Tuesday, January 23, 2007

WizKids vs. Distribution

I'm sure many of you have seen this news.

I'm not sure if you realize how much this will directly impact you.

See, it's all about the supply chain. Your local game store gets its games from a distributor. In some cases, that distributor gets the games from another distributor. In some cases, that distributor is direct with the manufacturer.

The closer your store is to manufacturer direct, the lower the prices they can charge and still turn a profit. Since your local game store is a business, profit is important.

If your game store is like most, they probably give you a discount if you're a regular. A higher profit margin means they can give you a better discount without cutting into their bottom line.

Exclusive distribution contracts are bad for small game stores, as it costs them some flexibility and can cost them more money, as well.

I'll use my local game store, Phoenix Games as an example.

There are several distributors that Phoenix can go through for any given item. They each have their own pricing scales, and (in general) it's better for Phoenix to go through a smaller local distributor, because they can get better prices and there's no shipping time involved.

Diamond/Alliance Distributors are a tiered distributor. The more you buy, the greater your discount. They also have a sizeable minimum order size – one that smaller game stores may not be able to afford.

With the exclusive license, Phoenix can no longer go to a smaller distributor for WizKids products. Not unless they want to pay more for the same products (this is without accounting for WizKids' continual alienation of its own fanbase – another story for another time). Phoenix also can't just run to a local distributor to pick up a box of Pirates of the Spanish Main when he runs low. He has to order it (hoping he has enough to meet his minimum order size) and wait for the shipment to arrive. He also has to order enough in advance to cover (theoretical) demand while hoping that WizKids hasn't released yet another space-eating dud that doesn't sell.

Or that they haven't alienated their fan base with dramatic rules changes yet again.

In short, exclusive distributors reduce a game store's ability to react to a changing marketplace, and make it more expensive for them to get the games that you are asking for.

I've got a rant from Brian – the proprietor of Phoenix Games – that I'll post sometime, but he sums this whole situation up nicely:
So now I am forced to choose – pay more for WizKids products or snub my local distributors who have championed my success, and buy all my products from Alliance so that I qualify for the price I already get. I don't believe I'll give my local guys the finger, just so I can continue to carry (at my existing price) the products of a company that has, over the last couple of years, done everything they could to make selling their products as difficult as possible.
WizKids, it's been great dealing with your products. I even enjoyed a few of your games. But when you hurt local game stores, you hurt the industry as a whole. I can't – and won't – support that. I love my hobby too much.


  1. Well then. I will certainly be boycotting their products until this changes.

    Revised boycott list:
    Wal-Mart (going on 6 years)
    WizKids (going on 6 minutes)

    Keep me posted.

  2. I'm not sure a boycott will help, actually. It's not just WizKids signing the exclusive distribution deals - they're just the latest to have done so. It's an industry-wide problem without an easy solution.

    That, and a boycott means missing out on such great games as Tsuro and Oshii ...