This will undoubtedly be public knowledge very soon (if it isn't already), so I thought I'd post the message here and let BGG'ers decide what the effect will be.

Mayfair announced today that they are requiring a 20% cap on discounts for their games. Here is the message that was forwarded from my distributor:
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Dear Trade Customers,
Greetings from Mayfair Games! Our team wishes you all well. After all, we wouldn’t be looking forward to our 27th year of publishing fine games without your strong, enduring support.
We’re writing to you to outline our retail pricing policy. Our manufacturer’s suggested retail prices (“MSRPs”) reflect our firm belief in a healthy balance between “free trade” and “fair trade.” Mayfair Games embraces and supports healthy competition. We feel that in order for our market—and thus our company—to prosper now and over the long term all our partners in the distribution chain need to respect this balance.
Whenever a firm threatens healthy competition among our trade customers, and thus endangers this balance, we must act in a vigorous, even-handed fashion to police the distribution and sale of our fine products. Mayfair Games doesn’t intend to specifically dictate how its customers do business… but we will act in cases of predatory, irrational, or patently detrimental trade activity.
So, it’s important that all of our trade customers know where we stand on pricing and discounting…
• Distributors should sell Mayfair Games products at no less than a 25% margin or no more than a 50% discount off MSRP.
• Retailers should sell Mayfair Games products at no more than a 20% discount off MSRP, or the appropriate ratio given exchange rates.
Trade customers that violate these guidelines shall be subject to sanctions. If necessary, we will cut them off.
We’re well aware of the fact that our individual customers operate under individual circumstances. Some are more profitable than others. Some seek to establish themselves or need to acquire some critical market share. Mayfair Games understands, and sympathizes with, this reality.
At the same time, we’ve been in business long enough to know that that it’s far better for us to encourage healthy competition rather than cutthroat discounting. Ours is not a mass-market business, nor is it a business based on inter-changeable widgets. Our wares are special, unique, premium games. Savage discounting is unnecessary and counter-productive for everyone in the mid-to-long term. While some individual consumers might benefit in the short-run, rabid discounting only acts to erode the profits and incentives necessary to keep our market healthy.
As it is, consumers receive great entertainment value for full MSRP. It’s unnecessary—and even a bit insane—to subsidize folks who already enjoy a good deal. It is far healthier for us, our distributors, and our retailers to derive a healthy profit from the sale of our games than it is for us to see them dumped into the marketplace. Every viable firm in our distribution chain should collect its fair profit and have an incentive to further promote, buy, and sell our games.
Our trade customers should endeavor increase their profit margins, not their discounts. They can thus improve service, which—along with the high quality of our games—should be the principal means of growing our market.
Mayfair Games asks all its trade customers to understand that we are partners in growing a healthy games market. Again, we want free and fair trade. It’s healthy… for all of us. It’s in our best interest… and in the best interest of the entire social game industry.
That’s all for now. Take care.
For Mayfair Games,
Pete Fenlon
(CEO, Mayfair Games, Inc.)
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Now I'm going to be totally up front with my feelings about this.

I am not unhappy about the cap, for 3 very good business reasons:

1. I will make more money when I sell Mayfair's games

2. I will not have to worry each day about who is undercutting me, and should I lower my prices to compete with them

3. Successful retailers don't have to compete on price if they have something more to offer

This does not mean that I'm happy my customers will feel screwed, but it will make my life a little easier, and hopefully this will allow me to provide even better service and products to my customers.

Hopefully I won't get in trouble for posting this (don't know why I would, but you never know), but as soon as I raise my prices everyone will know anyway.

I have no idea if others will follow. If they feel the same way as Mayfair, they'll probably do the same. Otherwise, they'll probably wait a while and see how things go for Mayfair.

Thoughts?

Tom
Boards & Bits
www.boardsandbits.com

Guess I should hurry up and buy any Mayfair games I have on my want list.

Yep, that about sums it up...

I will also say that, as a poor grad student, I'll be buying less games if this idea spreads. I am not unsympathetic, but that is just the reality of being poor.

They've put themselves at a competitive disadvantage IMHO. Mayfair will have to produce a very special game to be worth the premium to me. I would never have bought Pillars of the Earth if it were $40.

I agree that less games will be sold.

But I also agree that Eurogames are not really a mass-market item. As a retailer I am constantly frustrated by games that sell out quickly after release. You would think this would be a good thing for a retailer, but I hate going months without being able to sell a hot new game (Thebes, Caylus, Zooloretto, etc.)

Looking at your example, I'm thinking to myself that it actually has a positive effect. In order to sell games at this higher price, Mayfair will *have* to produce better games. I would think that in itself would be a positive effect on the industry.

Tom
Boards & Bits
www.boardsandbits.com

Woohoo, good thing all the games I want are being published by Rio Grande! Didn't sound like Jay was thinking too much about this whole pricing thing the last time he was interviewed about it.

Anyways, doesn't this just hurt consumers as well as Mayfair? Customers have to pay more if they want a Mayfair game, and Mayfair is now at a competitive disadvantage when sold via online retailers. I don't know what percentage of games is sold online vs. physical locations, but it would seem that Mayfair is dealing a blow to itself with this practice. Plus, it appears their purpose is to even the playing field between online and B&M, but if they want to balance the playing field, why even allow a 20% discount? 20% is still a heck of a lot better than full retail, and isn't going to send people running to stores instead of buying online.

Overall, I'm guessing the only ones happy about this are the internet retailers. Like Tom said, they now make more money per copy sold and don't have to worry about someone undercutting them. I'm glad the outcome is good for someone, but I doubt its what Mayfair had in mind when they made the decision.

People may do as they choose, but personally from this moment on, I will not buy Mayfair products under any circumstances.
Nor will I recommend any of their products to anyone else. I teach boardgames weekly and I will not teach any of theirs from this point on.

Furthermore I will actively encourage anyone I have contact with that games to boycott them as well.

Interesting development - I guess the market will decide if it's a good path.

It really depends on how well they can police it, and what they can actually do about it.

I'm not sure I understand. Don't you mean you are frustrated at the suppliers inability to supply said games, not that they sell too quickly? If that's the case, I don't see how what Mayfair is trying to do will solve your problem. If that isn't the case and you'd really rather sell less product, well, I'm not sure I understand your thinking here other than the possibility that while you're selling less you're still making the same money though the forced mark up, but is that likely to happen?

I see no reason to fret. Boardgames aren't all that expensive and the futzing about trying to save a few bucks may mean less games for a few people but better games in the market as natural selection takes over. Insofar as boycotting them goes, I imagine the reaction to most corporate policies would upset people enough to boycott every company in the world.

Yes, they are indeed experimenting.
I don't really care - I have never really been interested by Mayfair games - but I am surprised that it is lawful to force their customers to sell to a fixed price.