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TPC 158: Analyzing the Industry with Ed

September 18th, 2011 · David · 3 Comments

* Ed Healy joins us!

* The Gamerati tour is in its second month and you can donate <a href="http://tour.gamerati.com/">here</a>!

What’s important to a successful Retail venture?
* Defining “successful” itself can be problematic, how is it differentiated from survival if at all?
* “Fan” owners vs. “Businessmen” owners, and the intersection of both; are both necessary for success? I think probably. Is one more important than the other?
* The gamer-shame phenomenon extends to store owners; a sense of not being in a real business? Does this attitude negatively impact potential for sales?

Community and the Retail store
* How much does community outreach matter to a game store’s success? The Fantasy Shop’s scale of sales was suggested to outstrip any immediate impact by any potential community events. Cost/benefit analysis?
* There was an odd dichotomy, a sense of pride that the shop’s employees do work hard to build a sense of community but statements indicating that the community was supplemental, not essential.
* At the management level the Fantasy Shop adopts a “Call us, we won’t call you” policy. They will be open to providing space for events and promoting them, but won’t instigate or do the legwork to help make an even happen. Event management not a priority compared to other work to be done.
* Gaming space as a supplement, not a necessity. Retail space for inventory to support sales volume the priority.
* Good Evangelist (polite game mentors) vs. Bad Evangelist (creepers). Can they sort themselves out, does it serve the store to encourage good ones, discourage bad ones, or both?

Game Economics 101
* Costs vs. Sales – Personnel, property, inventory. Maintaining appropriate inventory to current and anticipated sales volume.
* Inventory management boils down to doing the math on turnover – example target is to average about 4 sales per unit stock per year. If this is not met, stock fewer fringe items, focus on core sales. If it’s exceeded, increase stock – if core items are not actually selling out, bring the average down by stocking slower moving items (such as Indy games).
* Start off smaller; don’t try to stock everything before your sales support it.

Looking towards the future
* Is physical game retail dying? The Ryan Dancey phenomenon.
* Overlooked expenses of online retailing – shipping costs, manpower to move significant quantities of material, IT support, warehouse storage costs.
* Deep Discounters as a model for failure, economics of scale actually hurt them; once they have to move real volume some of the above costs really kick in and undercut the profit margin.
* Per the above, two different economic models needed for online and storefront; different models suggest potential coexistence. Different customer bases?
* Old publisher model of closed book, low information vs. newer examples of open-book publishing (Evil Hat) – can the latter keep retail more healthy and able to provide a sales outlet for the publishers? Better establishment of a relationship between these levels important?
* Analyzing current data: a reasonable understanding of statistics and numbers is required.  Look to the 4e/Pathfinder “debate” happening now to really understand this topic.  Point in time sales vs lifetime sales
* Data - in the same vein, there are a billion people who are commenting on the current state of the industry citing anecdotal or even just blatantly made up information.  Is there a good source of raw data for the industry that people should be looking at?  If it needs some analysts, I know some good ones who do the RPG Podcast Listener Survey
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3 responses so far ↓

  • 1 Justin // Sep 22, 2011 at 12:09 pm

    I bought the 20th Anniversary Shadowrun 4th ed. book from Loot (Gamerati) and it showed up looking just fine. Well-packaged and everything.

    If Ed says he doesn’t know what he’s doing with Gamerati he seems to be doing a decent job!

  • 2 Chibi // Sep 23, 2011 at 8:47 am

    This wasn’t typed on a typewriter. You aren’t fooling anybody.

  • 3 Ed Healy // Oct 26, 2011 at 12:14 pm

    My name is Ed Healy, and I am the Gamerati! :)

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