032 – Success Factors in the modern Board Games Industry

Last week I saw the documentary movie “The Game Designers” by Eric Rayl which was successfully funded through Kickstarter and indigogo. First of all, I can recommend watching the movie. It covers a lot of great game designers. Some of them have already been guests on the Nerdlab Podcast as well.

The documentation is about 5 different game designers and their process of creating new games. With Antoine Bauza and Matt Leacock, the designers of 7 Wonders and Pandemic, 2 very very successful designers are part of the movie. But with Kelly North Adams, Christ Faulkenberry and Doug Schepers also 3 less known designers are showing off their work. And I really like the mix here. 

What becomes really obvious in this documentary is the span between successful game designers who are celebrated like pop stars at conventions and hobby designers who have to fight for every playtester, every backer and every follower. 

That made me think a lot personally. Each of the designers interviewed in the movie said it is extremely difficult to almost impossible to make a living as a full-time game designer. 

On the other side of the spectrum, you have games like Dominion, Gloomhaven or Pandemic that are sold millions of times. Or even whole development teams employed at companies like Wizards of the Coast and Fantasy Flight Games which release new content for their ongoing games and sell it successfully over many years. 

These differences in success and income are nothing special. They can, of course, be found in other industries as well, but it seems to me that the range of success in the board game industry is extremely high and the number of really successful games is rather low. 

That’s why I decided to use this episode today to take a bit of a closer look at the board game industry with the goal to derive an answer for the question:

What makes a board game successful from an economic point of view?

Important Links:
The Game Designer Documentary

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Sources:
Music by Mathew Pablo
https://www.theguardian.com/technology/2016/sep/25/board-games-back-tabletop-gaming-boom-pandemic-flash-point 
https://www.board-game.co.uk/success-of-tabletop-gaming/ 
http://www.spencerbnelson.com/blog/android-netrunner-and-the-living-card-game-business-model
https://boardgamegeek.com/geeklist/236580/there-boardgaming-bubble

The History of the Board Game Industry

If we look briefly into the past, there are of course a number of games that were extremely successful. 

There is, for example, the game of life. Produced in the 60s, sold millions of times. Life isn’t a fair game. It’s not a strategic masterwork nor is it a game that can be solved or analyzed. It’s a pretty luck-driven game. From today’s perspective, it would probably not be successful. But in the 60s and 70s, there was nothing like it. There was no competition. 

Other games of that category are Risk, monopoly, trivial pursuit or Cluedo. They were incredibly popular because they were ahead of their time. Even if they are not particularly good games from a modern board game perspective we need to be grateful for what you’ve done for the industry.

And I think it’s deserved that the games are still sold well today. Even though I personally can’t really do anything with the 250th Monopoly Theme. From an economic point of view, they are all very successful despite their very bad BGG ratings.

Then, in 1995, came Settlers of Catan and thus the revolution of the Eurogames began. These games had relatively nice and family-friendly themes (farming or landscape-building). They really improved on the aspects that went wrong in the older games.  They reduce the element of luck and ensured no player is eliminated before the end. Settlers of Catan from Klaus Teuber sold since its publication in 1995 more than 22m copies in 30 languages.

The State of the Board Game Industry Today

Nowadays the industry looks completely different. There are no longer just a few games that are very successful, but there are very many games of which only the tip of the iceberg are absolute blockbusters.  

Therefore, the biggest concern of some people in the industry has been whether we are in a bubble that will burst at some point. I think that is not the case. First of all, because board games are typically not a form of investment that you buy with the goal of selling them later profitably like stocks, real estate or even comic books. 

The best answer to the question of whether or not we are in a bubble that I have seen is from BGG. It is a comparison with the movie industry.

First: It is a fact that the number of new games coming out each year exploded. And the result of it is simple. You as an individual cannot play all the available games anymore. The market is no longer a niche market in which everybody played every game, or at least knew about most of them. Some years ago it was easy, as a consumer, to keep up with everything that was released. Everyone in the hobby shared a common experience in terms of being aware of this year’s relevant games.

Nowadays, it is impossible to keep up with all the releases. The result is that it has become harder and harder for the gaming community to share “overlapping” experiences. Like movies and books, board games are no longer a hobby in which you can consume all the content being created much like how nobody watches every single movie/book that is being released. For me, that means the targeting just becomes way more important. You can no longer release games without a very good understanding of your target audience. But I will come to that later on. 

But the sheer number of games is only one side of the coin. Not only the number of games increased dramatically but also the number of players and with it the number of sales. And that’s actually a sign of a very healthy industry. 

Let’s have a look at some numbers of the modern board game industry:

  • Today round about 5000 Games are released every year (in the 70s there were just a few hundred games. And even in the year 2000, only about 1250 games per year were published. So the number of new games per year has quadrupled in the last 20 years alone.
  • Also, the annual growth in sales is between 10 and 20 percent in the last couple of years, which is a solid number.
  • When it comes to customers we can have a look at the BGG users. These numbers are from 2018, maybe there are newer ones, but it doesn’t matter for what I want to show. In 2018 BGG had 1,6 million members. But the interesting aspect is that when BGG grew to 1 million, there was a report that stated that 20% of the BGG members (200,000) were added in just the previous 12 months.

The role of Crowdfunding and Kickstarter for the Board Game Industry

The effect that I just described is very well known from other industries. Especially from how media consumption changed with the rise of the internet. The effect is called the long tail. There is also a book by Chris Andersen that I read a few years ago. The long tail explains why a lot of different niche goods tend to outsell fewer hit products. I mean there is a reason why Amazon has millions of millions of products and not only the few best selling ones. And there is also a reason why billions of videos are stored on youtube. The sum of a huge number of mildly popular products can outsell a small number of evergreen hits. The reason why we see this effect is simple. It is easier than ever to produce your own movies, books or music, and self publishes them. Everyone can now produce their own content, the tail keeps getting longer.
The ones that profited the most from this trend in the different industries have been platforms and aggregators. Aggregators make accessing niche products easier, which increases profits and makes the tail not longer but fatter. That means more attention is brought to niche products. For video this aggregator is youtube, for books it is Amazon and for board games it is Kickstarter. We see not only more products in the market, but we see also more of the market share transferred to the niche products.

Crowdfunding has really lowered the barrier of entry for people trying to break into the board-games industry. 

  • I mean there are games that funded 50.000 Dollars in 3 minutes like Dark Souls and end up with 4.2 million dollar funding. And that is before the game is even released. 
  • Exploding Kittens, which launched via Kickstarter in January 2015 raised $8.8 million in 30 days and has sold more than 2.5 million games to date.
  • more than $6.25 million for Tainted Grail: The Fall of Avalon
  • In total, the tabletop games category — which includes board games, hobby miniatures games, card games, and tabletop role-playing games — was up $27.23 million, a 19.8 percent increase compared to 2017. The total raised by successful tabletop campaigns was $165 million, also an all-time high for the Kickstarter platform.
  • a successful tabletop game campaign earned a whopping $70,603.33 on average.
  • 3300 new games on Kickstarter each year alone

The result is that it is easier than ever to create and publish board games. The number of games increased and those games become way more focussed on the interests of smaller groups. First of all, this is a good thing because it allows players to grab games that really match their preferred playstyle and theme. But on the other side, the target audience becomes smaller and smaller. Up to a point at which designers might not earn enough to make a living from designing games. That’s why I think you cannot narrow down your target audience too much.

Success Factor 1 – The Target Audience

For me, the target audience plays a very important role in the success of a board game. With a growing player base also the demographic distribution of players has changed considerably. In the past, there were families who played games with their children and nerds who played Dungeon & Dragons, Magic and Warhammer. Today there are significantly more women and significantly more couples playing games. If you want to reach these target groups, you have to adapt your theme and rules accordingly. This concerns the length of the game, the complexity and the number of players. 

Pandemic is an example of a game that targeted this audience very well. It is very inclusive, it is friendly and it is cooperative, a trend in the board game industry of recent years.

In times of the long tail effect, there is certainly a market for every target group, but if you want to have a certain reach you have to think about how to address the largest possible target group without being too unspecific to be uninteresting next to your competitors.

Success Factor 2 – Marketing and the role of Word of Mouth

Knowing and designing for your target audience is crucial. Reaching your target audience is another very important part of successful games and the determining factor of whether a Kickstarter campaign is successful or not.. How to be successful on Kickstarter is a huge topic that I cannot cover today. But one aspect that is related to what I already talked about is the role of reviews and word-to-mouth.

The internet has vastly accelerated the word-of-mouth on which the tabletop industry relies. Since there is so much competition you need the attention of the consumers. And as a first-time publisher, this can be really really difficult. This is also a topic that can be seen in the documentary movie I mentioned in the intro. If we talk about Kickstarter, we by no means talk about self-published content only. We also have all of the large publishers there. And the advantage they have is that they already have an audience. They know their gamers and know what kind of content they need to produce to match their experiences. Combined with a huge network of reviewers, influencers and a lot of marketing budget it is possible to draw a lot of attention to a specific game for a few weeks during the Kickstarter campaign. This can be very hard to achieve as a first-time publisher. That means Marketing is super super important.

Success Factor 3 – Ongoing Business Models for Board Games

What also is important for the financial success of a board game is the business model. In today’s industry, it is no longer possible to produce a product and then rely on its sales for the upcoming years. For this form of evergreen content, the competition is just too strong and the attention span of people to short I guess. That’s why most games try to come up with some form of regular expansions. Let’s have a look at different models here:

Regular GamesEverything is released in one box. Everything included. One time payment by the customer.
If the game is a success there can be rebranded versions. Something like pandemic Cthulu edition or other forms of special editions. Often there are adapted versions for more or fewer players (7 wonders duel), simpler versions only using dice or cards (pandemic the cure) and legacy versions of the game (Pandemic legacy, risk legacy or aeons end legacy). Most of the time these expansions are themed new versions played as stand-alone games.

On rare occasions, if the games are very very succesful there will be regular expansions adding new roles or events to the game to increase the replayability of the core game but typically expansions are not part of the initial business model. 

Collectible Card Games
As a total contrast, we have collectibale card games. Their entire business model is designed around expansions. They basically ask players to blindly purchase more and more packs of cards in order to collect the entire set or even multiple sets of the available cards. There was a real hype about that business model in the 90s because of the success of Magic, Yugioh and Pokemon but most competitors are no longer in print. And with except to a few game exceptions people tend to dislike the business model because they have to spend a lot of money on gambling. 

Living Games (ongoing Story)
As an answer to the declined market demand for new collectible card games fantasy flight games came up with the term living card games.

Rather than forcing customers to do blind purchases to try and strengthen their arsenal of cards, games like Netrunner have regular expansions that are released, allowing players to expand their decks if they wish. The difference between this and other genres, such as the “collectible card game” is that the living aspect puts less pressure on consumers, allowing them to collect, but at their own pace and without affecting the fun of the game. For example, players are able to play a fully functional game of Netrunner with the core set of cards, and it’s still entertaining. They don’t have to go out and purchase cards to make the game fun. And that’s the beauty of making a card game alive.

  • Less intrusive
  • Players can move at their own speed 

Multiple Expansion Games especially Deck Building Games (new gameplay per expansion)
There are other games out there that are very similar to the genre of living card games, in terms of business models. Let’s take Dominion as an example for the entire deck building genre.
The core game is functional on its own. The consumer only buys the core box and can play a huge number of times. It doesn’t ask the players to make additional add-on purchases to achieve a complete game. There are, however, multiple expansions for the game that immerse players even further in the world and add more options for the gameplay. Expansions add new combos, new synergies, and new themes and therefore enhance the replayability. This is especially true for the deck-building genre because the games typically don’t last too long what means you want to play it over and over again to see what kind of combos you can achieve this time. The same is true for dungeon-crawling games that also rely on replayability and diverse experience with each playthrough.

If you want to design a living game that has a lot of expansions you have to take that into account from the very beginning. Because not only the business model needs to be appropriate, but also the game mechanics. The gameplay must feel complete at its core, but also needs to be easily combined with new material as the game continues to live and grow.

All of these models somehow try to increase the shelf life of the games by delivering regular expansions. In video games, you have microtransactions and subscriptions. Maybe we’ll see some new business models in the board game industry as well.

Conclusion

I know this episode was a bit different than usual. If this was your first episode you should know that I typically don’t look at the industry from a birds-eye perspective but dive deep into mechanics, themes and games instead. However, after watching the Game Designer Documentary I had the feeling to step back and take a closer look at the industry as a whole. I hope the show was entertaining for you as well, even if it was a bit different than usual. 

Until next week keep disrupting the industry and nerd like a boss.

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