no money.
>Retailers thjat have to explain why there is no product and does not know
>when product will arrive get frustrated. Retailer get frustrated. no order
>YOUR product.

It's a little more complicated than that. Okay, it's a LOT more complicated
than that.

When an RPG company prints a particular product, they have to pay the
printer, the writers/artists/etc., as well as their own monthly fixed
costs... anyway, when they send a book to the printer it's something they
have to pay for right away, and given the razor-thin profit margins they
operate under, it usually means that unless they have cash in hand to
spend, they go into the red credit-wise.

Once the book is printed, then they can sell it to distributors and try and
get back in the black again. In order to have any hope of getting back into
the black again, they generally have to sell the entire print run *really
quickly*... RPG companies generally try to print less than they think will
sell so that they aren't stuck holding unsold products in a warehouse,
which they have to pay taxes on. Plus, if an RPG book doesn't sell within
one week/month of when it was released, it generally doesn't get sold. 

Now a few years ago, it was a little simpler, the RPG companies shipped
everything to the distributor, got paid, and then went back to writing more
products. But this little thing called Magic: the Gathering came along and
completely changed how games distribution works. Some of the bigger changes
involved with how products are delivered and stored... due to the insane
demand/speculation for CCGs, the distributors couldn't get products out to
the retail stores fast enough. They were also ordering a LOT more CCGs than
RPGs, and putting much more emphasis on CCGs for preorders/advertising,
etc. Anyway, the distributors made changes so they could become leaner,
meaner CCG-distributing machines.

Then interest in CCGs took a sharp dip, and the distributors were suddenly
stuck with *warehouses* full of unsold product and absolutely no way to get
rid of it... and they had to pay taxes on it, too, after it had been
sitting around too long, as well as all those unsold RPG products that no
one ever heard about because everyone was preordering CCGs. Some of them
sent these unsold products back to the manufacturers, who then had to find
some place to stick them and, of course, pay the taxes on them. 

Throw in a few mergers and the time it takes to integrate two businesses
that used to operate separately, and you've got a lot of RPG companies that
can't get products to their customers. Some of them start looking at taking
orders online and shipping direct to customers... which causes the retail
stores that haven't gone out of business by now to start SCREAMING foul at
the top of their lungs. 

Anyway, back to PEG... Shane sold PEG to Cybergames so that they could keep
an eye on the books. If PEG had gone into considerable debt to put out all
those wonderful products we enjoyed so much, then they might indeed have
told PEG to slow down their releases until they have the resources in place
to bring in more revenue. If you're putting out $100 worth of gaming
material a month and your target audience is only spending $50, then
problems start to show up in a hurry. Game stores now have $50 in unsold
products on their shelves, and they stop ordering PEG material from the
distributors. The distributors in turn stop buying PEG's new releases
because they've already got crates full of last month's that hasn't sold
yet... and they are NOT going to dedicate their warehouse space to product
that might not sell, they got way too burnt on that whole CCG thing.

This is all bad guesswork on my part, but the way game distribution works
nowadays is just f***ed in the 'ead... and it could be even more
complicated than that. Cybergames probably has an entirely different
revenue structure than PEG, given their (supposed) online presence, and
they did go on a bit of a buying spree. Getting all those corporate
entities to work together may take a while.