Black Diamond Games

Gary Ray is a fantastic guy to know about. Not only does he run one of the finest game stores I’ve had the pleasure to shop and game within, but he also keeps up a blog about the nuts and bolts of running a game store. The blog has lead to the definitive book on the subject, Friendly Local Game Store: A 5 Year Path To A Middle Class Income. Now one of this country’s leading experts on the correct and incorrect ways to sell games, has announced a card game based on the crazy customers found in the hobby. FLGS: The Card Game will be “basically a Guillotine knock off”, in which players collect customers, including the highly sought after alphas and angels, and the less than desirable vultures and parasites, and everything in between. The purpose of the game is to show the amusing spectrum of insanity that are board gamers, with the players taking on the roles of store owners, and the cards representing customers. For more details on the game, you can read the description in Gary’s own words here. FLGS: The Card Game is in the early planning stages, and no release date is imminent.

As the board game market has boomed this has become more and more a common question for game stores as they try to carry all the new games being released.  And the short answer is that they can’t carry everything, so they have to pick and choose.  Like a gamer whose collection has reached maximum physical size, it now becomes a matter of if the next new game is better than what you have already.  Tom Vasel uses this philosophy on his game collection, and game stores now have to do the same with their finite amount of retail space.  But what does this kind of thinking do to the market?  Unfortunately this may make it harder for the little guy to break into the brick and mortar stores because they have to prove their game is worth taking up that valuable real estate.  What used to be carried because it was good now can’t because they have to make room for things that are great.

Gary over at Black Diamond Games ponders this question as well, giving an insider’s perspective, so give his article a read.

Five years is a good stretch of time, and if you look at the board game industry, it’s definitely not the same as it was five years ago.  With companies like Asmodee grabbing up other companies left and right, and deals being made by companies like Ultra Pro, the landscape is changing quickly.  Now enter Gary from Black Diamond Games, he shared on one of his latest blog posts two charts showing the market share of each board game company in 2011 and 2016.  Effectively showing you what percentage of sales each company was responsible for in board games for those two years.  One thing that is not surprising is that Wizards of the Coast tops both charts, more so in 2016 than 2011, and this is because of the constant presence of Magic, the release of DnD 5th Edition, and the new Magic the Gathering board game line.  Asmodee jumps from 19th on the list in 2011 to 2nd on the list in 2016, mainly because they acquired many of their competitors in front of them like Z-Man and FFG.  Needless to say it’s interesting to see how things have changed over the years, so head on over to the blog post to check out more.

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Gary Ray, over at Black Diamond Games, continues to pull back the curtain on the business of running a game store and shows us where all the money goes when you buy that $100 game.  The breakdown he gives is very extensive and covers the portions of the sale that goes to things like rent, payroll, new inventory (which is the biggest expense at $55.02), bank fees, and more.  What is surprising though is that what is left as profit on such a big ticket item is only $7.77, much smaller than you would expect.  Head on over to the Black Diamond Games blog to check it out and see the full breakdown.

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The folks over at Black Diamond Games have put up another blog post, this time dealing with the question of “What relationship does a game store have with their customers”.

Their long answer goes into the difficulties of having both a regular customer base and an open door for the more casual player, while also managing the idea of providing services to the community outside of simply selling product at a price greater than online retailers.

The short answer can be summed up in the always vague Facebook status of “it’s complicated”

“We’re not really sure how many customers are rational actors and how many are acting charitably, possibly against their own interests.  Price is obviously what we’re talking about, since our three legged stool of price, service and convenience is a bit wobbly on that first leg. We don’t compete there because we can’t, yet we fail to properly monetize the services that make us special, because we believe game store customers won’t pay for that value.”

An interesting read into the minds of a store owner. Check out the full blog post here.

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Many of us have a specific local game store that we frequent. Maybe it’s our favorite one, so we only visit that one. Or maybe there aren’t any other options in our areas. But it’s rare to visit many different game stores, so it’s exciting to hear about the variety of options out there.

Gary Ray from Black Diamond Games, a game store in the Bay Area in California, is currently on vacation, going on a West Coast Game Store Tour! So far, he’s gone to stores in Washington and Canada, but he also plans to go through Montana, Idaho, Utah, Nevada, and Central California. As he visits the stores, he’s updating us on what each store has that is unique. Since Gary has his own game store, he notices things that the average consumer may not:

The Tension in all of these stores is making money versus customer satisfaction. It’s clear as a store owner, that there are a lot of things that look great to customers that are retail illusions. Nobody is making money selling these things or doing these things, but they exist to draw you in, attract your attention, create a vibe so that you’ll spend money on the 20% of stuff that you spend money on. That’s pretty much how the game trade works, 80% useless crap or services you think are important and the 20% of stuff you actually buy and use. Which are the 80% and which are the 20%? That’s the stuff retailers discuss privately.

Another interesting thing is how game stores could differ across geography. For instance, in Washington state, it is simple for a game store to get a liquor license, so many of the game stores there serve beer along with coffee. In Canada, shipping prices make it so that people don’t buy from online game stores, and the local game stores have far more games in stock and fewer tables for tournaments.

To see the places that Gary has visited so far, check out the blog: Part 1 and Part 2 are up. He also has a lot of pictures on his Facebook page!

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Black Diamond Games, a hobby gaming store in Concord, California, mainly sells games in four categories: CCGs, RPGs, Tactical Miniatures, and Board and Card Games. The first three categories are all mature markets – they each have a market leader with well over 50% of the sales (Magic: The Gathering, Dungeons & Dragons, Warhammer 40K). Board games, on the other hand, has lacked a market leader. Gary Ray from Black Diamond Games thinks that Asmodee is close to bringing the board game market to maturation.

After Asmodee acquired Fantasy Flight Games, they’ve become the clear board game market leader. Their market share at Black Diamond Games is 36%, with the next closest company at 7.5%. This is similar to a mature market, where the market shares drop off significantly after the leader.

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According to Gary, this is significant for a few reasons. Firstly, the company that owns Asmodee also invests in other things like parking lots, and the fact that it has backed the board gaming industry with millions of dollars is an indication that the board game industry is not a bubble – other people see that the games are a means to make money. Secondly, it shows the maturation of the market, and will probably mean a change in the distribution model – Asmodee will be able to distribute themselves instead of relying on distributors.

With the maturation of the board game market, we may see a lot of changes in the coming years. For more detail and thoughts on board game market maturation, check out the blog post here.

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Just how much profit do Friendly Local Game Stores (FLGS) make? According to a recent report most US citizens believe retailers make a 36% profit. Gary Ray, the owner of Black Diamond Games, runs a blog that gives readers a behind the scene look at running a FLGS and sets the record strait. You can check out the full article here but even if you don’t you should know that it’s not close to what many people may think it is.

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The net profit margin for retailers in the game trade is in the 5-8% range. Retail in general is in the 1-9% range, with gas stations at the bottom and jewelry stores at the top.

To read the entire article, you can visit their web site here.

While you’re at it you should check out some of his older posts for great insight into what it’s like to run a game store.

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December is typically the busiest (and most profitable) month in any game store’s calendar. Now that the wave has broken and January is here, Gary Ray of Black Diamond Games has some welcome advice on how to make the best use of all that cash. Gary’s biggest take-away: DON’T spend all the money on backfilling your inventory.

He writes

The game trade is “front list” driven, meaning most sales come from new items. New items for 2015 don’t exist yet. Why spend your money on slow things? If you want to expand an area, it would be better to expand with new product rather than back fill.

Other areas Gary notes many inexperienced store owners neglect: marketing, education, fixtures and especially TAXES.

Have you been profitable before? If you’re new at this, you might get sticker shock at your tax bill. The most dangerous expense in my business right now is my income tax bill. Wait and see what you owe before you spend all your money.

Take a look at Gary’s full list here.

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Gary Ray of Black Diamond Games in Concord, CA is convinced that shopping early is the key to success when it comes to buying board games during the holiday season. He makes the case for his strategy, providing a rare glimpse into the retail and distribution side of the gaming industry.

“If you’re a consumer, or a store owner for that matter, you should shop early too, and I’ll tell you why.”

So why the rush? Gary points out a myriad of variables and complications that impacted 2014 season specifically, but are likely to be just as relevant for years to come.

Port Delays – While there’s always variability in the long ship ride from China, delays at West Coast ports had a big impact on product availability.

Poor Forecasting – Figuring out how much a game might sell is a guessing game at all levels of the supply chain, but is particularly difficult for publishers.

“Game publishers have been just, absolutely, terrible this year in forecasting demand. I don’t know what black magic they use for forecasting, but their mojo has eluded them in 2014.”

Increased Demand – The board game hobby is growing, but it may be outpacing the production and delivery infrastructures, making it harder to weather delays and accurately forecast.

Online Won’t Help – Although consumers count on online retailers to have stock when they need it, they’re subject to the same availability issues as traditional retailers.

“Our brick and mortar store has been the ‘last man standing’ on many products this year, according to people who only buy online who don’t mind mentioning we were their last resort.”

Gary suggests being proactive and pre-ordering through your friendly local game store (FLGS) whenever possible. Check out the rest of Gary’s blog post for more information, and make sure to read the comments section for some additional interesting tidbits.