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Old 12-02-2015, 07:09 AM   #691
philreed
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Default Re: Report To The Stakeholders

A discussion about GURPS and marketing/product selection has started up. Please take such discussion there so that this thread remains focused on the report.

http://forums.sjgames.com/showthread.php?t=140279
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Old 12-04-2015, 10:01 PM   #692
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I shall make use of the thread's intended purpose and comment on the report:

Right at the start I'd like to say that I'm not talking about the actual business decisions of SJ Games. It can be fun to speculate about the inner workings with fellow fans but it is of limited use to tell people with access to more information and who spend more time thinking about these things how to do their jobs. The correct decision can fail to make sense to fans due to a lack of information or presumptions that turn out to be incorrect. Nor does it need to make sense to outside observers. All it needs to do is be the right choice. However the entire point of explanations is to make sense. Unfortunately the explanations we have been getting recently from SJ Games staff do not make sense.

SJ Games Does Not Have a Time Machine
Unless it has a time machine a business will need to come to terms with the fact that it will lose periodically. There are many things that can be done to reduce loss rates and they are generally worthy things to attempt to do. However it is not an option afforded to businesses without time machines to not have any losses. A business might refuse to acknowledge a loss or it might due to dysfunction try to hide a loss from itself but what it ought to do is accept the current situation and work within that context instead of refusing to deal with reality.

There is Nothing Special About Net Profits
Making more money and losing less money are the same thing. You get nothing special from only finishing projects that give you a net profit. As long as profits per item compare favourably to variable costs a project is worth considering even if that means you are reducing preexisting damage instead of actually getting money.

Lighting is Self Justifying
Its not the job of products to support static costs. It is the job of static costs to support products. People don't pay for lighting because, like charity, they like to throw money at lighting. They pay for lighting because it is an investment that makes more money. If it is a smart investment then a smart company will invest in it naturally. Budgeting a chunk of money so you have money on hand to pay for static costs when the time comes you need to is wise. Attaching a cost to all products to support static costs is not.

Luxuries Are Luxuries
If a product does not give the best return possible given the resources used to create it then you have decided to lose money. Sometimes this can actually be a useful decision. Sometimes it can just be a nice thing to do that the company can afford. If you are doing a line of products such as GURPS as a luxury it is reasonable to ask that it restrain itself to being a non-ideal investment rather than actively losing the company money. However it is simply silly to ask it to subsidize the company as a whole. That is the job of cash cows, not luxuries.

Screw Game Stores
Game stores exist to fulfill needs. If they cannot fulfill SJ Games's needs then unless SJ Games has decided to help them out as a luxury it should focus on methods of distribution that actually work. The passive advertising of GURPS in game stores is minor. It does not command much shelf width and the selection both appears to be fairly eclectic rather than a coherent line and does not contain many of the most important items for new GURPS players (like Dungeon Fantasy). Even if a new player is hooked on what they find there regardless of whether GURPS could theoretically supply more in the way of physical books it does not and so is not a great match for the demographic of players looking for new physical books in a game store.

In closing let me reiterate that I am not saying SJ Games should do this or not do that. What I am saying is that it needs to rethink how it goes about explaining things to its stakeholders. Saying that you are holding off on releasing a product which is complete in terms of content and just awaiting printing (and which possibly has a ticking license clock and definitely has a ticking interest clock) because you can't see it making back its budget especially when you have permission to release it as a PDF does not make sense. I suspect that behind the scenes things do make sense but that does nothing to help the stakeholder report and further comments.

Last edited by Sindri; 12-04-2015 at 10:05 PM.
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Old 12-05-2015, 08:32 AM   #693
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Default Re: Report To The Stakeholders

Quote:
Originally Posted by Sindri View Post
...
There is Nothing Special About Net Profits
...
There is something very special about net profits: Unless a business is a charity or a non-profit organization, "net profits" are the only reason that the business exists. What the business does is just a means to reaching that end. This is as true of SJGames as it is of Ford, Kodak, Microsoft, or the local corner store.


Quote:
Originally Posted by Sindri View Post
...
Lighting is Self Justifying
Its not the job of products to support static costs. ...
Then what does support static costs? They need to be paid somehow, and (AFAIK) products are the only revenue source that SJGames has.


Quote:
Originally Posted by Sindri View Post
...
Screw Game Stores
Game stores exist to fulfill needs. If they cannot fulfill SJ Games's needs then unless SJ Games has decided to help them out as a luxury it should focus on methods of distribution that actually work. ...
Exactly what are SJGames' needs?

"Selling product today" is an important need, but it is only one of a for-profit company's needs. Another important need is "maintaining and expanding the customer base", which leads to "selling product tomorrow" (arguably a more important need than "selling product today" is). This need is difficult if not impossible to do without points of presence in the target markets. For the game industry, game stores are those points of presence.

Cutting off the game stores is like killing the goose that lays the golden eggs - you get all the gold that's available now, but you get no gold later.
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Last edited by robkelk; 12-05-2015 at 08:35 AM.
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Old 12-05-2015, 08:52 AM   #694
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Default Re: Report To The Stakeholders

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Originally Posted by robkelk View Post
Cutting off the game stores is like killing the goose that lays the golden eggs - you get all the gold that's available now, but you get no gold later.
Agreed. It would be a bad move to eliminate local game stores from the process. The independent hobby game shops are where new games are discovered and enjoyed, and many of the stores offer space to play.
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Old 12-05-2015, 09:04 AM   #695
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...
As for selling GURPS stuff, SJ Games has licences for Discworld and Mars Attacks, licences other companies would metaphorically cut their right arm off for. And at least one of them is ready to print, all costs have been paid. ...
Not all costs - printing is expensive, and from what's been said here has not yet been contracted and paid.
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Old 12-05-2015, 09:12 AM   #696
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From the annual report, it's not clear SJ Games do.
You're referring to cash flow, which we absolutely understand. We review cash flow reports regularly and use those reports to adapt, plan projects, and move the business forward. Steve has mentioned our cash flow reporting in a previous report.
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Old 12-05-2015, 09:14 AM   #697
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You keep saying that, but it seems to be only true for non RPG products. All the evidence given by gamers on these threads is that for GURPS the stores barely help at all. I have seen no contrary evidence, even the store owner who posts here and offers a big discount on the Basic Set admits that despite his best efforts he really struggles to sell GURPS.
We, Steve Jackson Games, stand behind our hobby game retailers and will continue to do what we can to support their efforts. The hobby game stores are important and we chat with retailers constantly; hobby stores are the leading edge of the industry and where games are discovered, taught, and enjoyed.
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Old 12-05-2015, 09:16 AM   #698
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Default Re: Report To The Stakeholders

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Not all costs - printing is expensive, and from what's been said here has not yet been contracted and paid.
There's also the carrying cost for holding inventory in a warehouse. Once the print run is completed, I believe that there is a bookkeeping, is not literal, cash flow that is charged every time. To simply hold inventory. Back when I was doing consulting, I seem to recall something like a 10% carrying cost charge for holding spares and future products in warehouse.

One of the reasons a print run may be unaffordable is that the net present value of the costs incurred by holding the product / it's expected time to run through the print run plus the cost that is immediately up front of actually printing do not offset the expected revenue do to sales. Again, all of that on a net present value basis.
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Old 12-05-2015, 11:04 AM   #699
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You keep talking about the situation as it used to be in the US, as if that is the current situation across the world.
The best hobby game stores in the US regularly provide play space and a willingness to demonstrate games. We are a US company with a healthy percentage of sales inside the US; the majority of our reach outside of the US is through partnerships with publishers who translate our games and distributors who import our games.
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Old 12-05-2015, 11:21 AM   #700
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Most game shops aren't ideal for demonstrating rpgs. They're too noisy and boisterous and frequently politically incorrect. I'm always having to remind my players that "it's not that kind of store."

I was in the mall today and wandered through a billiards and games store. They had an entire rack of Munchkin products and not a single rpg. I'm firmly convinced that rpgs need to find a model that will allow them to sit on the shelf next to Monopoly and Settlers of Catan if they want shelf space.
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