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HolySorcerer

Interview about new FFG policy. Yes, they're jacking up online prices.

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Yes, it's true. This concept of helping out the "local retailer" via wholesale price manipulation is not new. But I haven't seen any evidence that past efforts have paid off to the extent that interested parties had hoped.

Edited by Otakuon

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Because that is just one part people in this thread is focused on. There seems to be quite a few moving parts in this new direction. 

 

One benefit that can come out of this is by making it less appealing for stores to by in numbers that they can never hope to sell and just burning off the excess through their ebay/amazon stores. 

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@Otakoun

Yeah, it is part 2 that is important to this discussion. The part you actually quoted is what I think some have been focusing on. The explanation leading up to that summary is chocked full of important information that shouldn't be overlooked.

The full text for the second quote you found interesting is:

"The most significant obstacle in the growth and perceived value of the gaming business is the need for players to find other players, and for new players to enter the hobby. I estimate that the hobby loses between 10 - 20% of its players every year, so the creation of new players into the hobby is vital for every participant to have a thriving marketplace and have exciting new products developed."

That number sounds high to me, but I don't have data to support that. Taken in full his statement is easier to understand. He is just saying that the hobby loses players every year, and if it is to continue to grow it will have to gain more new players than it lost. This makes perfect sense to me.

For example. I was a 20+ year cable tv subscriber. This year I cancelled all my cable services except for Internet and went exclusively streaming for my tv viewing. I saved almost $80 a month, which isn't really important to the conversation, I just thought I'd toss it in. What is important to the conversation, is that, if the cable company wants to continue to grow its customer base, they will need to find 2 new customers. One to replace the one they lost, me, and one to actually grow.

I think you are correct in identifying Petersen's changing role. I think we are also witnessing the growth of FFG from a small company trying to establish their market share to an industry leader trying to protect (and grow) their market share. I actually found this article refreshing and informative. Petersen's is running a business , not a nonprofit organization. The level of information he owes the consumers is not the same as he owes the board of directors. I think he did fine and was suitably forthcoming in the article.

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But where is this evidence that the hobby is losing players? Or maybe, he needs to clarify what he means my "loosing". Is he saying that fewer people are playing games every year overall or are less people buying games every year? Again, in my estimate, the trend is the exact opposite for both of those points.

Your example of the current trends with the cable TV industry is actually quite appropriate. What is the #1 reason for people cutting the cord? Also, slow adaption to changing consumer trends comes into play too...

Edited by Otakuon

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But where is this evidence that the hobby is losing players? Or maybe, he needs to clarify what he means my "loosing". Is he saying that fewer people are playing games every year overall or are less people buying games every year? Again, in my estimate, the trend is the exact opposite for both of those points.

He is saying what I was trying to illustrate with my cable example. Every year the gaming industry loses a certain number of players. If the gaming industry is to continue to grow it must find more new players than it loses. So, if 100 people quit the hobby this year, it needs to find at least 101 new players to continue to grow. It would naive to assume once a gamer always a gamer.

It is possible to lose current players and still grow the industry. You just need to pick up more new players than old ones you lose.

Edited by Starbane

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Starbane, on 02 Jan 2016 - 8:56 PM, said:Starbane, on 02 Jan 2016 - 8:56 PM, said:Starbane, on 02 Jan 2016 - 8:56 PM, said:

@tokyogriz

Are you telling me that as a business owner if you identified an area in your sales model where you were overpaying for services rendered and had the ability to fix it, you would choose to continue to overpay for said services?

Furthermore, their former sales model has lead to devaluation of their product. This is actually their own fault for adopting that sales model and they recognize that. By paying online sellers for services they weren't providing they allowed them to slash prices for their product and still make an acceptable profit margin by selling more at an artificially low price point. On the surface this was good for the end consumer (us), but actually bad for their business model by devaluing their products.

To some extent you are actually proof that they have made the right business decision for what they wanted to accomplish. You have benefited from the artificially low price of their product for so long that you refuse to pay what FFG has determined to be fair market value for their product, a price point that hasn't actually changed since the inception of the product line. I want to stress, I'm not accusing you of wrong doing. All you did was expertly shop for great deals, and good for you, why shouldn't you find the best deals possible. However, by continuing to overpay for services rendered, FFG facilitated the continuation of the artificially low price points for their products to the point that now some of their consumers, like yourself, value their product at these lower prices to the point they refuse to pay the price FFG intended all along. This is bad for their business and had to be corrected once identified. At least this is what I believe they are saying in the article.

I don't the think you should be happy you are going to be paying more in the future as a consumer if you continue your same purchasing routine, but I would expect as a business owner you would be more understanding of why they have taken the actions they did.

 

 

The MSRP of almost all game stores is ARTIFICIALLY HIGH.  This is the actual inefficiency that online sales addresses.  How many gamers sit around wishing prices were higher?  Zero... except for those on this thread advocating on how great Asmodee is.

 

MSRP is not a REAL number.  Its a RECOMENDATION

 

The real number is the price the Company sells the product to distributors for.  After that market demands create a real price point.   Asmodee is attempting to stunt online sales that are more efficient than many brick and mortar stores.  This is direct interference in the market to try to artificially inflate the value of their goods at the retail level.

 

You and anyone thinking that they can try to force MSRP in any industry on people in the internet age are deluding yourselves.

 

I would add that in order for the customer to feel MSRP is not a rip off they need to feel that more is offered than just the physical product.  Excellent service, comfortable environment, etc etc... each person will have a different idea of what these values are.   When these needs are met then and only then can a local store selling at MSRP really offer full value to their customers.  Hence the discussion about this previous in thread.  Again most stores selling games do not fit this description for me and many other gamers. 

 

Asmodee is not addressing local store deficiencies they are simply trying to use economics to force local sales. 

Edited by Tokyogriz

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Your example of the current trends with the cable TV industry is actually quite appropriate. What is the #1 reason for people cutting the cord? Also, slow adaption to changing consumer trends comes into play too...

It is not really the same thing at all. With my change from cable to streaming my viewing habits are barely affected at all. I still receive the purchased product through my tv, iPad, and iPhone. All that's changed is who I'm buying it from and how much I'm paying for it.

In the case of this thread we are talking about FFG's sales model and how much they value their various business partners.

Adapting to changing consumer trends is exactly what ANA is doing. They just aren't doing it in the manner you are expecting them to. They see the increased online sales and the devaluation of their products as a negative trend and I understand why. They are not trying to eliminate online sales or reduce the number of product sold online, although that is a likely short term result (which they recognize). Petersen even says they see them as an important part of their business. ANA is trying to reverse the trend of the artificially low prices of online sellers devaluing their products. They believe this will be good for them, the industry, and ultimately the consumers, although some of us may not believe this part possible at the moment.

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It is possible to lose current players and still grow the industry. You just need to pick up more new players than old ones you lose.

I get thet. Mr. Petersen is obviously talking about "churn". But I still propose that unless he has evidence to the contrary, the industry is experiencing net growth. I guess I would just like him to explain how they propose increasing growth by bolstering "brick and mortar specialty retailers" beyond just increasing the wholesale prices for "specialty online retailers". Because it will take a lot more than just product price to increase traffic and get new people to shop at "brick and mortar specialty retailers". Left to their own devices, most local hobby stores will continue to do business as usual if allowed to do so.

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This is not a 'No true Scotsman' argument. It's the recognition that there are many different qualities of stores that sell games. When I say FLGS, I mean the subset of local gaming stores that are of excellent quality, have people who will run OP events, provide a wholesome environment, and bring new people to the game (and thus provide value to FFG).

It certainly looks like one to me, even with the additional explanation. A bricks and mortar store that sells games and gaming supplies is just that regardless of if you call it a 'F'LGS or DCBSFWNBT.

 

Ah - I understand now. You wish to rename a reasonable differentiation of a kind as a logical fallacy without taking the time to understand the point I'm trying to make, because you've decided you disagree with it a priori.

 

Gotcha.

 

Well, at that point there really is no point.

 

Have a nice day.

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It is not really the same thing at all. With my change from cable to streaming my viewing habits are barely affected at all. I still receive the purchased product through my tv, iPad, and iPhone. All that's changed is who I'm buying it from and how much I'm paying for it.

In the case of this thread we are talking about FFG's sales model and how much they value their various business partners.

Adapting to changing consumer trends is exactly what ANA is doing. They just aren't doing it in the manner you are expecting them to. They see the increased online sales and the devaluation of their products as a negative trend and I understand why. They are not trying to eliminate online sales or reduce the number of product sold online, although that is a likely short term result (which they recognize). Petersen even says they see them as an important part of their business. ANA is trying to reverse the trend of the artificially low prices of online sellers devaluing their products. They believe this will be good for them, the industry, and ultimately the consumers, although some of us may not believe this part possible at the moment.

You hit the nail on the head with the reason so many people are disappointed in this move. Just as the Internet has allowed people to replace traditional cable TV with less expensive and convenient options, so too has it enabled online retailers to replace traditional hobby game stores by providing better prices and convenience. And just as we are still able to watch our favorite TV shows, but on our own terms, we are still able to play our favorite hobby games, likewise on our own terms. Wether we want to play it in a store, at a convention or in the comfort of our own homes, it makes no difference. We are still all consumers and have the freedom of choice (or at least that is what we expect).

And how exactly have online retailers "devalued" ANA's products? Do you also propose that Netflix, Hulu, etc. has likewise devalued TV shows? Or that Spotify has devalued music? If online retailers were selling games at far less than MSRP it just proves that the MSRP was an over-valued number to begin with. The true value (aka expected price) that ANA places on their products is reflected in the wholesale prices of the products as sold to the distributors. What ANA is really expecting from retailers is "value added" services. That is, that the retailer add value on top of that which ANA has already assigned a given product by hosting events, marketing, etc...which is all done on the retailers dime, not FFG. So for those consumers who find those services "valueless" (because they would rather play at home, don't need to be told what to buy, etc)' online retailers and the prices they sold products at provided them with a real and meaningful "value" that was not "added to" (so to speak).

Edited by Otakuon

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Adapting to changing consumer trends is exactly what ANA is doing. They just aren't doing it in the manner you are expecting them to. They see the increased online sales and the devaluation of their products as a negative trend and I understand why. They are not trying to eliminate online sales or reduce the number of product sold online, although that is a likely short term result (which they recognize). Petersen even says they see them as an important part of their business. ANA is trying to reverse the trend of the artificially low prices of online sellers devaluing their products. They believe this will be good for them, the industry, and ultimately the consumers, although some of us may not believe this part possible at the moment.

 

I think it's important that we're very clear about which price is artificial.

 

And I would suggest that it's not the online price. In fact, I would suggest that this is the real price, and that the MSRP is the artificial one, and that attempting to force customers, who are very in touch with the 'real' price of the product to suddenly start buying at an artificial, higher price, is going to be met with backlash and evaporating good-will from the customers.

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Ah - I understand now. You wish to rename a reasonable differentiation of a kind as a logical fallacy without taking the time to understand the point I'm trying to make, because you've decided you disagree with it a priori.

 

Gotcha.

 

Well, at that point there really is no point.

 

Have a nice day.

Not at all, I just fail to see a resonable differentiation. How is a shop that is local to you that carries a resonable range of games not a local gaming store? From what you are saying my read is that you agree that the local gaming store needs to evolve to survive, you just want to keep the nomenclature the same (sans tagging on an F to differentiate it from other non-evolved game stores) rather than recognising that something new and different is emerging.

Sadly completely. Earlier you said that people distinguishing between dedicated game stores, and comic shops with a selection of games was a "no Scotsman argument". That any store that carries games is the same.

What I've been getting at is that this is a false conclusion. That stores dedicated to gaming (a "game store") are starkly different than a store that sells games secondary to their main focus.

I see. Perhaps my old BBS habit of trimming the quotes in my replies makes my points less clear. The post I was responding postulated that all LGSs that were not shining paragons of the breed should be excluded from the term LGS and used the term Dingy Comic Store etc in order to suggest that a poor game store was not focused on games. That's a blatant falacy to my eyes. I would agree that simply carrying a game or two (Hobbycraft over on our side of the pond carries Warhammer 40k stuff as part of it's modelling stock for example) does not make you a gaming store. Only carrying popular games does not exclude you however.

Side note, if a games store does not provide space to play, game nights, etc or only has the space to allow card gaming does it still meet your criteria as a LGS?

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Starbane, on 02 Jan 2016 - 8:56 PM, said:Starbane, on 02 Jan 2016 - 8:56 PM, said:Starbane, on 02 Jan 2016 - 8:56 PM, said:

@tokyogriz

Are you telling me that as a business owner if you identified an area in your sales model where you were overpaying for services rendered and had the ability to fix it, you would choose to continue to overpay for said services?

Furthermore, their former sales model has lead to devaluation of their product. This is actually their own fault for adopting that sales model and they recognize that. By paying online sellers for services they weren't providing they allowed them to slash prices for their product and still make an acceptable profit margin by selling more at an artificially low price point. On the surface this was good for the end consumer (us), but actually bad for their business model by devaluing their products.

To some extent you are actually proof that they have made the right business decision for what they wanted to accomplish. You have benefited from the artificially low price of their product for so long that you refuse to pay what FFG has determined to be fair market value for their product, a price point that hasn't actually changed since the inception of the product line. I want to stress, I'm not accusing you of wrong doing. All you did was expertly shop for great deals, and good for you, why shouldn't you find the best deals possible. However, by continuing to overpay for services rendered, FFG facilitated the continuation of the artificially low price points for their products to the point that now some of their consumers, like yourself, value their product at these lower prices to the point they refuse to pay the price FFG intended all along. This is bad for their business and had to be corrected once identified. At least this is what I believe they are saying in the article.

I don't the think you should be happy you are going to be paying more in the future as a consumer if you continue your same purchasing routine, but I would expect as a business owner you would be more understanding of why they have taken the actions they did.

 

 

The MSRP of almost all game stores is ARTIFICIALLY HIGH.  This is the actual inefficiency that online sales addresses.  How many gamers sit around wishing prices were higher?  Zero... except for those on this thread advocating on how great Asmodee is.

 

MSRP is not a REAL number.  Its a RECOMENDATION

 

The real number is the price the Company sells the product to distributors for.  After that market demands create a real price point.   Asmodee is attempting to stunt online sales that are more efficient than many brick and mortar stores.  This is direct interference in the market to try to artificially inflate the value of their goods at the retail level.

 

You and anyone thinking that they can try to force MSRP in any industry on people in the internet age are deluding yourselves.

 

I would add that in order for the customer to feel MSRP is not a rip off they need to feel that more is offered than just the physical product.  Excellent service, comfortable environment, etc etc... each person will have a different idea of what these values are.   When these needs are met then and only then can a local store selling at MSRP really offer full value to their customers.  Hence the discussion about this previous in thread.  Again most stores selling games do not fit this description for me and many other gamers. 

 

Asmodee is not addressing local store deficiencies they are simply trying to use economics to force local sales.

Online sellers were getting trade discounts they did not earn for services they did not supply. As a business owner, would you say it is good business to pay online sellers for services they do not provide? As a business owner do you pay for services you don't receive? As a business owner, would you in general consider it to be good business policy to pay for services you don't receive. If you answered no to any of these questions, why do you think ANA should?

Furthermore, online sellers were taking the increased trade discounts they didn't deserve and using them to set artificially low price points because they could still make a satisfactory profit through high volume of sales.

ANA is adjusting their trade discounts to better reflect the services they receive from their various business partners. They have determined that LGS offer more to the gaming industry than online sellers do. Therefore, they think it is in their best interests to offer them more incentives for the increased value of the extra services they provide.

ANA has a business plan that they think will best serve their future interests. It seems you think you know their business better than they do. If you are sure you know what's best for ANA's business interests, you should send your written business plan for them to review, complete with the appropriate data to support the veracity of your plan. If they like your plan and agree, I'm sure they will implement it and things will go back to the way you want it to be.

The bottom line is ANA made a business decision that they think will be best for their future. We the consumers on this forum have an incomplete picture of their business plan. All of us are full of opinions on this topic and it's made for some interesting debate. At this point the deal is done, all we have left is to wait and see if ANA made a good business decision or a bad one. In time we will find out.

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Adapting to changing consumer trends is exactly what ANA is doing. They just aren't doing it in the manner you are expecting them to. They see the increased online sales and the devaluation of their products as a negative trend and I understand why. They are not trying to eliminate online sales or reduce the number of product sold online, although that is a likely short term result (which they recognize). Petersen even says they see them as an important part of their business. ANA is trying to reverse the trend of the artificially low prices of online sellers devaluing their products. They believe this will be good for them, the industry, and ultimately the consumers, although some of us may not believe this part possible at the moment.

 

I think it's important that we're very clear about which price is artificial.

 

And I would suggest that it's not the online price. In fact, I would suggest that this is the real price, and that the MSRP is the artificial one, and that attempting to force customers, who are very in touch with the 'real' price of the product to suddenly start buying at an artificial, higher price, is going to be met with backlash and evaporating good-will from the customers.

 

 

LGSs have been creating demand for these online retailers who don't have to saddle the cost of anything after the sale.  They don't offer a place to play, they don't run events, and they don't help new players in particular get into the hobby.  The truth is somewhere in between most likely.  A LGS which refuses to offer any discount and doesn't even try to compete is doing it wrong.  They also however can't and shouldn't sell everything for 30-40% off, it's simply not feasible or desirable in a product line.

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What ANA is really expecting from retailers is "value added" services. That is, that the retailer add value on top of that which ANA has already assigned a given product by hosting events, marketing, etc...which is all done on the retailers dime, not FFG. So for those consumers who find those services "valueless" (because they would rather play at home, don't need to be told what to buy, etc)' online retailers and the prices they sold products at provided them with a real and meaningful "value" that was not "added to" (so to speak).

 

That is a very good argument from the point of view of many consumers - no question. It's just like I don't value television commercials even of those products that I buy.

 

But maybe if I have a bigger-picture understanding, then I'd realize that if those products that I really like weren't able to appeal to a larger market, I might not have access to those products at all. (Aside from the fact that my television shows might not be produced, and then there's Netflix, and all that... but that belabors the point of the analogy rather than the original point. :) )

 

The 'real price' that people talk about is not just dependent on the cost of production, transaction, and desired return-on-investment. It's also dependent on the scale of the demand. FFG clearly want to make more money, and they figure that either the product is not that price-elastic or that they can grow demand by helping the FLGS (to the degree that this will accomplish that). Maybe both. Maybe they are mistaken - maybe they're not.

 

I guess it all depends on how people find the games we play, and in what networks of fellow gamers they choose to play. I suspect that on this topic most of us are arguing from our particular experience, and we all suspect that most of the community is more like us than like the other side.

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Because that is just one part people in this thread is focused on. There seems to be quite a few moving parts in this new direction. 

 

One benefit that can come out of this is by making it less appealing for stores to by in numbers that they can never hope to sell and just burning off the excess through their ebay/amazon stores. 

 

Nope. Most "local retailers" do not receive the stock order they request from distributors. I have seen this happen at the 5th largest store in the nation; store owner orders 10 copies of widget X from distributor, receives Y (where X>Y) copies. The same thing just happened at my LGS; we had the store order 4 copies of the OP kit, distributor sends 1. It's difficult for most stores to receive the product they request (because the distributor thinks they won't sell as much), let alone receive too much.

 

Sorry, this is just a straight up market manipulation via distribution channel in an attempt to retain value closes to MSRP as possible and bolster revenue. There is nothing else to this. They will be reducing down to just 4 distributors, and telling those distributors (if they choose to carry ANA products) to raise the prices to online retailers.

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@Chuckknuckle and Otakuon.

ANA is paying for services provided to them by their partners. They had a one size fits all policy on their trade discounts to their partners, meaning that no matter how many services you provided that ANA valued, you got the same trade discount as all their other partners. This didn't seem fair to them, nor does it to me, and I would hope it doesn't to you either.

They decided it was better to incentivize their partners based on the services they provide as opposed to a flat rate to all. It reads like the trade discount to LGS stayed the same, while the trade discount to online stores went down because of this change in policy.

The reason the price point was artificially low is because the online sellers were benefiting from trade discounts they hadn't earned and were lowering prices beyond what they should have been able to if they were receiving trade discounts based on the services they were actually providing. This is proven out by the price increase that will happen at the online sellers once they incur the reduction to their trade discount. They aren't eating the price increase, they are passing in on to their customers (as expected) because they had minimized their profit margins to maximize their quantity of sales. Therefore, they had an unfair advantage over the LGS.

At this point the market will start behaving in a more healthy manner. LGS will still sell at MSRP or offer a modest discount while providing the extra services we've been discussing, and online sellers will still be offering a 25% discount (instead of 35%) to their customers in lieu of the services provided by the LGS. To me, this seems like ANA adapting and making a gentle course correction as opposed to the objectionable attempt at price fixing others are calling it.

Edited by Starbane

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Ah - I understand now. You wish to rename a reasonable differentiation of a kind as a logical fallacy without taking the time to understand the point I'm trying to make, because you've decided you disagree with it a priori.

 

Gotcha.

 

Well, at that point there really is no point.

 

Have a nice day.

Not at all, I just fail to see a resonable differentiation. How is a shop that is local to you that carries a resonable range of games not a local gaming store? From what you are saying my read is that you agree that the local gaming store needs to evolve to survive, you just want to keep the nomenclature the same (sans tagging on an F to differentiate it from other non-evolved game stores) rather than recognising that something new and different is emerging.

 

Okay, I'll take your word for it that you're debating in earnest.

 

For me the 'F' has meaning. It is a place that builds community and is an inviting place for people to play. Yes, it is a store, but it frequently has snacks and drinks. Some even have a kitchen, other don't. Some of them sell 'adult beverages', other don't, but all of them are a place people like to go hang out - and they sell games like MtG, board games and the games we like to play. They're a place where strangers can meet and become friends over games they mutually enjoy.

 

Is that something fundamentally new? Not really. In some sense it's as old as the mead hall, except for the interests of the clientele - and the availability of those games as well as the reliance on the sale of those games for a substantial portion of the establishment's revenue.

 

That's substantially different from a store where you can buy the games, but not play them, or meet other people in order to play them except as a chance encounter at the register. Sure, they're both LGSs, but one is a model that is surviving and the other is one that isn't. It seems like FFG is placing its bet that the FLGS is a model that's not dying out, but has a substantial chance of growing and expanding their customer base.

 

I think where your 'no true Scotsman' charge comes in is that there are a lot of establishments that lie in between. However, the 'No True Scotsman' argument is based on an arbitrary measure. But survival or withering away is hardly arbitrary, nor is the degree to which these stores provide added value to FFG's ability to expand their customer base.

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Starbane, on 02 Jan 2016 - 8:56 PM, said:Starbane, on 02 Jan 2016 - 8:56 PM, said:Starbane, on 02 Jan 2016 - 8:56 PM, said:

@tokyogriz

Are you telling me that as a business owner if you identified an area in your sales model where you were overpaying for services rendered and had the ability to fix it, you would choose to continue to overpay for said services?

Furthermore, their former sales model has lead to devaluation of their product. This is actually their own fault for adopting that sales model and they recognize that. By paying online sellers for services they weren't providing they allowed them to slash prices for their product and still make an acceptable profit margin by selling more at an artificially low price point. On the surface this was good for the end consumer (us), but actually bad for their business model by devaluing their products.

To some extent you are actually proof that they have made the right business decision for what they wanted to accomplish. You have benefited from the artificially low price of their product for so long that you refuse to pay what FFG has determined to be fair market value for their product, a price point that hasn't actually changed since the inception of the product line. I want to stress, I'm not accusing you of wrong doing. All you did was expertly shop for great deals, and good for you, why shouldn't you find the best deals possible. However, by continuing to overpay for services rendered, FFG facilitated the continuation of the artificially low price points for their products to the point that now some of their consumers, like yourself, value their product at these lower prices to the point they refuse to pay the price FFG intended all along. This is bad for their business and had to be corrected once identified. At least this is what I believe they are saying in the article.

I don't the think you should be happy you are going to be paying more in the future as a consumer if you continue your same purchasing routine, but I would expect as a business owner you would be more understanding of why they have taken the actions they did.

 

 

MSRP is not a REAL number.  Its a RECOMENDATION

 

 

 

Let us clear something up here. MSRP is a real number, and in fact a vital one. You are seemingly not aware that hobby stores negotiate their discount rates with distributors. That is right, discount rates. You know what they are receiving a discount off of? MRSP. The notion that there is a real price, the one distributor's offer, is based on a misconception of how the whole process works. Different distributors have different pricing/discount structures that hobby stores have to negotiate and some lines are more or less than the general discount.  When a hobby store is looking at if they should bring in a product, they are not looking at the price of the item from the distributer in a vacuum. They are appraising the price versus the MSRP. If they are not obtaining the desired profit margin when sold at MSRP, they will not carry the item or press for better terms. Now if said retailer looks at current online prices and notices that the product is almost always on clearance or steep discount, they will think twice about carrying that item, especially if they are not getting a significant discount off of MSRP. All of this deals with MSRP. Online retailers are able to operate without the overhead of the typical hobby store. As a result, online retailers often have lower prices and slimmer margins. However, they are basing all of their projections and models off of percentages of MSRP as well. MSRP is absolutely vital to the negotiating and setting of prices in the industry.

Edited by Kyln

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Okay, I'll take your word for it that you're debating in earnest.

I think mostly we're in agreement rather than debating. We just have different ways of describing the same things that lead to apparent conflict.

For me the 'F' has meaning. It is a place that builds community and is an inviting place for people to play. Yes, it is a store, but it frequently has snacks and drinks. Some even have a kitchen, other don't. Some of them sell 'adult beverages', other don't, but all of them are a place people like to go hang out - and they sell games like MtG, board games and the games we like to play. They're a place where strangers can meet and become friends over games they mutually enjoy.

What you are describing is, to me, more like a gaming club that also sells games than a traditional retail outlet. It's an interesting hybrid on the way to something new. We're getting way off the original intent of the thread here, but at what point would you say a cafe or club that sells games stops being a LGS? 50/50 revenue split between games and other revenues? 40/60?

That's substantially different from a store where you can buy the games, but not play them, or meet other people in order to play them except as a chance encounter at the register. Sure, they're both LGSs, but one is a model that is surviving and the other is one that isn't. It seems like FFG is placing its bet that the FLGS is a model that's not dying out, but has a substantial chance of growing and expanding their customer base.

Leaving the idea that there is a substantial difference aside as while I don't agree we'll just start going around in circles with the No True Scotsman discussion, is the fact that the 'F' model has the potential to expand not just due to the fact that it's evolution away from the LGS model in progress?

To bring this back(ish) to the thread topic, how does ANA differentiate between F stores that provide added services that ANA say they wish to reward and LGSs that do not? If they truly cannot are they not just subsidising an unviable model in the hope of also encouraging the evolution of gaming retail and public gaming space?

Edited by Major Tom

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@Chuckknuckle and Otakuon.

ANA is paying for services provided to them by their partners. They had a one size fits all policy on their trade discounts to their partners, meaning that no matter how many services you provided that ANA valued, you got the same trade discount as all their other partners. This didn't seem fair to them, nor does it to me, and I would hope it doesn't to you either.

They decided it was better to incentivize their partners based on the services they provide as opposed to a flat rate to all. It reads like the trade discount to LGS stayed the same, while the trade discount to online stores went down because of this change in policy.

The reason the price point was artificially low is because the online sellers were benefiting from trade discounts they hadn't earned and were lowering prices beyond what they should have been able to if they were receiving trade discounts based on the services they were actually providing. This is proven out by the price increase that will happen at the online sellers once they incur the reduction to their trade discount. They aren't eating the price increase, they are passing in on to their customers (as expected) because they had minimized their profit margins to maximize their quantity of sales. Therefore, they had an unfair advantage over the LGS.

At this point the market will start behaving in a more healthy manner. LGS will still sell at MSRP or offer a modest discount while providing the extra services we've been discussing, and online sellers will still be offering a 25% discount (instead of 35%) to their customers in lieu of the services provided by the LGS. To me, this seems like ANA adapting and making a gentle course correction as opposed to the objectionable attempt at price fixing others are calling it.

 

I appreciate the time and effort you're obviously putting into your posts, and the way you manage to argue your point  without being hostile.

 

I think where you lose me is when you start using value based adjectives like 'unfair' 'earn' 'deserve' etc.

 

I return to my initial thoughts on the matter which is two-fold.

 

Games stores need to adapt or die. In the internet age we no longer need someone to order an item for us and have it in a shop for us to be able to buy it. We can buy directly from the manufacturer in many cases, and by cutting out the middle-man we save some money. And despite the protestations of some, the presence of a games store is not necessary for people to enjoy their X Wing goodies. They can play in leagues, tournaments and at home and enjoy a thriving gaming community in the total absence of a gaming store.

 

Despite this, some game stores are thriving. Because they've tapped into something that people want, and monetized it. Some game stores charge for table space, some actively encourage people to come in and play, some are just owned and staffed by genuinely great people and as a result, we want to go in and spend our money and our time there. Some are adopting the gaming cafe approach, some are diversifying their business model in other ways.

 

And that's the crux of the matter for me. Good games stores don't need FFG to hold their hand and encourage sale there. They're doing that on their own. And bad games stores don't deserve to be helped along. The sooner those dingy nerd dungeons close their doors, the better.

 

So all this talk about brick-and-mortar stores 'deserving' a bigger trade discount on FFG products, or having 'earned' that discount leaves me cold. The reward for being a good games store should be that you sell more product, not that the supplier gives you a bigger discount. I mean, the simple fact that this discount is not at all based on merit or performance means all the rhetoric about them 'deserving' a bigger discount than online retailers is hollow. No one comes out and measures just how friendly the friendly local game store is, you get the bigger discount just by having a shopfront, regardless of how  welcoming or off-putting it is.

 

The price of X Wing ships was not artificially low. It was set appropriately. Games stores charged more because they offered more. If people didn't think what they offered was worthwhile, they didn't buy at the games store. Simple. Everyone wins. Crappy game stores go out of business, good game stores thrive, and customer all get value for money.

 

The only person losing out by the current state of affairs was FFG as the wild price fluctuations made it hard to negotiate deals with shops like Target, who offered none of the extra services of the game store, but charged game store prices. And the only person winning under the new state of affairs is FFG, who will get a bigger slice of the online sales pie, and have an easier time negotiating with large chain retailers now that their products have a more stable price.

 

On a final note I'd like to say I don't have any skin in this game. I buy from my local game store because (as mentioned above) I get value for money there despite the higher prices. I don't buy online now, and I will only buy online in the future if my FLGS goes out of business. But despite that, I don't think my FLGS deserves to have a larger discount on FFG goods just because I like shopping there.

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Very good assessment. 

 

Winner = Asmodee/FFG

 

Loser = Customers by the elimination of lower prices is forced to pay higher prices.  This affecting some more than others but still in the loss column for consumers.

 

I would counter that the MSRP is set higher than many in the hobby prefer.  This is creating the massive influx for online purchases as well.  The move by Asmodee to manipulate distribution channels will not temper the desire for customers to get a good deal. 

Edited by Tokyogriz

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Kyln, on 03 Jan 2016 - 01:49 AM, said:

 

Tokyogriz, on 02 Jan 2016 - 11:24 PM, said:

 

Starbane, on 02 Jan 2016 - 8:56 PM, said:Starbane, on 02 Jan 2016 - 8:56 PM, said:Starbane, on 02 Jan 2016 - 8:56 PM, said:Starbane, on 02 Jan 2016 - 8:56 PM, said:

@tokyogriz

Are you telling me that as a business owner if you identified an area in your sales model where you were overpaying for services rendered and had the ability to fix it, you would choose to continue to overpay for said services?

Furthermore, their former sales model has lead to devaluation of their product. This is actually their own fault for adopting that sales model and they recognize that. By paying online sellers for services they weren't providing they allowed them to slash prices for their product and still make an acceptable profit margin by selling more at an artificially low price point. On the surface this was good for the end consumer (us), but actually bad for their business model by devaluing their products.

To some extent you are actually proof that they have made the right business decision for what they wanted to accomplish. You have benefited from the artificially low price of their product for so long that you refuse to pay what FFG has determined to be fair market value for their product, a price point that hasn't actually changed since the inception of the product line. I want to stress, I'm not accusing you of wrong doing. All you did was expertly shop for great deals, and good for you, why shouldn't you find the best deals possible. However, by continuing to overpay for services rendered, FFG facilitated the continuation of the artificially low price points for their products to the point that now some of their consumers, like yourself, value their product at these lower prices to the point they refuse to pay the price FFG intended all along. This is bad for their business and had to be corrected once identified. At least this is what I believe they are saying in the article.

I don't the think you should be happy you are going to be paying more in the future as a consumer if you continue your same purchasing routine, but I would expect as a business owner you would be more understanding of why they have taken the actions they did.

 

 

MSRP is not a REAL number.  Its a RECOMENDATION

 

 

 

Let us clear something up here. MSRP is a real number, and in fact a vital one. You are seemingly not aware that hobby stores negotiate their discount rates with distributors. That is right, discount rates. You know what they are receiving a discount off of? MRSP. The notion that there is a real price, the one distributor's offer, is based on a misconception of how the whole process works. Different distributors have different pricing/discount structures that hobby stores have to negotiate and some lines are more or less than the general discount.  When a hobby store is looking at if they should bring in a product, they are not looking at the price of the item from the distributer in a vacuum. They are appraising the price versus the MSRP. If they are not obtaining the desired profit margin when sold at MSRP, they will not carry the item or press for better terms. Now if said retailer looks at current online prices and notices that the product is almost always on clearance or steep discount, they will think twice about carrying that item, especially if they are not getting a significant discount off of MSRP. All of this deals with MSRP. Online retailers are able to operate without the overhead of the typical hobby store. As a result, online retailers often have lower prices and slimmer margins. However, they are basing all of their projections and models off of percentages of MSRP as well. MSRP is absolutely vital to the negotiating and setting of prices in the industry.

 

 

Nothing your saying is contradicting anything I have said.  MSRP is not a real number in the sense a store MUST charge that price.  Your living in imaginary world if you think customers want to pay full MSRP every time we shop. 

 

Do you go to the store for groceries looking only for full price items?  No, you glance at for sale items to see if there are good deals too of course. 

 

MSRP is a number used for calculating potential profits but its not a HARD and fast number in practice. 

 

How many people on this thread stated their local stores were charging above or below MSRP on x wing ships? Quite a few if you read back.

 

The MSRP for X wing is very high.  That is a big part of what is driving the online sales as well.  In fact board games in general have a very high MSRP and that may be because your average game store is very inefficient in generating sales.  The blame of stores not generating sales does not fall on the consumer, it falls on the business owners to innovate and find what we the consumers want so they could SELL MORE not just rely on artificially high prices on low sales. 

 

I would add that the Asmodee explanation they are "Helping" brick and mortar stores the "earn" their cheaper prices is actually reinforcing poor business practices for many of these stores.  If the majority of locations or stores were we purchased xwing were just super awesome fantastic places for us consumers do you think you would have any were near the amount of complaints from xwing fans on this?  No you would not. 

 

 

Many people would be willing to pay high MSRP like what currently exist in X wing if we felt our needs were met at these stores.  But they are NOT being met for many if not the majority of gamers in the USA for sure.

 

Again this move by Asmodee is not really to help anyone other than themselves.  $$ To believe they are somehow helping you, me and the rest of the board gaming industry is sadly laughable.

Edited by Tokyogriz

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Regardless of what FFG/Asmodee says, the real reason might be very simple: online sales are increasing. Odds are they will increase even after thus price rise. Asmodee simply wants a bigger cut out of online sales.

The fact they can (sell it as) support the FLGS might be just a bonus.

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For me the 'F' has meaning. It is a place that builds community and is an inviting place for people to play. Yes, it is a store, but it frequently has snacks and drinks. Some even have a kitchen, other don't. Some of them sell 'adult beverages', other don't, but all of them are a place people like to go hang out - and they sell games like MtG, board games and the games we like to play. They're a place where strangers can meet and become friends over games they mutually enjoy.

What you are describing is, to me, more like a gaming club that also sells games than a traditional retail outlet. It's an interesting hybrid on the way to something new. We're getting way off the original intent of the thread here, but at what point would you say a cafe or club that sells games stops being a LGS? 50/50 revenue split between games and other revenues? 40/60?
I'm really not sure if that ratio makes much of a difference. The successful places that I see probably make no more than 5% of their revenue from concessions, but that's just casual observation on ny part.

The bigger factor, in my mind (and FFG's, I imagine) is what the establishment's staff do to facilitate the games. Some have event coordinators that host tournaments, leagues, and what-not to keep customers coming in. In addition to the tournament kits, they put up certain expansions (e.g. the CR-90) as a big prize.

That's substantially different from a store where you can buy the games, but not play them, or meet other people in order to play them except as a chance encounter at the register. Sure, they're both LGSs, but one is a model that is surviving and the other is one that isn't. It seems like FFG is placing its bet that the FLGS is a model that's not dying out, but has a substantial chance of growing and expanding their customer base.

Leaving the idea that there is a substantial difference aside as while I don't agree we'll just start going around in circles with the No True Scotsman discussion, is the fact that the 'F' model has the potential to expand not just due to the fact that it's evolution away from the LGS model in progress?
We do have one place in my area that seems to be a significant enough departure from being a retail outlet that I'd say they're different in kind than degree (it's the one with a kitchen and a wider assortment of game types - e.g. video games, a sports TV), which is more like a club. I don't see it successfully competing with the more mainstream FLGSs in my area, but time will tell.

To bring this back(ish) to the thread topic, how does ANA differentiate between F stores that provide added services that ANA say they wish to reward and LGSs that do not? If they truly cannot are they not just subsidising an unviable model in the hope of also encouraging the evolution of gaming retail and public gaming space?

I don't think they will do so, nor do I think they will need to differentiate between the FLGSs and mere LGSs. The market will do that. There's no reason to suspect a market failure in that aspect. FFG seems to view the competition between FLGSs and online retailers as having a market failure, because they see the exchange between customers and FLGSs as having a positive externality that online retailers lack. If they judge that the demand for their products has modest price elasticity, then diminishing the online discount might just give the smaller retailer market just a little positive nudge, which might also help make stores give FFG products a little more support than they currently do (as compared to MtG, for example).

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