Saturday, August 12, 2006

Early Adoption is Smart Money

Buy now, dear gamer, or regret it later.

Okay, so here's my thesis: The widespread availability of information regarding the nature and quality of board games, coupled with the limited production runs and instability of the small companies producing the games makes it economically advantageous to be an early adopter of games. Or, in short, if you research a game enough to be reasonably sure you'll like the game and you can afford to buy the game, it is to your advantage to make the purchase the game sooner rather than later.

In days of yore (i.e., pre-mid 90's), being the first on your block to buy a game was very risky. Operating on limited information, you could easily end up with a game that wasn't worth the cardboard it was printed on. One had to rely primarily on advice from the FLGS, local friends, biased company magazines and marketing material in deciding which games to purchase. Today, with the wide resources of the gaming websites, podcasts, postings of game images, replays, and rules, and other on-line information, in most cases you can have a very good idea of whether you'll like a game before you shell out the dollars to buy it. While you'll never truly know how good a game is until its sitting in front of you on the table, the odds of a huge disappointment are dramatically less today.

Even the risky practice of pre-ordering on a P500-type of list today is heavily mitigated by the visibility and availability of designers to their gaming public through forums such as Consimworld. Companies have, in some cases, helped gamers accept this higher level of risk by offering early shipment, price discounting, and even bonus features such as extra scenarios to entice gamers into semi-blind ordering.

The risk of not picking up during its initial print run presents an economic threat of its own. A sizeable portion of games, even the good ones, are slow to be reprinted if they are reprinted at all. If you miss out on the initial print run, chances are you're going to be waiting a while or paying a significant premium. Even games which will be reprinted can experience temporary spikes in market value while they are temporarily out of print. If you wait to long to buy a game, you're probably going to pay more for it if you can still find it.

In most cases, assuming you've avoided the purchase of a stinker game, the main true cost in the purchase of a game is the transaction costs associated with the purchase (i.e., shipping, sales tax) and the opportunity cost of tying up your money in a game while you own it. Good games almost never go down in value and can in fact have huge increases in market value in a relatively short period of time, starting at the end of print runs. Even average games, assuming they are well maintained, have a good chance of fetching at least their original market value once they go out of print.

This phenomenon of prices escalating the longer the game has been released seems among the gaming hobbies to be somewhat unique to board games. In general, with video games, RPGs, and CCGs, the longer you wait to pick up a game, the cheaper it will be. After CCGs go out of print, they can usually be picked up by the caseload at deep discount prices. Computer games get cheaper until they eventually become shovelware or even abandonware. RPGs, once abandoned by their publisher, are usually archived electronically and available in the fan community.

So, while I'm sure there are exceptions to every point I've made above, in general I think it is to a gamer's advantage to buy sooner rather than later. There's many an out-of-print game I would like to get my hands on now that I just can't bring myself to buy at inflated aftermarket prices. Please note this thesis was dreamed up by me while jogging in the San Antonio heat today, so I'm sure there some logical leaps present in my reasoning. Thoughts?


At 9:31 PM, August 12, 2006, Blogger Simon said...

Umm, (to be nitpicky) the graph is kind of the opposite of what you're saying, unless it's supposed to be of other things not boardgame.

As a marketing type, I have a hard time with early adoption theories where one is on the consumer side rather than the production. So of course to be a good and profitable practitioner of my discipline, I'm required to say you're absolutely right! Keep on buyin' Mr. Core Market! :P

At 9:56 PM, August 12, 2006, Blogger Ben said...

Good point on the picture. I updated the picture with a more context-appropriate Shadowfist card.

Early adoption is probably not the right term on the consumer side... its more like basic supply vs. demand, where supply is finite while demand can continue to grow over time as new gamers enter the market over time as the game gains collectability. I would imagine stamps, baseball cards, and perhaps comic books might experience a similar pattern, though with all of these a lot more hay to sort through to find the good needles.

Or, perhaps my argument is all just a deep-seated rationalization to justify buying more games...

At 2:08 PM, August 13, 2006, Blogger Mark said...

It's your survival instict kicking in Ben.

I agree with you to a point. If there is a game you must have, then buy it sooner rather than later--just to avoid the nuisance of going through the resale market. Games do tend to hold their value but only in nominal terms. When you consider time value of money you find that you're most likely losing money (if you're the seller) in real terms or just breaking even. Still, I would rather have Republic of Rome sitting in my closet than a bunch of old CDs.

At 1:57 PM, August 14, 2006, Blogger Ben said...

The key, with any investment, is to identify it as a good one before it increases in value (e.g., Dell Computer around 1990; Star Wars Epic Duels two years ago...).

Some of the Eagle Games strike me as potential collectors items right now... I suspect CotE2 (like its Milton Bradley ancestors) will fetch a good price in future E-Bay auctions. Railroad Tycoon may as well... Now, I doubt I will go by some extra copies to sit around in shrink until the time is right, but if you haven't picked up these games yet, I would jump on them now if you're at all interested.


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