11 Mar

Why the Buy Once, Use Many business model makes Great Games Scarce

Bar Chart

Bar ChartYou’re hungry. You go to the store and, being a health conscious and overall enlightened person, you buy an ecological carrot. You eat it. Now you’re full (did I mention that you’re a real small eater, too?) and your carrot is gone. If you grow hungry again you need to go back to the store and buy another one. That’s the “buy once, use once” business model.

You’re a hockey fan. A big, big fan. You buy season tickets the moment they’re available. You buy season tickets for your entire family. You’re a great customer, someone who’s a pillar of support for your team. But once you’ve bought your season tickets you can go and see all the games without paying anything extra. That’s the “buy once, use many” business model.

You collect baseball cards. Whenever you’ve got a dime to spare you go an buy a pack of baseball cards (this is a long time ago when a dime was still worth something). You buy the pack and you rip open the pack and you see that you’ve got a bunch of cards that you’ve already collected. You aren’t coming closer to getting your entire set. That’s (almost) a “buy many, use once” business model (it’s hard to find pure examples of buy many, use once, but you get the point).

You’ve got a house. In your house you’ve got a kitchen and in your kitchen you’ve got a trash basket. Every so often you take out your trash and every so often the garbage men come by and pick up your trash. But for them to do that you need to pay a monthly fee, a fee set by the county council and levied on everyone who has a house. You need to pay the fee no matter how little trash you throw out and once you pay it you can throw out pretty much as much trash as you want (not quite but almost). That’s a “buy many, use many” business model.

Games are Buy Once, Use Many

Buy once, use once is a classic model for consumables and disposable. Your clients buy something, they use it, they buy it again. As long as whatever you’re selling doesn’t fall out of vogue you’ll be able to keep selling and reaping the profits.

Re-use businessmenBut games aren’t like that. Games are buy once, use many. Your clients buy a game once and then they get to play it as many times as they want (until they wear it out, but that doesn’t happen nearly as often as you’d like).

Where does that leave you as a seller?

Well, you want to sell your games so you need them to be popular. But once you’ve sold them you don’t really make any money from people playing your games. You don’t care if people play your games as long as they buy them.

So you don’t care about the quality of your games. After all, you’re not earning anything from people playing them. But word gets around that the game you produced stunk, so now nobody is buying it anymore. Your game is worthless. What to do?

Well, you could try to create a great game, one that people will want to own and play over and over and over again. That’s hard, and might require large investments in development and testing buy you’re a good you; you invest in making the Greatest Game of All Time.

Now you’ve got your GGAT. Rumor flies, people love it, you sell games like crazy. But they you notice something. People still rave about your game but no one is buying it – everyone who could has already bought it. You’ve saturated your market and not making any money. Worse, this is the GGAT, and people only play the GGAT. Your next game flops as people are still playing the GGAT. You’re actually losing money due to your GGAT. What to do?

You don’t want a stinker, as nobody will buy a stinker. You don’t want at GGAT as everybody will but the GGAT and nothing but the GGAT. So what do you want?

You want a game that everybody thinks is the GGAT but that is actually a stinker (or almost, it should be slightly better than OK so you don’t destroy your company brand name).

95% of Sales the First Two Weeks

Do you think this is a dystopia of the gaming industry? Think again. 95% of all sales for an average video game happen within two weeks of the game’s launch. Two weeks is, just by coincidence, the point at which independent reviews and rumors start to gain enough momentum to become visible amongst the previews and fan speculations.

Love Letter cardsThe timing for board games is somewhat longer. If I’d guess I’d put it into months, but that’s only a guess (if someone with an insight into the market and reliable statistics could say where the break point goes I’d be much obliged). But I still see the same pattern – rave previews, lots of building of hype, pre-orders, large initial sales and then the long tail of a dying game until it turns up in the $1 bargain bins.

This pattern means that a company that wants to stay afloat must have one of the following: a large catalog of current games, a popular game that can be serialized (like Settlers or Carcassonne) or a high throughput and loyal, cash heavy fanbase (think GMT wargames).

Or it needs to change the business model under which it operates.

Buy once, use once is hard to do with games. You can do it for games that use an ante, like any type of gambling games where the house takes its share, but it’s hard to do with board games. Risk: Legacy attempt to do this, and succeeds at least somewhat. Trivia games, like Wits & Wagers Amazon or TP use this model but they need to walk the line between that and buy once, use many as no one would buy a game that consisted of a single question: you want a number of questions so you feel that you’re getting value for your money, while the company wants to give you few enough questions so that you’ll buy the expansion pack (and then it’s into “serialized” realms).

TCGs as Buy Many, Use Many

You can attempt the “buy many, use many” model, as most TCG:s do, but then you’re facing the dilemma of “what will we do when people stop buying cards because they’ve got enough cards to play with”. The answer to that is power creep: make sure that new cards are better than old cards – yes, you can play using only old cards but if you want to stay on top of the game you need to buy the new expansions.

Magic the Gathering draw deckPower creep kills a lot of TCG:s. You’ve got a franchise that’s chugging along nicely until all of a sudden you reach a point where the power you’ve thought up combines with old power in such a way that they break the game. Like vehicles in Battletech – just as good as mech but much cheaper. Now we’ve got Combat Cars, hooray!

There are ways around that, like what I believe Legend of the Five Rings Amazon is doing with its reboots (I don’t know as I’ve only read about it, someone who plays L5R might want to comment here). Magic the Gathering Amazon occasionally comes up with a broken combo and needs to ban cards but for some reason (I suspect insane amounts of playtesting by the development team) it’s managed to power creep without breaking the system, but I got out of Magic so long ago that I couldn’t say for sure how it is today.

Games Workshop does something similar yet opposite with the 40k and WFB franchises: it power creeps it’s players. Since they know that their average customer starts at age 12 and goes up to age 16 “when they discover cars and girls”, they make sure that older sets are simply removed. And since the players keep changing they’re getting fresh batches of buyers who can chose between old models and new, official ones. And at that age you really want to be in the “in” group so you go for the official models.

MMOGs go with the opposite model: buy many, use many. As long as you pay the subscription you get to keep playing but once you stop paying your game ends.

The closest to buy many, use once that I’ve seen in gaming is TCG:s or games aimed at collectors in some way but I haven’t spotted a great example of this yet.

So what does this all mean for the hobby gaming world? Well, not much that we don’t already know. Companies need to keep pumping out games in the hopes of finding the next TP, or Settlers of Catan Amazon, or Ticket to Ride. Or they need to keep pumping out games in the hopes of finding the next Tzolk’in Amazon , or Through the Ages, or Race for the Galaxy Amazon. Or they need to keep pumping out games in order to stay ahead of the bargain bin monster.

Either way, companies need to keep publishing games, and doing so at a high enough pace to keep their fixed costs covered while player interest remains. Remember, that bin monster doesn’t wait for anyone.

I’m not complaining, mind you. There are loads of great games coming out, and even the bad games of today are at least on par with the average games of yesterday. And if you go far enough back in time then today’s bad games are yesterday’s gold. It’s just that player expectations experience power creep as well.

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