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Subject: OBG 96: We Salute Games rss

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Donald Dennis
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Dan Yarrington joins Erik and Don to talk about Gamesalute and their vision for the gaming industry.

In the review-a-palooza, Erik and Don review:
Martian Dice
Pink Hijinks
X-Wing
Elder Sign
Bohnanza


http://onboardgames.libsyn.com/obg-96-we-salute-games

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Game Salute
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Thanks for inviting me on the show, and thanks to all the fine folks who sent in questions and comments to help inspire the discussion!

- Dan Yarrington
CEO, Game Salute
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Wyckyd
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Dan, thanks a lot for the info on the distribution of games. Very informative
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Frank Feldmann
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My game buying is a mix of online and local. I also own the game library for my group. I am the only provider of games.

The statement was made that the limitation on gaming is time, not money. Therefore it would be just as beneficial to buy two games locally rather than three games online. I might be willing to agree with that if I knew which games to buy. However, if I am buying three games I have a better chance of buying a game my group likes.
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Eric Knauer
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Very rich interview. Thanks.
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Erik Dewey
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Game Salute wrote:
Thanks for inviting me on the show, and thanks to all the fine folks who sent in questions and comments to help inspire the discussion!

- Dan Yarrington
CEO, Game Salute


Thanks for joining us. My only disappointment was that you were so thorough that every time I thought of a point to add, you addressed it before I could ask it.
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Esteban Fernandez
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Best outtake ever

Episode was great, one thing I like to address is the affirmation that "In Europe games are played in social clubs" wich is wrong, it is different on each case.

Some people meet at clubs, that is right and is more common on big cities like Madrid, but lots of people meets in other people houses, or in Community places that the goverment have for clubs and social groups.

Still there are shops that do board gaming demos

My point is that there is not a common way of meeting/playing games in Europe, I guess it's mostly the same that elsewhere.
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Game Salute
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Sorry to be so thorough, Erik. There's a lot to discuss and I do tend to talk in detail.

Thanks for the feedback, Esteban. Here in the US, folks do play in community centers, churches, stores, at individual homes, and other places. Sounds like the percentage of play that occurs in stores is just higher here in the US.

- Dan Yarrington
CEO, Game Salute
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Stuart Platt
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Firstly, really enjoyed the episode.

Dan, you are an engaging, charismatic and thoroughly entertaining listen. You obviously care passionately about your cause and are a natural born salesperson.

You also have very strong arguments as to why the Game Salute business model is, ultimately, better for the producers of the content and I agree it would be 'better' for all concerned should the market pull back from the 'price inflation - discount' model it which it seems to be stuck.

In isolation, however, I feel you are little more than the girl with her finger in the leaky dyke. The weight of control is too strongly with the distributors and online retailers who are driving down the margins for content creators - and that sentence could apply to no end of other entertainment including Hollywood, video games and TV - let alone our little cottage industry.

You are cast as the villain - price fixing and restricting products for personal profit and it is in many people's interest to maintain this illusion. This makes me sad.

When is a $50 game not a $50 game? When it's a $40 game, inflated to $70 to get a margin, then discounted to £50... Madness!

 
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Brandon Hawkins
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Excellent episode. I hope you guys have Dan on again in the future.

Maybe I am just imagining things, but Erik's sound quality seemed better to me this episode.
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Game Salute
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Thanks for the kind words, Stuart.

You're correct that the standard, entrenched way of doing things is well established. We're introducing an innovation of process and it will take time to take hold, but more and more folks are recognizing the benefits of better practices, so we'll see how things develop and when we start to see the default shifting.

- Dan Yarrington
CEO, Game Salute

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Donald Dennis
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theatlas wrote:
Excellent episode. I hope you guys have Dan on again in the future.

Maybe I am just imagining things, but Erik's sound quality seemed better to me this episode.
we'd like to have Dan on again, and Erik did indeed buy a better mic.
 
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Erik Dewey
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theatlas wrote:
Excellent episode. I hope you guys have Dan on again in the future.

Maybe I am just imagining things, but Erik's sound quality seemed better to me this episode.


Man, I'm glad someone said that.

We've been getting a few emails talking about the lack of quality on my mic, so I picked up a new one. In fact it arrived the day we recorded the round table.

I still need to tweak some settings, but it is definitely a fuller sound and much less popping.
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Aaron White
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Great stuff from Dan this episode. Very insightful, although it did seem to run pretty long. I'm just one listener, but I'd like to see interviews limited to a 45 minute maximum, and overall podcast length kept to 1.5 hours or less.

My favorite thing about this episode is that you talked about Bohnanza! I purchased this for my kids as a Christmas present this year and have never played it. After hearing the review, I'm very confident that I made a good choice.
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Donald Dennis
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ChiefAaron wrote:
Great stuff from Dan this episode. Very insightful, although it did seem to run pretty long. I'm just one listener, but I'd like to see interviews limited to a 45 minute maximum, and overall podcast length kept to 1.5 hours or less.
Not a bad goal to shoot for, I just feel strange saying "It's time to wrap up" when we don't really have any programming limitations. Still, we'll try to keep an eye on the clock - it might limit some of the repetition.

ChiefAaron wrote:
My favorite thing about this episode is that you talked about Bohnanza! I purchased this for my kids as a Christmas present this year and have never played it. After hearing the review, I'm very confident that I made a good choice.


Let us know what you think after you get it to the table.
 
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Frank Feldmann
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Walsfeo wrote:
I just feel strange saying "It's time to wrap up" when we don't really have any programming limitations.


I think you did say that - about three times. Just sayin'...
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Donald Dennis
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feldmafx wrote:
Walsfeo wrote:
I just feel strange saying "It's time to wrap up" when we don't really have any programming limitations.


I think you did say that - about three times. Just sayin'...


Ha!

The problem was probably me saying "before we wrap up, do you have anything else to say". And that's usually about the first time Erik gets the chance to talk in an episode, so he just goes wild.
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Ray Greenley
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I also really enjoyed the episode! As a counterpoint to above, I don't mind when interviews go long if they're as interesting as this one was! I could have kept listening.

I actually had a question that I followed up on with Dan. I was confused as to how the 'price inflation' was happening in response to online stores. I sent Dan an Email, and after he replied it still wasn't clear, so I replied back to him again. Then he offered for me to give him a call to talk about it on the phone. Talk about a personal approach! I chatted with Dan for about twenty minutes and finally I was able to understand what's going on (if anyone's interested I can elucidate my question and my understanding of the answer).

So, thanks to On Board Games for having the topic, and thanks to Dan for further information. :^)
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Donald Dennis
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RMGreen wrote:
I also really enjoyed the episode! As a counterpoint to above, I don't mind when interviews go long if they're as interesting as this one was! I could have kept listening.

I actually had a question that I followed up on with Dan. I was confused as to how the 'price inflation' was happening in response to online stores. I sent Dan an Email, and after he replied it still wasn't clear, so I replied back to him again. Then he offered for me to give him a call to talk about it on the phone. Talk about a personal approach! I chatted with Dan for about twenty minutes and finally I was able to understand what's going on (if anyone's interested I can elucidate my question and my understanding of the answer).

So, thanks to On Board Games for having the topic, and thanks to Dan for further information. :^)


Please share!
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Eric L
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RMGreen wrote:
I chatted with Dan for about twenty minutes and finally I was able to understand what's going on (if anyone's interested I can elucidate my question and my understanding of the answer).


Please do as I have further questions myself and you might have gotten a good answer already.

I am new to the show, and I have to admit this one simply was one of the most excellent gaming podcasts I have ever heard. Dan was incredible to listen to and I applaud his efforts and am ready to quit my job and join him in the revolution! You have room for a 19th employee yet?

This kind of insight, experience, and openness is rare and very hard to come by. I really enjoy getting to peek into and understand better areas of industry/science/society that I have no exposure to nor time to explore on my own first-hand. Although I still have plenty of knowledge gaps, I felt invigorated by Dan's explanation, instruction and vision.

Wow.
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Ray Greenley
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So in listening to the episode, it sounded to me like Dan was linking the raising of board game MSRPs ('price inflation') to the discounts provided by the online stores. This didn't really make sense to me. Doesn't the publisher sell the game for the same wholesale price regardless of what price it's sold for at retail? Why should the publishers need to raise their prices if they're getting the same amount anyway?

The answer was that I thought I heard a causality where there wasn't one. The publishers aren't raising prices because the online stores sell at a discount. They're raising prices because they want/need more money to operate. They'd likely be raising their prices even if we didn't have the online discount stores. The online discount stores are just allowing them to raise prices without impacting the customer as much.

Perhaps if they didn't have the online discount stores to soften the impact of increased prices, they'd find another way to improve their margins. Maybe we'd see a drop in component quality, or maybe they'd push for a better wholesale price from distributors. But with margins as thin as they're purported to be, it seems unlikely to me that the consumer would be able to avoid having to pay more for their games.

That's around where my discussion with Dan ended. What follows is more of my own thoughts on the situation with that understanding in hand (head?)

So in the end, what we seem to have is pretty much the same issue between brick and mortar and online stores that's affected almost every facet of retail in the last 15 years. It's tough to 'blame' online stores for running an efficient operation and getting sales as a reward. It's tough to 'blame' publishers who need to sell these games to stay in business, and the frank facts are that online stores are offering them a better margin for their games.

So who's left to 'blame' except the consumer? Game stores obviously offer services beyond a place to buy games, and really it's up to the consumer to support the places that offers those services (presuming the consumer uses those services). A consumer who wants to use the services (play at a store), but not pay to support them (buys games online anyway) is being, to an extent, irresponsible.

Maybe that's why there are some heated discussions about Game Salute's policy of not allowing non-local sales of their games (was the discussion 'heated'? I didn't read the thread.) The policy is in effect encouraging consumers to be more responsible with their purchases, either giving support to their local store or giving more support to the publisher/designer by buying direct from Game Salute. I can easily see how this would rub some people the wrong way.

For my part, I'm perhaps a part of the problem. I generally do most of my game purchasing through online stores. But I also don't have a decent board game store within a reasonable distance. The one store that's even close to within range is very heavily comics/MTG/miniatures weighted. They carry just a bare handful of boardgames and don't have a dedicated boardgame night (although their play area is fantastic). Should I spend extra time and money to support a store that doesn't seem all that interested in catering to my interests?

What do you think?
 
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Chris Berger
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I've been going back and forth about whether or not to post on this topic, because it seems to lend itself to flame wars. However, this thread seems to have been civil so far, so here goes...

First off, as someone who leans towards support of Game Salute, I'm not sure I buy the whole "online discounting leads to inflated prices", because I have several games that were distributed/fulfilled/whatever by Game Salute, and the prices tend to be on the $40-50 range just like other games. Alien Frontiers is a $50 game from CMG, and it would have been a $50 game from Ystari or FFG (or it would have been a $60 game from FFG, but would have had better components - not that I think AF has bad components, but they're not quite FFG-level). The issue comes from people who are used to getting $50 games for $35. Instead of thinking "hey, I got a great deal on that game," they think "I should be able to get all games that retail for $50 at $35, and hey, shipping should be free too". Dan did kind of touch on that. If something sells widely for $35, then $35 is the new perceived value of it.

I see the whole Game Salute / online retailers divide in a different light, though.

Say that a customer buys a game at retail. They are paying full retail, but the store is providing added value. They provide immediacy (I see this game, I buy this game, I get it now), browsability (this game looks cool, I'll buy it; I thought I was interested in that game, but now that I see it, not so much), and often additional services like knowledgeable consultation, demo copies, and play space*. In addition, you don't have to pay shipping charges. Now, a lot of OGS's provide free shipping, but it usually has a threshold that's more than the price of most games. So you can either look at that as "no shipping cost" or as the ability to buy one game at a time instead of one game you really want and something else that might just sit on your shelf in order to qualify for free shipping. As someone who belongs to two game groups where other people own a lot of games (most more than I do), and who doesn't see the value in buying many games that other people own and will bring to the table, that last part is valuable to me.

The important thing for the publisher is that most of those value-added services are also adding value for the publisher. They get word of mouth and often table-time that translate into more sales, either retail or online, and often increased interest in their future products. Games with no in-store presence tend to sell less. Games with huge in-store presence, like demo-days, promos, tournaments, etc., tend to sell more.

Now assume that the consumer buys the game directly from the publisher. They don't get access to the added value from a store, but with online shipping, they can likely get the game anywhere. It's not a great deal for the customer, but it is a good deal for the publisher, since they get to keep a higher percentage of the sale. A customer who is interested in supporting their favorite publisher, or who cannot get the game any other way, is usually fine with that. You could say that the publisher should sell the game cheaper, but by doing so they undercut the price of the local retailers, and companies that do that risk getting blackballed or squeezed out. It has happened in the past, and retailers hate it. Retailers don't support publishers they hate, and so publishers tend not to do that.

Now look at an online game store. They also provide no added value to the customer, but unlike the publisher they're also not necessary to the process. They make up for not providing any additional value to the customer by giving deep discounts to the customer, passing on the savings of not having a physical location or providing any real services. This is fine for the consumer, but my real point is that they also don't provide any added value to the publisher. Just the ability to sell the game online doesn't add any value to the publisher - they already have that if they have a website with shopping cart or fulfillment by Game Salute. The publisher is more or less forced to sell to them at the same price they sell to the retail store, but they don't get anything out of it. You can say that they get more sales out of it, but when those sales undercut their retail sales, they stand the same danger of being squeezed out of the stores. As Dan mentioned, it devalues their product to the point that people no longer believe that it's worth the $50 price point, but that it's only worth the discounted price.

Long story short:
- retail store provides added value to both customers and publisher.
- online store provides no added value, offers lower price to customer, but damages value of the product (essentially negative value to the publisher)

I see, actually, that the short version is something that Dan mentioned, but I guess I just didn't feel that his argument was convincing. Yes, the type of brand devaluation caused by online discounters could lead to price inflation, but since I haven't seen much of that yet, it sounds more like a slippery slope argument. More convincing to me is that the online retailers don't offer anything to the publisher - large publishers can probably get away with it through volume and economy of scale, but I want to see small publishers like CMG, TMG, Plaid Hat, etc. make enough money to keep putting out fantastic games.



*Also, things like closeout bins, customer notification ("I think this is a game you might be interested in, what do you think?" OR "I'll let you know when that thing you wanted comes in.", frequent buyer discounts. One of my local stores does and awesome Live Auction twice a year where the buyers get a great deal and the sellers get the full value of what they sold, but in store credit rather than cash - everybody wins, basically.
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Ray Greenley
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arkayn wrote:
First off, as someone who leans towards support of Game Salute, I'm not sure I buy the whole "online discounting leads to inflated prices"

That's where my question was, and the answer ended up being that online stores don't lead to inflated prices, they just allow board game companies to institute price increases without having as great an impact on the customer.

I'd also suggest that the online stores do offer something to publishers: higher margin. That may not entirely be worth what they lose in the other services granted by physical stores, but that's kinda up to the publisher.
 
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Chris Berger
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RMGreen wrote:
Should I spend extra time and money to support a store that doesn't seem all that interested in catering to my interests?

What do you think?


No.

If the store sucks, then it's their own fault. The one thing I think is reasonable though, is that when you get a game for $35 that retails for $50, and you get free shipping on top of that - appreciate that you got a good deal. If there's a game that costs $50 and you actually have to pay the price of the game, and oh... if the game isn't where you are, you have to pay to make it get to you... well, if you really want the game, then apply your savings from the other game toward this game. If you don't really want it, then don't bitch and moan and say that the publisher is evil and stupid. You don't know their business operations and costs, or what margin they can afford to give away on their products.

I'm not saying you do that, but that seems to be the general direction of the "I hate Game Salute" threads.
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Chris Berger
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RMGreen wrote:
I'd also suggest that the online stores do offer something to publishers: higher margin. That may not entirely be worth what they lose in the other services granted by physical stores, but that's kinda up to the publisher.


I do not believe that's true. I think that if a publisher/distributor sold to online retailers at a higher price than a brick-and-mortar, it would be considered price discrimination. I think the only real way around getting less value for the same margin is to not allow online sales of your product.
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