My First FLGS and Stretch Rewards

I just got off the phone with Patrick Nickell of Crash Games. We talked about the vagaries of stretch reward planning, setting prices for board games, and lots of other topics. I remember watching Patrick and Michael Coe hustle their butts off promoting their Rise! Kickstarter campaign at my first BoardGameGeek Convention back in 2011. At the time, I was testing the waters to see if the board game industry and convention life would be a good fit for me.

When I got back home, I noticed tweets from Patrick and Michael about hanging out at the Game Depot, a game store in Tempe, AZ that is near and dear to my heart. At the end of my first year of college at Arizona State University, I sold my textbooks back to the bookstore and walked directly over to the original tiny Game Depot location to spend that textbook money on my very first Magic: The Gathering cards from proprietor Dave Pettit. That moment changed my life. And of course it was only the first of many, many visits to Dave’s store to buy Magic cards. When I go back to Arizona for the holidays, I try to visit the very large current Game Depot store to say hi and buy a game.

Because we share a connection to my old FLGS, I was delighted to meet Patrick and Michael at GenCon this past summer. Then at BGG.CON this past fall, Patrick answered a lot of my questions over breakfast about publishing and offered future help should I need it. Today I was grateful to accept that help. We discussed more of the lessons he has learned as a publisher, which he is eager to help me benefit from. Patrick is incredibly passionate about games, and one of the highlights of my BGG.CON was watching an animated Patrick attract a sizable crowd clogging all the aisles around the Crash Games booth on the last night of the con for a raffle he’d been promoting the whole con.

Returning to the business of Lagoon, I spoke with my rep at Panda for an hour and a half yesterday, going over every detail of the revised Lagoon manufacturing quotes I received last week. We made a few tweaks to the specs for the base version of Lagoon, but mostly we talked about possible stretch rewards and their cost. As I explained in my last post, a lot of possible stretch reward enhancements to my game were lumped together into a “maximum” version of Lagoon for which Panda also delivered a quote.

This is a good start, but it still doesn’t tell me what the cost of each individual enhancement is. That’s critical information I need in order to sequence my stretch goals at funding intervals that will pay for each stretch reward. In a lot of cases the costs can be inter-related, so it isn’t necessarily easy for Panda to break out each component’s cost separately in a quote. So I had a lot of questions for my rep about the relative costs of different enhancements, and fortunately he was able to give me a reasonable ballpark estimate on the costs of many things. When he didn’t have an answer, he promised to get one for me.

Even after I get all these numbers though, it’s still not as straightforward as it seems. The cost of almost every component shrinks gradually as the number of units you produce goes up. Suppose the minimum print run for your game is 1500 copies, and a given enhancement adds 40 cents to the unit cost for the game in a minimum print run. That same enhancement might cost just 38 cents in a 2500 copy print run and maybe only 32 cents for 5000 copies. Unfortunately though, that kind of precise cost information simply isn’t available to me. Comparing the minimum and maximum quotes for Lagoon, I can make a rough estimate of how the costs scale for individual enhancements. But it’s guesswork, especially if you’re looking at a lot of possible stretch rewards lumped together in a single maximum quote. And I don’t think Panda would be amused if I submitted a couple dozen different manufacturing quote requests to cover all the possible configurations.

A few cents here and there may not seem like much, but it adds up because the manufacturing cost is multiplied about 5-6 times to get the game’s MSRP. If you underestimate the cost of all your stretch rewards by a total of just 20 cents, that could amount to $1 or more in lost revenue when your game is later sold in retail stores. Hobby games are expected to have nice round prices like $19.95, $24.95, $34.95, etc. It would be awkward to change the MSRP of your game from say $19.95 to $20.95 in order to cover the 20 cents in stretch reward costs you weren’t able to accurately predict from the information your manufacturer provides. Such errors eat into profits, which are razor thin in this industry to begin with.

This is why I was up until 3am last night building out more details and funding scenarios in the financial model I’m building for Lagoon’s Kickstarter. I already have a pretty good idea what possible stretch rewards I’d like to offer for Lagoon if it’s economically feasible, but I need to do more brainstorming, focus grouping, and then more calculating, calculating, calculating. And as if on cue, Jamey Stegmaier today posted a new Kickstarter Lesson about the value of including a must-have component in your board game. More food for thought!

 

 

 

3 thoughts on “My First FLGS and Stretch Rewards

  1. I think everyone has a different formula for MSRP. I see what you’re saying about it changing over time, but I think at some point you should figure out exactly what the retail version of the game will look like, and to get the MSRP, simply find a few other similar games on the market (in terms of components) and use their MSRP. I prefer that method, and distributors seem to respond well to it.

    • This echoes what Aldo Ghiozzi at Impressions told me. So I’ve been trying to determine my MSRP and plan my Kickstarter funding goal and stretch rewards around it. A predetermined MSRP seems to mandate that all stretch rewards conform to a formula. That formula should result in a final cost per unit that is sufficiently profitable in retail at the chosen MSRP, when produced at the print run size that is covered by the KS funds. This approach seems safe, which is reassuring.

      I think that’s what you’re advocating in Kickstarter Lesson 59: The Myth of MSRP (http://www.stonemaiergames.com/kickstarter-lesson-59-the-myth-of-msrp/). But when I review the Euphoria stretch goals, the massive amount of enhancements and bonus components that were added by the end of the campaign make the final game a ridiculously better value than the unstretched version. If you determine your MSRP as you describe above, by benchmarking the game against comparable games, you’d get two different MSRPs for the Euphoria that would have existed if no stretch goals were reached and the Euphoria that emerged at the end of its wildly successful Kickstarter. Which makes me feel like I’m missing something.

      Another tricky thing is I have the impression your game’s MSRP should be a round price like $25. Most games are priced that way, so it follows that games comparable to yours will be too. Since those round prices tend to jump in $5 increments, what do you do if your game’s cost per unit is not sufficiently profitable at say $25 but the game is perceived as overpriced compared to $30 games? An MSRP of $27 seems a bit awkward.

      At the same time, I’m trying to determine what I should consider sufficiently profitable. I’ve frequently heard as a rule of thumb that you want your total cost per unit to be 1/5th of your MSRP. When talking to Aldo, he suggested that I should actually shoot to have a unit cost of 1/6th my MSRP.

      Trying to square all of the above and not lose money is what makes me spend hours and hours playing with the numbers in my financial model for Lagoon’s Kickstarter campaign. :-)

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