Wednesday, December 19, 2007

Game Design and Economics

I begin this article with an experience I had with one particular product I had to sell as part of a previous job. (The product I'm referring to and my previous job are in no way associated with the realm of board games but I choose to start with them because the principles I learned there apply to the subject at hand.) The decision to buy the product in question was made by other people higher up in the company after being given some sales pitches by the manufacturer. However, the eventual task of selling this product was handed to me.

Now, usually in retail of any kind, the MSRP (manufacturer suggested retail price) is around double what a retailer pays for the product from either a wholesaler or directly from the manufacturer. In this case, we were purchasing the product directly from the manufacturer and, because of the cost involved for the manufacturer to produce the product, their eventual asking price from us as a retailer was around $500 per product. This cascaded into a retail price of around $800 to $1000. The product was put on display at our retail location and I was given the assignment to sell it.

For the most part, the product was proclaimed a very good idea by every customer that I introduced to it and it might have actually sold well if our asking price was around $300. However, because there was a strong mismatch between our asking price and what most consumers would reasonably pay for a product of that type, it simply didn't sell.

Game Design and Economics

What does that have to do with game design? Well, I submitted a game design this past year to a respected publisher who was willing to take a look at it and see if there was something there. They ultimately decided not to publish the game and one of the points made to me as part of their feedback was that the publisher saw my game as being a game that would be suited for a particular price point but that the number and type of components in my game made the publication of the game cost prohibitive for the level of play that it offered. Thus, publishing the game would be an unwise idea. Now, I was aware before I submitted the game of how it's important in general to keep the total number of components down in any game design - thus making the game a more likely candidate for publication. However, I had not actually asked myself "What is the specific price that this game would/should command in the marketplace?"

The Price of Games

Right now, a game like, say, "Caylus" sells for about $50.00 while a light card game such as "No Thanks" sells for about $10.00. This makes sense because Caylus is a very component heavy game while "No Thanks" is not. However, the level of play offered by a game like Caylus allows a manufacturer and a retailer to have an asking price that allows them to make profit off of selling the game (many people are willing to pay a larger price for a game that offers the type and amount of decisions that Caylus offers). If someone has designed a game that plays with about the same amount of weight as "No Thanks" but the component structure is on the same level as "Caylus", then the game is probably dead in the water up front - regardless of whether or not the game is fun. People will look at the game, perhaps play it, maybe even say it was fun, but there's no realistic economic viability in producing it because people simply won't pay that high of a price for it.

Thus, in general, how heavy a game is with respect to weight of decisions and how component intensive a game is are two aspects of design that need to line up for the publication of a game to be a reasonble business decision. There are obvious exceptions (Crokinole, for example, is a very simple game that requires lots of work to produce a board and pieces). Nevertheless, in general, if the game is going to be expensive, it needs to offer a level of play that will allow a consumer to justify the expense.

All of this brings me to my main point: judging one's own game design purely on the basis of whether or not it is fun to play is simply not a complete evaluation. It's easy to let one's self indulge in partial evaluation (after all, it's the publisher that will be dealing with the dollars and cents...right?....). As a game designer, one has to look at one's game as a "product" and take into account the economic viability of the game as a "product". The product I was assigned to sell at my previous job was a good idea in terms of what it offered but a terrible idea in terms of the economics involved. Games are the same way.

With this perspective now in place of "designing a game" = "designing a product", what are some things a designer can do to keep a game's component structure appropriate for the level of play offered by the game?

Simplification and Consolidation

I've found that, usually, simplification of processes within a game tends to equal consolidation of components as well. This is because most components are simply physical objects used to keep track of something going on in a game. Again, using "Caylus" as an example, there are lots of wooden pieces and components in the game. However, there are also a lot of things to keep track of (who built which building, how many sections of the castle were built by any one player, where the Provost is, whose workers have been placed and whose have not, turn order, etc.). A game with that many things to keep track of results in lots of components while a game with fewer things to keep track of results in fewer components. Thus, to make a game an economically viable product, simplification of rules and processes within the game is usually a very good idea as that simplification will tend to equal a consolidation of the components required to play the game. It's important to ask one's self with each and every component in the game "Is this absolutely necessary to have?" If the answer is "Yes because of rule X", then the next question should be "Is rule X really necessary?"

Most of these points deal with games that are being designed with a Eurogame audience in mind as gaming publishers that take the opposite approach (i.e. Fantasy Flight with their $80, bit/component intensive games) don't accept outside game submissions. Their designs come from in-house designers and their audience is looking for a component-rich gaming experience with "epic" game design (i.e. lots of rules to facilitate a very highly thematic game), not a simplified, Eurogame design.

Some Math

So, how much is your game worth? What would be a price that others would be willing to pay to have a copy of your game? Doing some mathmatical generalization, whatever that price is, divide it in half because that's most likely what a retailer will be paying for it from their wholesaler. Then, divide that number in half again because that's probably what the wholesaler will be paying for it from the manufacturer. Now consider that that's where the publisher's cost needs to be per unit to make a profit off selling it to a wholesaler. Let's spell this out using a game like "Carcassonne":

-Carcassonne sells for about $25.00 retail.

-Dividing that in half for the price from the wholesaler to the retailer can be estimated as being around $12.50

-Dividing that in half again for the price from the manufacturer to the wholesaler can be estimated at around $6.25

Now consider that a publisher like Rio Grande will have to produce copies of Carcassonne for less than $6.25 per copy to make money off of it.

Print Runs

The next issue one encounters in this process is the issue of print runs. Printing companies will charge less per unit if there are more total units in the print run. Printing enough copies to make the cost of the game worth it leads to the issue of now having to sell that many more copies of the game to make a profit. So, if you play it safe and do a small print run of 500 copies of a game (assuming a printing company will do a print run that small) then your per unit costs will be prohibitive. If you make your per unit costs more acceptable by doing a 2000 copy print run, now you are under pressure to sell a lot more games to turn a profit. Now consider just for a moment that making a game at even $4.00 per copy and printing 500 copies of that game equals a $2000 investment. It's no wonder that game publishers have to take into account the components involved in a prototype they are looking at. Every piece of the game is going to cost money to make.

The Focus of Design

Many of us who try our hand at designing games can get caught up in the smaller particulars of design and, in the process, lose sight of whether or not our game is an economically viable idea. I've presented a few thoughts on the matter here simply to help remind all of us, myself included, that we can't ignore the economics involved when we are creating a game. We owe it to the publishers to give them as slick of a prototype as we can so that they have all the more reason to say to themselves "Alright, let's invest our hard earned money in this guy's game because we believe we can make money off of it."

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