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Why do game companies fail?

 Post subject: Why do game companies fail?
PostPosted: Thu Nov 24, 2005 1:36 pm 
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Unctuous Toady
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A lot of times a game comes along and it is a good product, but the company goes out of business. Other times a company has a good game but still can't seem to sell it. Why does this stuff happen?

Why do game companies fail?


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PostPosted: Fri Nov 25, 2005 12:03 am 
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It comes down to the old story of supply and demand.

There is only a finite demand for gaming stuff out there in the world, and unless you are selling a game that requires constant expansion (CCGs for example) you will soon saturate the market.

Add to this the fact that the market in question is small and niche. There is little advertising outside of specific circles, in fact there is little knowlege of the industry outside those circles. Sometimes, a game will cross boundaries and get more attention - classic examples include Battletech, which went from a hex-map wargame to a series of computer games, to a collectable miniature game (3D CCG). But this does not always result in an upstream flow of demand.

The only reason GW has bucked this trend is because of a major marketing stroke of genius. The creation of flashy, high-profile GW stores in high-traffic areas has done much to increase knowlege of the company, product, even the game genre, to the public. Sadly, it has also created the false impression that GW is wargaming, and there are no other alternatives.


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PostPosted: Sun Nov 27, 2005 2:06 am 
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Plus with GW being the mega giant that they are, they pretty much monopolize the small niche that is wargaming.

But over all though, there are a lot of other variables to consider as well. I mean the biggest thing I can think of for failure is lack of long term funds. Or maybe incompetance in the management/owner. Also, they may not have advertised properly or overestimated the demands for their product.

I think it would be easier to analyse each failed business seperately as each one I bet is unique in their failure.

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PostPosted: Mon Nov 28, 2005 7:03 am 
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I would say the reason most fail is the lack of sales of new product to it's already existing consumers. After my friends and I assembled a large enough collection of Battletech minatures and maps we quit buying any new product. With copiers easily accessable or downloaded programs and printers we no longer needed new books of mech print outs.

By pooling our resources we were able to gather a large and varied collection of minatures without each one of us being required to buy our own complete set.

The same goes for games like D&D. Once you've purchased the main books most campaigns I took part in were simply created by the DM not actual store bought modules.

So it's my opinion that the downfall of most games would be the lack of continued purchases by the consumer once they have the basic necessaties.


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PostPosted: Tue Nov 29, 2005 2:56 am 
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This could be the very reason GW keeps revamping its rules and codexs. I mean if they never changed from 2nd Edition, hell I would have never needed to by another mini for my Ork army ever as I had everything.

Maybe GW isn't so bad after all.

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PostPosted: Tue Nov 29, 2005 3:07 am 
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McCragge wrote:
This could be the very reason GW keeps revamping its rules and codexs. I mean if they never changed from 2nd Edition, hell I would have never needed to by another mini for my Ork army ever as I had everything.

Maybe GW isn't so bad after all.

McCragge


Of course that's why. Look at every sucessful game, they always come out with multiple editions.

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PostPosted: Fri Dec 23, 2005 3:11 am 
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real life example:
i am great turok fan. i played and beat all games that were released on pc (dinosaur hunter; seeds of evil; evolution) the games have achieved 'cult' status.
what happened to the company that produced the game?
http://www.acclaim.com

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PostPosted: Fri Dec 23, 2005 9:44 am 
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I think a major problem is that game companies breath "New."

Having new books, new rules, new figs, new challenges, new players is essential to keep a game living, and to keep it from growing stale.

But adding new elements is always a challenge. You can either add them to the current version (which runs the risk of rules bloat, or of majorly upsetting the balance of play), or you can start from scratch with a new edition (which runs the risk of pissing your player base off, by making all the money they spent on the old edition obsolete).

A perfect example of these pressures working themselves out is the edition creep of 40K, but the most brilliant example is the Type II tournament style in CCGs. Under the Type I tournament standard (where you can use any card ever made) rules bloat became apparent after the game matured. Every expansion would have one or two dominant cards, which would become essentail for successful decks. Pretty soon, all successful decks had the same core. Type II allowed the makers to cut out this glut of past power-cards, leveling the playing field for new players, and making new expansions useful. Plus, the business sense is undenyable--players must buy the expansion, because their old deck concept becomes obsolete every six months or so.


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PostPosted: Fri Dec 23, 2005 2:36 pm 
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From a business standpoint, it is the same for any industry. That is to say, it is all marketing.

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PostPosted: Wed Jan 04, 2006 9:11 am 
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mortishroom wrote:
From a business standpoint, it is the same for any industry. That is to say, it is all marketing.


I'm totally with you on this one Mort. All the really successful companies in the miniature business have very successful marketing.

I also agree with Auzure that constantly releasing new products keeps many companies alive. "Publish or perish" like they say.

------------------------------

But wait, I think that the failure of miniature/gaming companies has more to do with other things. Marketing and new products won't do you any good if you can't get your product on the shelves.

I-Kore had this problem from what I understand. Apparently a lot of independant retailers didn't want to stock their stuff. I'm not sure why this was. Maybe they had a reputation as being flakey or unreliable.

I have some friends that have been playing historic and sci-fi miniature games since the 70s. They would always show me amazing miniatures from companies that no longer exist. The story always seemed to be the same thing... "Great miniatures. The company was small, run out of some guy's house. They just couldn't meet the demand." Or something like that.

I think two HUGE problems for companies are:

1. Being able to actually deliver the product
2. Getting the big distributors to carry your stuff

If the big gaming distributors won't carry your product, then your business basically fails before it even starts. I haven't talked to my local independant retailer lately, but I think there might only be one distributor left!

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PostPosted: Sat Sep 02, 2006 9:44 am 
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I can't help but add my own thoughts to the discussion. For years I have been toying with the idea of creating a wargame. When I was a senior in high school I actually designed one for a sociology class based loosely on squad tactics in World War II. Basically, it was a tabletop version of an old computer game called Close Combat.

I strongly favor good rules over good models. This is an initial preference. I often thought of going public with this set of rules (after some heavy editing) and see what happens.

My plan would not be to create my own gaming company. Already, I am a freelance fiction writer. Instead of contacting gaming companies, I would write the rules in book format and submit it to publishers. For my initial models, I will use laminated cardboard pieces, and if anything good comes out of this, I can graduate to physical 3-D models. As a freelancer, the publisher would be taking most of the money, but holding most of the risk. I think it is definitely an interesting proposition to focus on at a later date.

There is another path I am interested in taking that I recently saw. There is a game out about pirates and huge ships and adventure that uses plastic card constructions of ships, islands, and counters (I don’t remember the name). Instead of producing models, I can use these card constructions to make the individual WWII units… yet another idea for the back of my mind.


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PostPosted: Sat Sep 02, 2006 1:10 pm 
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Leodinas it seems that your knowledge of the publishing business gives you some unique insights into how a game could be brought to market.

I look at things from a slightly different perspective. I started role-playing in elementary school. Later at 16 I bought a copy of Rogue Trader and began my transition over to miniature gaming. As a role-player we really if ever used miniatures. So for me, creating a game was always about the rules and the books. I remember as kids how at different times most of my friends and I tried our hands at making our own RPGs. The efforts were always focused on writing the rules.

Decades later I have seen the gaming industry change. For a long time Games Workshop has understood its role as that of a company whose main profits come from selling models. Other "gaming" companies have realized this as well. I-Kore release the rules to their game Void for free. It seems like the rules to a miniature game have become something secondary in terms of the whole product line.

I would go so far as to say that the rules for most miniature games today are nothing but an elaborate form of marketing for the miniatures themselves.

Take special characters for example. I know a few people who love painting that really appreciate painting special characters. But I think that for most gamers special character are just great ways to get super powered additions to your army. For me personally I hate special characters, they steal the best part of the game from players in my mind which is creating your own storylines and heroes.

Take Dungeons & Dragons for example. The latest version of the rules marks a deliberate effort to couple the game with the sale of miniatures. It seems like DnD's own (whoever that is at the moment) wants to follow a more GW like model for making money.

I try and keep a fairly close eye on where things are going in the miniature gaming industry. It seems to me that with emerging games like Rachham's AT-43 and Mongoose's Battlefield Evolution the new shape of miniature gaming will center around pre-painted all plastic miniatures. These games may or may not include a collectible component such as in Mage Knight or Pirates (the little ship game you mentioned).

Either way the industry seems to becoming less hobby oriented and more merchandise oriented. And that merchandise is plastic models, much closer to no-assembly-required toys than models assembled by devoted hobbyists. To my mind, it doesn't bode well for the sort of games that I like to play.

Anyway, I've sketched this all about because I'm wondering what you think the audience or niche for you game will be. If your game doesn't require miniatures then maybe you would make it as a more traditional board game. I'm thinking of some of the giant old school board games that companies like Avalon Hill used to sell. They said things on the boxes like "Playing time: 8-28 hours". I'm not certain, but I think that are of such games has come to an end. I believe that the boardgame industry is doing well, but is dominated by more innovative German style boardgames.

Basically I see two ways that a miniature game can succead today. Both appoarched depend upon where the focus of the effort will be. The first approach is product centered like GW or most modern miniature companies. In this model you work at selling miniatures and the rules to the game are just a catalyst to encourage sales of the miniatures (which is the true product).

The second approach, and the one that I think is more interesting, centers around the idea of a game or setting. Basically the energy is focused on creating great intellectual property that can then be applied to different venues. Mutant Chronicles began this way. I believe that the designer/owner of the whole Mutant Chronicles "franchise" is a fellow named Nils Gullikkson. The miniature game Warzone is set in the Mutant Chronicles setting, but he has also successfully marketed his intellectual property in many other venues. There have been Mutant Chronicles boardgames (Siege of the Citadel, Fury of the Clansmen, Blood Berets), a collectible card game called Doomtrooper, a game cartridge for the NES console, and of course Warzone.


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The game designers themselves know these values are not realistic and they do not intend them to replace or invalidate the fluff. So let's get on with our lives and not fixate over the cosmic ramifications of game mechanics which we already know are streamlined for larger forces at the expense of detail.


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PostPosted: Sat Sep 02, 2006 3:56 pm 
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For anyone who is not familiar with Pirates by WizKids, here is an example of their "miniatures". The game pieces are punched out of what looks like credit card material and assembled. Dirt cheap to manufacture and $4 per pack of random cards!
There has been some discussion over where WizKids is heading now that they have been purchased by the Topps sports card company, but their new corporate overlords do not seem to be running them in to the ground just yet.

Truckler wrote:
It seems to me that with emerging games like Rachham's AT-43 and Mongoose's Battlefield Evolution the new shape of miniature gaming will center around pre-painted all plastic miniatures.
The need to convert and paint an army of miniatures does scare away many potential consumers from GW games. It is a viable niche of course, but I think the broader audience of 13-year-olds that these game companies are after responds better to a game that is cheaper to start and involves no artistic talent. I have wondered if GW might not try to break in to this market, as they did with collectable card games.

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PostPosted: Wed Sep 06, 2006 5:10 pm 
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Truckler wrote:
I-Kore had this problem from what I understand. Apparently a lot of independant retailers didn't want to stock their stuff. I'm not sure why this was. Maybe they had a reputation as being flakey or unreliable.
if memory serves there was a serious problem of overstocking: shops would order product from I-Kore, I-Kore would send them far more than they asked for, and charge them accordingly (presumably down to the Sales Director who was eventually found to have been also stealing stock from the warehouse to sell on ebay, and covering his tracks with false invoices)

Venator wrote:
I have wondered if GW might not try to break in to this market, as they did with collectable card games.
they did: Sabretooth also produced a pre-painted Lord of the Rings Collectable Miniature Game a few years back, its been dead for a while tho so must not have been a success


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PostPosted: Thu Sep 07, 2006 1:08 am 
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Here is some insight that might be helpful to the discussion. It is the "stock market" approach to GW.

http://www.hemscott.com/companies/compa ... anyId=2668

And here is the even more intresting annual report from GW to calm down their shareholders:
http://investor.games-workshop.com/inve ... counts.pdf

Apparantly they make still a lot of profit (3 million £) but sales are declining for the third year in a row. I guess the heydays of Lord of the Rings are over.

I'm convinced that how you run a company and how you run your game and treat your costumers has also a lot to do with if you are a shareholder company (GW) or privatly owned. As a shareholder company your primary responsability is not towards your workers or costumers, but to your shareholders. That means that profit must always increase, otherwise you are stagnating and a failure. So even if you run your company makes a respectable profit but stops growing, you shareholders will be pissed of and give you a hard time. GW is mainly owned by the Royal Bank of Scotland and Several Bank Small/Midsized company Portfolios. But this pressure of course forces you to a high degree of professionality that a lot of other companies lack.

From my point of view, that is why IKore and the like crashed.

But I still prefere a privat owned company that is run professionaly: PrivateerPress and Battlefield both make quite a good impression so far.


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