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Alright, let's have some controversy.>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
FANTASY FLIGHT GAMES TO INCREASE PRICES ON GAME
PRODUCTS, ELIMINATE NET PRICING STRUCTURE
FOR IMMEDIATE RELEASE
Roseville, MN, USA (September 5, 2008) Fantasy Flight Games (“FFG”) announced today that it will increase its suggested retail prices on a wide range of its products, while simultaneously eliminating the Net Pricing wholesale structure it has carried on select product lines. e price increases are broad reaching, affecting most board game and card game SKUs with increases in the 10%-25% range.
“There has been tremendous upward pressure on manufacturing pricing during the last three years,” said FFG founder and CEO Christian T. Petersen. “FFG has for long fought extremely hard to create and retain maximum value in its products for the gaming audience. this is something that we’ll continue to do. However, with energy, commodity, and labor prices affecting every stage of our our business, we now find it necessary to make a rare correction,” he continued. “Even with the price increases that we announce here today, I still think that our customers will find FFG products among the best values in the industry.”
Price changes on existing inventory items will take place on November 1st, 2008, while prices increases on upcoming new releases will take place with immediate effect. A detailed list of new prices and their effective date, has been made available on FFG’s website: www.fantasyflightgames.com and will be sent today to FFG’s retail and distributor customers.
Battlestar Galactica®:The Board Game, FFG’s most anticipated fourth quarter release, will retain its SRP of $39.95 for the first wave of product (which is currently sold out on pre-orders, and scheduled to arrive in October), increasing to $49.95 for the second wave (scheduled for late November).
Simultaneous with the November 1st pricing increase, FFG will eliminate the net pricing structure it has maintained on select products such as War of e Ring® and StarCraft®: e Board Game, among others.
As a result of this, FFG will then exclusively sell wholesale items to retailers and distributors on its standard discount-based structure. John Grams, FFG’s Business Development Manager, noted “In conjunction with this necessary price correction, we have decided to simplify our pricing structure to the advantage of our retail customers. Just a short while ago, we eliminated Net Pricing on the Rackham product line, and today we’re pleased to eliminate Net Pricing at FFG entirely. With a single discount structure, our wholesale customers will now be able to look at any FFG product and know with confidence what their price will be.”
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This is good and bad news, obviously. The good news is mostly for retailers- net pricing sucks. Net pricing reduces margin (particularly if you're trying to go below MSRP) by effectively raising wholesale costs outside of standard terms. It's not good for retailers, and I think this is definitely an announcement geared at supporting the retail end of the industry more than anything else.
At first, of course I thought "Damn." Nobody wants to spend more money, of course, and I think it sucks overall- a 10-25% increase is pretty serious (that's $5-10 on most titles), and I'm sure that it's something their business management has stringently analyzed.
But thinking about it, I think the key line in here, from Mr. Petersen himself is this:
I still think that our customers will find FFG products among the best values in the industry
I would have paid $100 for STARCRAFT, TI3, DESCENT, and TIDE OF IRON. I've already gotten much more than $100 worth of enjoyment out of them and will continue to enjoy them for years to come. It sounds like a Pollyanna stance, but for most of FFG's better products the price hike isn't that big of a deal. True, I may not have paid $100 for those games without having played them first, but I'd buy any of their Epic-sized games at $100 with the exception of WORLD OF WARCRAFT 2. But now, I know what I'm getting because FFG is an effective brand. I know when I buy a FFG game, particularly the Epic titles, that I'm investing in _years_ of fun.
I guess the big losers are going to be the people who buy a game and play it once or twice before moving on to what's "hot" next on the popular boardgaming sites and those guys that put in $300 orders to Boulder Games under their wives' radar every two weeks.
Back on the other hand though, raising prices (which is unfortunately occuring in every industry right now and this is just a tiny, tiny symptom of overall inflation) means the monetary barrier for entry for curious onlookers and casual gamers is higher. For a some people, a $10 price increase means no deal. Saying a game is $80 instead of $90 is a big jump. Of course, if you never knew that STARCRAFT is $90 and it used to be $80, then I guess that makes it irrelevant.
I think the real tragedy in this is the price increase on the BSG game- it's a shame that it'll be going up, $39.95 is just right for the mainstream, which is where that product could (and should) find a lot of market traction. I almost think FFG ought to have a couple of "loss leader" titles like BSG, WOW:AG, and stuff like the upcoming GEARS OF WAR that are primarily targeted at the mainstream market. Smaller margins, but with the goal of selling higher volume and building brand identity/loyalty.
Price increases are inevitable, and I think over the next 3-5 years we're going to be seeing more and more in the industry. So get used to it. It's going to be interesting to see the reaction to this announcement along with any further industry movement in the next few months- if I could put money in the board game publishing industry on the stock market- I wouldn't.
