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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:
------------------------------------------------
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.)
------------------------------------------------

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
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Steven Dennis
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Guess I should hurry up and buy any Mayfair games I have on my want list.
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DrChek wrote:
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.
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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.
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Jonathan Degann wrote:
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
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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.
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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.

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Interesting development - I guess the market will decide if it's a good path.
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It really depends on how well they can police it, and what they can actually do about it.
 
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BoardsAndBits wrote:
As a retailer I am constantly frustrated by games that sell out quickly after release.
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?
 
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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.

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


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


I agree completely. Boardgames are too popular as it is. I've always hoped there could be some way to purge the hobby, and this is just a good a way as any.
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Relax wrote:
BoardsAndBits wrote:
As a retailer I am constantly frustrated by games that sell out quickly after release.
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 guess what I was trying to say is that in the current market, it's very difficult to know how many games to publish. Before online retailers were pervasive, and before BoardGameGeek/BoardGameNews/BoardGamePrices were the norm, 3-4000 games probably lasted a while. Now, it's like concert tickets that sell out in the first 15 minutes, which is frustrating for customers that don't get them, and sellers that wish they had more.

I think that higher prices means less titles selling out as quickly. As a retailer, I don't have a problem with this.

Tom
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Joe Cool wrote:
Aldie wrote:
Interesting development - I guess the market will decide if it's a good path.


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.

Bose (speakers) has done this for years, and Games Workshop does it.

IMO, price fixing refers to retailers joining forces to set the price, essentially creating a monopoly (pardon my French).

In this case, Mayfair isn't setting a price. But they have decided not to sell to customers (distributors and retailers) that sell their games for a lower price than they'd like.

Doesn't Mayfair (or anyone for that matter) have a right to sell or not sell to anyone they like?

As a retailer, I believe I can choose not to sell to anyone for any reason. Of course I rarely turn anyone down, but Mayfair is choosing to take a stand. It's actually very ballsy.

Of course I'm not a lawyer, so I could be wrong

Tom
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Jonathan Degann wrote:
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.
Well, they obviously feel that they are up to the challenge.
 
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Does this mean that the 50% coupons for the Ribbon Quests at the big cons are no more?

The effect this will have on me will be moving Mayfair games into "try before I buy" category. And it will take a really great game before I get one, because usually if I am trying it, it means a friend already has it. Good news for my long term goal to rationalize my game storage.

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BoardsAndBits wrote:
Joe Cool wrote:
Aldie wrote:
Interesting development - I guess the market will decide if it's a good path.


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.

Bose (speakers) has done this for years, and Games Workshop does it.

IMO, price fixing refers to retailers joining forces to set the price, essentially creating a monopoly (pardon my French).

In this case, Mayfair isn't setting a price. But they have decided not to sell to customers (distributors and retailers) that sell their games for a lower price than they'd like.

Doesn't Mayfair (or anyone for that matter) have a right to sell or not sell to anyone they like?

As a retailer, I believe I can choose not to sell to anyone for any reason. Of course I rarely turn anyone down, but Mayfair is choosing to take a stand. It's actually very ballsy.

Of course I'm not a lawyer, so I could be wrong

Tom


So you're going to keep selling Mayfair games at 40% off just to see what happens, right? devil
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BagpipeDan wrote:
Rokkr wrote:
Furthermore I will actively encourage anyone I have contact with that games to boycott them as well.


I agree completely. Boardgames are too popular as it is. I've always hoped there could be some way to purge the hobby, and this is just a good a way as any.

Your confidence in my ability to destroy an entire industry is touching, if not rational.

And if you think of board games as a "niche" industry, I'd refer you to Aldie's photos of his Essen haul.
If there's so little money in the business, why are there so many games being produced each year? People don't make things to lose money, at least reasonably intelligent ones don't.

Look for Mayfair games also to increase even more in price if they start spending money to police and enforce their policy.




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Jonathan Degann wrote:
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.


And you don't see this line of reasoning as part of the problem itself? People now EXPECT deep discounts, or they refuse to buy at all? Then what's the point of MSRP pricing?

Personally, I see it as a misplaced sense of entitlement. Face it, some vendors are being undercut, and too many stores are struggling to make ends meet. Pontificating about what stores OWE people is further proof of this misguided concept.

It's daring for Mayfair to take this stand. It's clear that they value the local retailer just as much as the volume discounter, and want to keep both happy and in business.

Rokkr wrote:
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.



Boycotting Mayfair Games won't make games cheaper. It may close down Mayfair. And I don't see that as helping gaming in part or in whole. It's more along the lines of cutting off one's nose to spite one's face.

I'd rather continue to see the quality games from Mayfair remain in print and available from both retailers and online vendors. Are we so afraid of a level playing field between these two types of business entities?

Some of us have just become too spoiled with deep discounting, and take it for granted. IMO, it's gone amok, and this just may be the start of bringing it back to a somewhat reasonable level that can ensure sales, as well as preserve the existence of local gamestores on the gaming landscape.
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Quote:
Trade customers that violate these guidelines shall be subject to sanctions. If necessary, we will cut them off.


Love the use of adjectives. Are they lifting text directly from US political protocol?

Mayfair, if they violate your guidelines, make sure you cut them off where it hurts. Gut shots are good too. Slow and painful.

Good luck enforcing this.
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I wonder how this will apply to the ubiquitous eBay auctions of various Catan games.
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Rokkr wrote:

If there's so little money in the business, why are there so many games being produced each year?


That explains itself. If you only expect to sell 3000 of any given product you'd better have a LOT of different products to sell.

-MMM
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No more Mayfair for me.*

Not that they've been producing anything compelling for quite a while. :/

This move shows such a fundamental misunderstanding of their business and customer base that it is breath-taking; but then, they've never been great business people.

* The only possible exception being the new edition of AoS, but even that might well be acquired on the secondary market.
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Whoah!

This single decision on their part has the ability to generate almost countless effects. My brain overload feature kicked on when I tried to think about how this could affect who and why. I have to imagine this decision was long discussed and planned on their part.... and yet ....there a several things about it that strike me as odd...at a minimum.

Increasing cost to the base client will result in fewer overall sales. This "extra" profit will mostly end up in the hands of the retailer who will now have fewer logistical issues and more money.

How does Mayfair benefit from reducing sales?
Unless they raise their base price to compensate, this is mystifying. Fewer sales mean smaller print runs which have a higher cost per unit. I see no way that fewer sales helps Mayfair. Fewer sales means LESS money not more for them. Not to mention the effect on their market share.

Does this mean they will raise prices to compensate?

If they do raise prices, we consumers get hit twice with the same hammer, don't we?
Once for the fixed 20% maximum discount and once more if they need to hike up the base price.

Are they trying to mold themselves into a "premium" brand?
Um, I hope not. They are competing for entertainment dollars, which is the fastest shrinking budgetary concern. No gamer I know would be prone to spend extra money on a game because of a namebrand issue. A good game is a good game regardless of the publisher.

Are they going to lobby other publishers to follow suit?

Do they really believe that their product to be that superior to what the other publishers have?
Well, if they really think that, then they had better plan on upping the production quality of their product. I am not saying they make poop but they are SLIGHTLY above average at best, and I do not think that equates to a premium price tag.

Should they feel their product is really a superior one, then how does this plan account for future products?
Why would a designer that gets royalties want to sign on to a company that has a plan including fewer sales...meaning less money and fame.


These are just a few of the questions swirling about in my nugget and my knee jerk reaction to my own questions. I hope they have answers to these and MANY other questions already established. This requires much more thought on my part to become clear.

Rick
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