W. Eric Martin: The Long Tail of Gaming

The Long Tail, written by Chris Anderson, editor of Wired magazine, was born out of a conversation he had with the CEO of Ecast, a digital jukebox company. Unlike ye olde jukeboxes of my parent’s time – or, to be fair, my time – an Ecast machine has a broadband connection that enables users to choose from thousands of digital musical tracks. Asked by the Ecast CEO what percentage of the 10,000 available albums had sold at least one track per quarter, Anderson (sensing a trick) guessed 50%, a high number given business’ standard 80/20 rule, that is, 80% of sales coming from 20% of the products.

The real answer? 98%

Even more surprising, as Ecast added more titles to the jukeboxes, the percentage remained the same. While the more obscure albums (i.e. everything that wasn’t a hit) didn’t sell that much individually, collectively the sales added up nicely – and since the music was delivered digitally, the cost to Ecast was roughly the same whether it supplied the jukeboxes with 10,000 or 100,000 albums.

As Anderson did more research into new markets, he kept discovering this 98% rule: Every one of the million tracks on iTunes had sold at least once; Netflix rented 95% of its 25,000 titles at least once every three months; research suggested that Amazon sold at least one copy of 98% of its 100,000 titles per quarter.

While hits dominate the charts in the music, movie and book industries and suck up the attention of mainstream media, sales come from throughout the spectrum of available items. After all, many people have specialized interests and want nothing more than to dig deeper in the offerings that cater to their desires.

If you graph the sales within any industry, the hits form a narrow, enormously tall peak while the midrange successes create a modest downward slope and the mass of everything else (the non-hits that comprise most of what’s released) creates a skinny tail that goes on forever.

The game industry is no different than those of books, music and movies. A handful of games are runaway hits – more than 200 million Monopoly games sold, 100 million copies of Trivial Pursuit titles in print – second-tier titles sell in the tens of thousands, and the majority of game releases are ignored by the press and the general public, selling only thousands, hundreds or even tens of copies annually.

As a reader of BGN, you’re probably familiar with all those titles lurking down in the long tail, the Warfrogs and Ragnars and Columbias and SlugFests. How did you find out about them, and why are more publishers and titles appearing in the long tail of gaming? Anderson identifies three conditions that allow a long tail to survive and grow:

1. Democratizing the tools of production
2. Democratizing the tools of distribution
3. Connecting supply and demand

Let’s look at each of those conditions and see what’s going on to give us our current gamut of games.

Making Games More Efficiently

I can’t speak much about game production, and this is definitely an area that I need to research in the future. But I do know from talking with a few designers that affordable graphic design software has enabled them to create prototypes and design finished games that wouldn’t have been possible five or ten years ago. A game designer can get away without hiring an artist or graphics designer, yet still create a fairly polished product.

In addition, due to companies like Spielematerial.de, Meeple People, Rolco, Koplow and others, a game designer’s homemade game can have a professional look that rivals those of larger publishers.

Finally, printers have adopted digital print technology that allows them to create short print runs at much lower costs than would have been possible in the days of offset presses. Being able to print boards, cards and rules as needed allows self-publishers to avoid the flaws of yesteryear, when someone would sink thousands of dollars in an enormous print run. Being able to produce games more inexpensively allows someone to take more chances with an unusual game design.

Getting Games to Buyers

Most mass-market retailers care only about the hits. The economics of business force them in that direction. If I’m debating whether to stock two items – one that sells once a day and another that sells once every six months – I’ll go with the hit. I have a limited amount of shelf space with associated costs for that space (rent, heat, electricity, cleaning service), so I need to increase my chances of making a profit from that space by stocking the hit – or even the likely hit, that is, the title from a known major publisher that will be advertised.

When you look at specialized retailers, you’ll find a wider range of merchandise since those retailers expect to attract more knowledgable customers. Whereas the mass market store will stock one word game (Scrabble), one trivia game (Trivial Pursuit), one party game (Apples to Apples), one adult strategy game (Monopoly), and so on, the specialized retailer will stock five word games, five trivia games, etc. because their customers have already experienced The Word Game (as determined by mass retailers) and want to try something different.

These retailers still have limited shelf space, however, so they won’t carry everything. They simply can’t afford to do so, even if the games are good – which isn’t always the case, as Endgame’s Aaron Lawn described in one of his columns.

Online retailers avoid some of the costs associated with retail locations, which typically allows them to carry a wider range of products. By not limiting themselves to a local customer base, they have a greater chance of selling some oddball title.

And yet designers have a hard time getting those oddball titles in the hands of retailers because most of them will buy only from distributors – and distributors don’t want to deal with a publisher that has only one game to offer because of the hassle of the paperwork involved.

But niche publishers do have other options for delivering a game to a buyer, starting with the post office and delivery companies like FedEx. One-on-one delivery is time-consuming, but selling direct to a customer also allows a publisher to make a higher margin on a game. Publishers can attend game conventions where they sell directly to a buyer; although publishers can rarely generate enough sales to recover the cost of the convention, this avenue does give the game exposure before an audience of game buyers.

Designers can also adopt a downloadable format for their game or create a version for online play and require a membership fee in order to make an income from their creation. By moving to a purely electronic format, the designer forgoes the cost of production, as with downloadable music files and electronic books, and creates a product that’s available immediately around the world.

Connecting Supply and Demand

The short answer for how niche game publishers reach game buyers boils down to three letters: BGG. BoardGameGeek is the largest compendium of game information on the Internet, with descriptions, images, rules, strategy guides, and reviews of more than 34,000 games (as of February 2008). No matter how obscure a game might be, even an expansion that has only two copies or a preview game sent only to the press, it will undoubtedly be listed on BGG. Heck, even 500+ “different” Monopoly games are included in the database.

BGG’s comprehensiveness and volume of traffic are so large that it sucks in casual gamers like a tornado. If I search for mainstream games online, the Geek almost always appears in the first few links: Candy Land (third), Risk (second), Scrabble (eighth), Boggle (second). (Which site typically outranks BGG? Wikipedia.)

I get even better results if I’m searching for an older mainstream game, maybe something from my childhood: Survive? First. Bermuda Triangle? First. Dungeon Dice? First. Among the top search keywords in BGG’s January 2008 site stats are Risk, Clue, Monopoly, Boggle, Yahtzee, Mahjong, Pictionary, Stratego, Mancala, The Game of Life, Taboo and Sequence. If I’m a casual gamer and looking for a specific title, I’ll likely run across BGG. Sure, there’s a good chance that I’ll look once and leave, but if I stick around for any length of time, I’ll encounter more games than I ever knew existed.

While BGG is great for introducing newbie gamers to strange titles (Car-cass-onne?), it’s even better for introducing strange gamers to new titles, especially those that have no chance of ending up on gamestore shelves. Just a few examples:

• Phil Harding announced the release of Archaeology from his new Adventureland Games, and despite the shipping costs from Australia, he sells all fifty copies quickly, then rejiggers the game without the board.
• Bobby Doran releases a fifty-copy edition of Deep Space DrillerAce and markets the game in the BGG forums.
• Jackson Pope talks up his 100-copy edition of Border Reivers, the first title from Reiver Games, then follows up with 300 copies of It’s Alive. (Pope also appeared at the UK Games Expo and runs a blog on game development, so his marketing isn’t limited to BGG.)
• Mark Goadrich runs contests to give away a few copies of his Gene Pool and sells out 200 copies in short order.
• Steve Finn posts about two new card games from Doctor Finn’s Card Company, offering both Slush Fund and Scripts & Scribes for the cost of shipping in exchange for reviews, and gets a ton of responses.

While selling 50 or 200 copies of a game isn’t a reason to leave your job and start running the preses full-time, knowing that you can sell this many copies of a game is a huge attraction for a designer. You can show off something new, recover some or all of your costs, and perhaps get a buzz from a few early adopters.

After the first game sells, the designer can print a slightly larger edition of the next game – or perhaps pitch the title to a larger publisher will want to release an updated version with better bits. Martin Wallace and Friedemann Friese started with unimpressive-looking first releases, for example, but have since built up their reputations to the point where gamers eagerly anticipate each new game. Whether Pope or Harding or Finn or any self-publisher will develop into a superstar designer is impossible to determine, but they have a better chance of doing so than at any point in the past, simply because they can place their titles in front of more people and get the games published and shipped more easily than ever. Expect the tail to keep getting longer and fatter in the years to come…

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Comments:

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Very nice article - I like the “Long Tail” idea, and it definitely fits boardgaming (and other niche hobbies). The internet has made obscure things more accessible to more people - games included. Posted by Tim Isakson on Feb 16, 2008 at 08:37 AM | #

Very interesting read Eric. It gives hope to every gamer that has ever harboured a desire to make their own game. That is probably another 98% stastistic! Peace Posted by Brent Lloyd on Feb 16, 2008 at 10:49 AM | #

Excellent article.  I am relishing the Long Tail because I find so much stuff I enjoy there. Posted by Rob Cannon on Feb 16, 2008 at 01:44 PM | #

Excellent article Eric! Cheers, Giles. Posted by Giles Pritchard on Feb 16, 2008 at 11:03 PM | #

Eric, I’m a big fan of the Long Tail but don’t see the same applicability to the boardgame space.  Getting hand-made prototypes produced and distributed simply isn’t the same as the premise for Long Tail - you need zero to extremely low marginal cost of production and distribution (digital music and other digital media being the best examples).  A much better example is the Indie RPG world where you can leverage print-on-demand capabilities to manage inventory and costs with almost zero risk of over-production.  Unfortunately, the boardgame business involves assembly and diversity of components making it virtually impossible to scale in the same way. I don’t think production prototypes are what Long Tail was all about - it was about how to scale a business leveraging the huge aggregate value of niche markets. The real test to see if you could apply Long Tail economics to the boardgame business would be to ask Rio Grande Games if they could have a successful business releasing 1000 new titles a year and selling only 5-10 copies of each. Posted by Chris Brooks on Feb 25, 2008 at 11:18 AM | #

Thanks for the note, Chris! I realize afer the fact that I forgot to include many examples and ideas floating through my head. One of them is Arima.it, an Italian online retailer that sells downloadable files for both RPGs and board games for €1 and up. Cheapass, although in limbo for now, could have adopted this model of distribution to avoid any costs associated with the materials since players already supply their own pawns, money, etc. Speculating on how Rio Grande could sell 1,000 new titles is off the mark in terms of how the Long Tail functions. Netflix, Amazon and iTunes don’t create the work they sell; they provide a retail outlet for publishers and creators. In the examples I gave, the publisher isn’t even an issue because designers are selling directly to users, something made possible thanks to the growth of BGG. BGG is the iTunes of the game world—or at least it would be if these game designers sold their work directly through BGG (just as independent musicians upload songs for sale onto iTunes). Right now, these designers merely post about their games with links to an outside website; ideally they would post their games in the BGG marketplace and give BGG its cut for helping them sell their stuff. I can imagine other designers adopting a similar direct-to-consumer sales model in the future, especially when they have a niche design. Jeff Henning of Troy Press is using this sales model for two new titles, Albion and Atlantic City, but he’s publishing something like a thousand copies of each game, which is a larger gamble than those who run off 50-100 copies of a title. Name designers like Friedemann Friese or Martin Wallace or the Ragnar Brothers have sold directly to customers in the past and could easily do so again in the future. Whether the increased percentage of funds kept per sale is worth the hassle of mailing out hundreds of games individually is another topic… Posted by W. Eric Martin on Feb 25, 2008 at 12:54 PM | #

Chris Brooks wanted to post a reply to my note, but the system blocked him for some reason, then I forgot to post it here. Sorry, Chris! Here’s his reply: My fundamental issue with your comparison is that Long Tail is about profitable business models, and I think your assertions and comparisons are about hobbyist sales models that could never scale in the way that Long Tail economies should.  This has little to do with whether sales are direct-to-consumer, DTP downloadable designs, or traditional publish/distribute models.  Boardgames are not books, are not downloadable digital media, and the margins only come from selling “hits” - witness the GMT P500 model and RG model of relying on relatively safe bets. The first paragraph of the Wikipedia article on Long Tail says: “The distribution and inventory costs of those business allow them to realize significant profit out of selling small volumes of hard-to-find items to many customers, instead of only selling large volumes of a reduced number of popular items. The group of persons that buy the hard-to-find or “non-hit” items is the customer demographic called the Long Tail.” As a publisher, I can tell you that there is no profit in *producing* small volumes of boardgames.  Not that folks won’t do it, they just won’t be able to make a real business out of it (i.e., quit their day jobs).  You don’t make up negative or break-even margins with volume! So while I don’t dispute your assertions about the value of BGG in connecting buyers and sellers (or eBay for that matter), I just don’t think Long Tail economics apply to the boardgame publication business yet.  Someday if we can get print-on-demand cards, rules, boards, and bits with automated assembly allowing for short-run productions (short-run == 5-100 units) then it could work.  I think we are a ways away from there though. Posted by W. Eric Martin on Mar 6, 2008 at 12:28 AM | #

Chris, we’re approaching the topic from different POVs, so we might be talking past one another. I’m thinking about the Long Tail for the designer and the game player: As a designer, how do I get a game in front of people who might want to play it? As a player, how do I find games that interest me? While the business model might not be profitable, designers can now more easily connect with players and that’s what important to me: the availability of a wider selection of games, not the costs or profits behind the scenes. Similarly, I’m indifferent to how much iTunes or Rhapsody makes from the vast quantities of tunes that have single digit sales; as a buyer of music, I want to be able to find the tracks that interest me. Posted by W. Eric Martin on Mar 6, 2008 at 12:46 AM | #

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