Business of Boardgames: The board game “Bubble” doesn’t exist


Hey everyone, Nathan here with my third in the “Business of Board Games” blog posts.  This one is going to be pretty free-form and I want to address a couple of common misconceptions that I hear.  Some of these are on the internet.  Some are overheard from other publishers at conventions.  Some are things I’ve heard from distribution.  So, flame shield ready, lets go.

There is No Board Game Bubble

 Let’s first talk about what a bubble is.  As someone with a background in finance, the misuse of this term since 2008 in the popular lexicon is annoying at the least.  An economic bubble is a very specific set of conditions.  I also get annoyed when people try and draw parallels between Tulipmania and the Great Recession because those are also not the same thing.

 A bubble exists when an asset’s price (be it real estate, a black lotus card, a stock) appears to be out of line with any reasonable value of that good.  This means that the laws of supply and demand are completely out of wack for some reason.

 There are two main causes of a bubble. 

 Equity Bubbles

 One is an equity bubble.  Some new asset/innovation is discovered and the demand for it is unsustainable.  Basically, something amazing (Tulips!) are discovered and people lose their minds and want to buy the hell out of tulips.  Usually this is a type of good (stocks are the best example) that are easy to sell and are highly liquid.  Eventually people realize that unprofitable websites in the late 90s are not all going to be billion-dollar companies and that tulips are flowers, and prices go back to reasonable levels.

 A great example of this that is less popular to talk about (and probably easier) is the Poseidon Bubble.  It sounds cool and is easy to follow.  Basically, in the late 60s nickel was real expensive, because the Vietnam War created demand and there were shortfalls in nickel production.  A company in Australia (Poseidon Nickel) made a discovery of what appeared to be a substantial amount of nickel. Investors got real excited and bought the hell out of it.  Then when Poseidon Nickel shares became too expensive, they started buying other companies’ stocks who were also exploring the area around the discovery. 

 So, there are two clear things working here: 

  • Nickel is valuable, and there appears to be a discovery of more nickel.
  • It’s easy to buy stock.

Fast forward a few years…by the time Poseidon actually started to produce nickel the quality of the nickel was lower than expected and the extraction costs were higher.  By 1974 Poseidon Nickel was bankrupt.

Now, it’s not that Poseidon Nickle had no real demand.  The demand was absolutely 100% real.  Same with Tulipmania and the Bubble.  People absolutely wanted to buy stuff because of a perceived future value that would be higher.  When it started to become clear that the future value would be lower than expected, the bottom of the market fell out.

Debt Bubbles

The other (and probably more famous) bubble is a Debt Bubble.

 Debt Bubbles are created not by equity investing, but by debt spending (i.e. borrowing money) in order to invest in something that you hope will return a profit.  Usually the thing you are investing in has little or no demand.  This makes the investment unprofitable, which in turn means you can’t pay back the borrowed money.  This then means the people who loaned you the money don’t get it back and they are less likely to loan money out (either out of fear or lack of capital). 

 Usually this is created by a few common things:

  • Easy access to cheap borrowed money.
  • A belief in the underlying value of the investment.
  • That belief being stupid at the end of the day.

I’m not going to get into the housing bubble.  But all of these things were present, and you can argue among yourselves which political party is really to blame for all of it. (Spoiler: it’s basically everyone’s fault.  So just stop it.)

Back to Board Games

So.  Here is the thing.  Most of you aren’t speculating on future board game values.  I mean, sure.  Some of us buy 2-3 copies of a Kickstarter hoping that the secondary market value of the other copies might pay for the first. 

But for the most part, we buy games to play them.  Not as investments. 

No one is borrowing vast quantities of money in order to buy up board games to sell them.  There is no great “run” on board games that have caused games to routinely triple in price beyond hard to find collectors items.  That market is extremely thin, and again, eventually someone intends to play that game.

Wait, So What Are We Talking About?

So, when people say there is a bubble on Kickstarter or a bubble in the board game industry, what they probably mean is something along the lines of:

“This isn’t going to last.”

Which means they are arguing that there will be a market correction.  Fewer people will be buying games.  Fewer games will get made.  Publishers will go bankrupt because they produced games that people didn’t want.  Board games will stop earning as much money on Kickstarter.  Or some combination of those things.

And, they would be absolutely correct.  This isn’t going to last.  But, so what?

“It’s too bad she won’t live. But then again, who does?”

Fun fact: Blade Runner is my favorite movie of all time. 😊

So, will there be a market correction in the board game industry?  Yes. 

But that’s always been true.  The trick is, when is it going to happen, what will it look like, and what will the effects of that be? I have the answer to all of those questions for what it’s worth. 

The answer:  No one has a clue. 

Assuming everyone in an industry is a rational actor (i.e. trying to make money) it means we are all doing everything that we think is best to stay in business and stay ahead of problems.  I think most of us have felt a *slowing* of growth in the games industry and there are some hard numbers that show the same.  Sales are not flat or lower than they were 2 years ago.  But the rate of expansion is slowing down.  We’re probably nearing the “peak” of consumer demand.  But again, I could be totally wrong, and games could go even more mainstream. 

There are also more games coming out, and that means sales are being split unevenly (see my last blog post for more on this).  Because of the slowing demand in overall growth and the Superstar problem, it also means we’re all taking what we think are rational steps to correct this issue. 

For Pandasaurus that’s making less games and supporting them heavier.  For other companies that may mean more Kickstarters or direct consumer orders. (We’re doing 2 Kickstarters a year for our “core” games only – check out Godspeed, live now!)  For other companies that may mean making more games at lower quantities.  It’s going to be different for everyone.  And none of us actually knows if we are right.

Growth may not be slowing.  We could have bad data, so we could instead be feeling a hiccup that we mis-read.  Growth could expand massively in the next 24 months.  Board games could be the new pet rock in 2020 and we could all be sitting on mountains of money. (Please, Universe, let this last option be true.)

Or, everyone could decide that newly relegalized lawn darts are the new thing to do and you could all en masse stop buying board games.  Then, we’ll have a real issue on our hands.  But those lawn dart manufacturers are going to make bank.

The fact of the matter is, none of us know what’s coming.  If we all knew 100% what was coming, we would already have all taken the exact perfect actions to plan for it and take advantage of it.  And that’s the way markets work.  People place bets on where they think things are headed.  Companies place bets on games they think will sell all the time.  And all of us think we are right, or we wouldn’t do it.  Some companies are really good at it, some are bad at it.  And consumers will reward those that had it closest to correct.

Those that have been in the industry longer probably have a better idea of what’s coming because they’ve been through market downturns before.  But then again, they could be doing everything exactly wrong because they may expect whatever is coming to look like the D20 crash.  Or the CCG bubble/crash (this, I think probably was a speculative equity bubble along with comics and all of the other 90s collectibles).  And it might not.  In fact, it may be so different that more established publishers do everything exactly wrong.

So, I keep contradicting myself.  And it’s because no one has the answer.  We certainly think we do, or we would be doing things differently than we are.  But, that’s true of basically everyone.  We all think we know what we’re doing, and we all look very smart.  Right until the moment that we were completely wrong.

So, What Do You Do?

Diversify and hedge your bets. 

Pandasaurus Games is kind of an odd publisher.

We make a number of family-friendly gateway games.  Machi Koro, Wayfinders, Mental Blocks, etc.

We make a number of small-box card games.  The Mind, Illusion, The Game, Silver and Gold, etc.

We make a number of larger gamers-games.  Wasteland Express, Dinosaur Island, Dead Man’s Cabal, Godspeed.

The idea here is if we make a swath of games across a few different sub-categories of hobby gaming that we’re able to do well if there is a shift in consumer behavior.  If core games sales slow, maybe mass-market friendly card games will see us through what’s coming.  We don’t want to be overly specialized in case one of those categories changes drastically in the wrong way.

Some companies have diversified into miniatures or dice or RPGs, and we haven’t done those things yet.  Mostly because our philosophy is, we need to do it 100% correctly or not at all.  Just cash-grabbing into a different category for the sake of it isn’t our style and feels like it would hurt our consumer relationships.

There Are Too Many Games

This is almost certainly true.  But I can’t do anything about it.  Neither can you.  Maybe one day something will come along to change that, but for right now Pandasaurus Games has no control over how many games come out.  We can reduce our release schedule to 50% of what it was last year, but that is a drop in the bucket of the number of games that will come out next year. 

The reason we make fewer games is so that we can make better games that we are more focused on.  We don’t make fewer games because there are too many games.  We make fewer games because we need to make games of the utmost quality so that they stand out.  We also want to curate our release list so that customers generally trust that our games are good.

There are a lot more publishers than there were a few years ago.  There will be even more next year than there was this year.  This is the result of a growing market and a relatively low bar of entry.  This isn’t film making or video game programming.  Anyone who wants to spend 3–4 months learning about production and hires a few specialists (designer, graphic designer, illustrator) can launch a Kickstarter.

This means there will be new publishers so long as there are people willing to back those games.  Or if people are willing to go to conventions and buy them.  Or people willing to look at new designers and publishers and consider purchasing their games.  Or if new start-ups are willing to make game publication a side-gig and not their primary source of income.  You can produce a board game for relatively little money in the grand scheme of starting a business. 

This is a good thing.

I may be the only publisher you ever hear say that.  Competition in the board game space is the reason our market has grown as much as it has.  The average game that comes out in 2019 is better than the average game that came out in 2009.  Competition is a furnace, and the games that come out the other side are better for it. 

The fact that the average game quality has gone up is the reason the hobby has grown.  Someone walking into a store and playing Azul makes them more likely to discover Machi Koro.  Someone playing Dinosaur Island may lead to them buying Root.  What you don’t want to have happen is the cause of a ton of video game busts:  low quality shovel ware.  You can go read about the video game market crash of 1983. 

I would also argue that the D20 and CCG crashes were caused by the same thing:  the market being flooded with incredibly low-quality games that were churned out to quickly.

Why Is This Different?

All of you.  I’m not just saying this to suck up to our customers.  I genuinely feel that consumers in 2019 are better educated.  Partly this is technology.  It’s easy to look up a Yelp score of a restaurant.  It’s easy to look up a BGG rating.  But these work because consumers are engaged with their entertainment.  Y’all are smart, savvy and invested. 

I am not going to name names…but there are companies that have attempted the shovel ware route of game publication.  And they aren’t succeeding.  The customer base is quick to call-out a cash-in licensed game.  Or a game with overproduced components and poor gameplay. 

I mentioned how competition is good because it’s a furnace.  I think our customers are the fire.  I might not always like what I read on Reddit or BGG, but our company always takes it to heart.  If we do something wrong, or we see a competitor being rewarded for doing something, we try and figure out how to learn and improve ourselves.  Molly’s and I’s job is to make sure Pandasaurus Games in 2020 is better than Pandasaurus Games was in 2018.  It’s why we’ve grown our team size, but it’s also because we read loud and clear where we were making mistakes, but also where other companies were doing better than we were.

At the root of our solution to the problem:

Make Good Games

Oh hey, here is a real novel idea.  Make good games.  Or more precisely, make a game that has a reason to exist.

This is a conversation I’ve had with Jonathan Gilmour several times.  The games that we publish need to have a reason to exist.  If we go to a show and see a game that is 95% mechanically similar to a previously released game, even if it’s a little better than that game, why publish it?  It doesn’t need to exist.  That doesn’t mean it’s not a good game, but it doesn’t serve any real purpose in the marketplace.

We saw this a lot right after Worker Placement Games and Deck-Builders became popular genres.  Games got created because the genre was popular.  Some of them did unique things with the mechanics and succeeded.  Others felt exactly like Dominion and there is absolutely no reason for “Oh hey, it’s like Dominion, but not!” to be published.

So, we wind up with games that are mechanically unique (sometimes extremely so) or at least offer a fresh take on an existing mechanic that elicits a feeling you’ve not had before playing a game. 

We can’t control how many games come out.  We can’t control market corrections.  We can’t even prevent a bubble from forming if you all start weirdly speculating on board games.  But we can make sure that every game we put out is high quality…but beyond high quality: that it has a reason to exist on your shelf.


Tagged with: Business of Boardgames

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  • Great post, Nathan. Thanks for this.

    Though, I’ll say it’s not quite accurate that board game investing isn’t a thing. I’m seeing more and more retailers buy out popular games from distributors, then leisurely sell them for 10-40% above MSRP for however many months (or sometimes years) it takes before the publisher can get another print run out.

    Travis on
  • Great post, congrats from Spain. I didnt know well your company or any of your games, I just came redirected from FB. But the well writing, letting me know how is the people behind your company (and the unique insider voice regarding the market) has made me already purchased a couple of them. As a Business man myself, it makes me feel more attached to your company and your games from the very beginning. Hope they are as good, fun and “human” as the CEO of the company.

    Just a tip: include links in the article when refferring to your own games. To your webpage, to bgg or wherever. Don’t make a potential costumer like me bother to leave your article (and your page), switch to google (or the app) and look for “Kickstarter Godspeed” to find out your game (hopefully, because something else might get my attention in the meanwhile).

    Carlos on
  • As always such great points made in your blog articles.

    Brandon Palmer on
  • “Does this deserve to exist” is a question I constantly ask myself when I’m working on a new game design. Not every idea needs to be a product, and identifying that (even as a designer) is super important.

    Daniel Newman on
  • Good thoughts, and the misuse of “bubble” is something that’s bugged me for a long time… but that’s not why I’m here – I think one item you didn’t touch on with CCG games – the core business model isn’t really sustainable for a large number of competitors. The key to CCG games is an artificial scarcity imposed by publisher combined with a liquid marketplace driving demand in the game. If you don’t have these two things, it’s going to fail since part of the appeal of the successful CCGs is the value proposition of the cards combined with the integration of the community (since all players are required to have decks).

    Board games strike me as more of an “indie video games” model, where you can produce a quality product for minimal overhead with a small team. You have room in the market for a few AAA titles (Dinosaur Island) supplemented with your more obscure and niche titles. While there is some element of scarcity driving the market (defined by print runs), it’s a different element from CCGs, where the scarcity is based on the advantage something gives in the game, rather than the desire of a specific experience.

    I don’t think the market is going to die any time soon. I think you’ll see publishers “jumping on the bandwagon” die out, and I think you’ll see publishers who can’t adapt to the changing market die out as people begin to expect higher quality components and experiences.

    Anyways, sorry if this is a bit rambling. Good post!

    Mike on
  • Nathan, I think you hit the nail on the head in a lot of ways in this blog post. The point about diversifying your company’s offerings across game segments was particularly insightful for me.

    As a new game publisher that is just starting out, we’ve been following the market (specifically Kickstarter) the last 2-3 years and even in that time period, we’ve noticed a racheting up of the quantity of new games.

    Competition is fierce. But as you say, it’s a furnace that should lead to higher quality games. Just by looking at new Kickstarter campaign pages by small or first time publishers, the quality seems to be improving across the board, day by day.

    What we’ve also noticed though is that as the quality of campaign pages and marketing efforts improves, it becomes harder for consumers to differentiate between games. If everything looks beautiful and unique, then nothing is.

    How do consumers ensure that the game they back this month is something they’ll enjoy more than the 10 they don’t back? Obviously, there is an important role reviewers, board game media and other influencers play in determining whether a game will be Root or Little Root but as you mention, it will always come back to the players and their experiences relayed through reviews/ratings.

    I think this is why big playtesting efforts like what you’ve done for Godspeed are the way forward, as they establish a community around the game – the bedrock of any successful release – which help substantiate the campaign and differentiate it from the competition.

    We’re actually taking this idea in a slightly different direction through our Play Before You Pledge campaign, where players can essentially go into 130 FLGS / cafes in 13 countries to play a demo copy of our game for the 6 months prior to our KS launch and pre-back through the store. In some respects this shows the irony of the current system, but in the long term we hope that it will help build that community while channelling some of the excitement and profits from KS back into brick and mortar stores.

    Sean Lemon on
  • Spot on Nathan. Great read!

    Jason A McCracken on
  • Nathan,

    Yeah I agree. And your assessment is spot on. The problem isn’t too many games, it’s often too many bad games. as you’ve pointed out in the video game and CCG industry as well.

    David Lockwood on
  • @David – for sure, and some of those early deck builders were very good. And many of those are still around. I’m certainly not arguing that other deck-builders should not have existed… I think that Ascension is one of the early competitors to Dominion and it was substantially different other than the core mechanic.

    but there were plenty that were just “well, we have a license, lets make a deck builder with it”.

    Nathan McNair on
  • Very educational and entertaining read.

    However as for your example with Dominion; I didn’t Dominion, but I did like one of the other games that were like Dominion, but.

    Besides the quick cash ins (and I’m worked in the video game industry, I see this happen all the time) sometimes have choices helps. If Dominions was the only Deck Builder I had access to I might not ever discovered one of my favorite mechanics of all times.

    In this case I am glad we have choices (thematic and mechanical) of similar games.

    David Lockwood on

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