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The Economics of Games: Manufacturing

As game consumers, we typically only see the end-point of the long process of bringing games to market. And, when there’s something we don’t like about that end-product, it’s easy to criticize, even if we don’t understand the whole process. In fact, there’s been a lot of criticism lately about a certain game that has been very scarce in the marketplace, and I can already see criticisms starting to bubble up concerning the big price increases that are going to occur in the United States if Trump’s tariffs happen as announced.

So I wanted to deviate from my more common focus on game design this week to talk about game manufacturing, particularly the very real costs and the very real risks that are implicit in publication. (This will be probably the first of two parts: tariffs will follow, assuming they’re still an issue in two weeks time.)

The Economics of Manufacturing

Stonemaier Games published Elizabeth Hargrave’s Wingspan (2019) early this year. This bird-themed game of engine-building and set-collection immediately became the year’s most sought-after release; much as with Stonemaier’s Scythe (2016) of years past, this led to huge scarcity: there just wasn’t enough to go around. The game’s already been reprinted three times, but as of this writing it’s still largely unavailable.

This unavailability of the year’s hottest game has led to entirely understandable frustration, but it’s also led to some claims that just don’t match the reality of games manufacturing, such as assertions that Stonemaier obviously should have known to publish more, or even allegations that they purposefully make their games scarce.

Here’s why these conspiratorial claims don’t match up with the actual realities of games manufacturing:

Why Not Print More?

Printing the actual game is usually the single largest upfront cost of game manufacture. (The other large upfront cost tends to be art, which was probably particularly notable for Wingspan, with 170 pieces of unique bird art, more on which momentarily). This upfront cost tends to be the main restriction on print runs.

In the case of Wingspan, Stonemaier publisher Jamey Stegmaier reached out to his distributors sometime before August 2018, and they suggested he print 10,000 copies of the game, after which Jamey made the actual decision, and settled on that 10,000 number. This is a relatively large print-run for a game, particularly for an unpublished game designer; I personally find it pretty big for an ornithologically themed game too. Perhaps it’s not as big for Jamey, who has done a phenomenal job of leveling Stonemaier up with games like ScytheViticulture (2015), Charterstone (2017), and Between Two Cities (2015), all of which have about 10,000 copies recorded on BoardGameGeek alone … but much of the gaming field (and particularly the American gaming field) would be very happy to print 10,000 copies of a game.

And, those 10,000 copies are expensive. Jamey was kind enough to share the exact numbers with me*. Wingspan had a unit cost of $11, which means that those 10,000 copies cost $110,000. There was an additional $20,000 in freight, which is always a major cost when printing in China. That totals $130,000 just in manufacturing, without even counting the art cost or the many continuing costs, such as warehousing fees and royalties to the designer. (How much would art add to the upfront cost, for 170 full color pictures, some of which appear to be watercolor and some of which were colored pencil? Maybe Jamey could have gotten them for $100 each, which would have added $17,000 to the price tag, and brought the total upfront of cost to almost $150,000, but since that’s speculative, and the numbers could easily have been two or three times as much, I’m going to leave it out of my calculations.)

Now let’s presume that Jamey has some magical instinct that his distributors were wrong. He decides to print 20,000 instead of 10,000. He actually doesn’t get a lot of advantage out of this financially, because at 10,000 units he’s already seen most of the economies of scale in play. But, he gets a slight discount down to $10.50, based on the quote he shared. So it’s $210,000 production cost, plus now $40,000 shipping: exactly a quarter of a million dollars.

A board game publisher betting that amount of money on a brand-new game from a brand-new designer would frankly be foolish. Going with the 10,000 copies that the distributors guesstimated would in fact have been foolish for many publishers, because those distributors weren’t making a commitment, they were just telling Jamey what they thought they could sell — probably based on sales of his previous games, none of which were anything like this one. Betting and losing $130,000 could knock most small-to-medium game publishers out of business. But Stonemaier, has done quite well, reporting revenues of $9.6 million last year. So could they afford a $130,000 bath if Jamey and the distributors were wrong? Maybe. How about $250,000? That’s getting a lot bigger. And revenues certainly aren’t the same thing as profits. I would not be surprised if a $250,000 would wipe out Stonemaier’s profits for a year, because board game publishers just don’t have that large of margins: they’re earning a small percentage of the retail price of every unit. Whether that amount of loss would knock a company out of business or not, it would certainly slow down the rest of their production for the year.

That’s because publishing is all cash flow. Though you might have $9.6 million in revenues flowing into a company over the course of the year, it’s flowing out just as fast. You’re paying warehousing costs and art costs. A percentage of every dollar is probably going to designers as royalties. And most importantly, you’re printing stuff. In fact, unless you’re vastly successful, you’re probably constantly waiting for enough money to show up in your bank account to pay for a print or a  reprint of whatever the public is wanting next. And whenever you print something, you’re removing that money from your cash flow up for half-a-year at a time. Take Wingspan: Stonemaier paid $55,000 when production began in August 2018, then another $55,000 in November 2018 when it shipped out. They didn’t see any return on that investment until January 2019 when Stonemaier sold direct preorders to fans, and then distributors didn’t pay them until April 2019, 30 days after they got their games. So Jamey tied up the first $55,000 for 5-8 months and the next $55,000 for 3-6 months. That’s rough. And even rougher if you’re talking about twice as much.

Generally, you might go with distributors’ guesses because they sort of know what’s going on. Still, there are no guarantees, and you could lose everything. When you start to increase that guess just based on your gut, it becomes increasingly risky. And a lot of that risk appears as a slowdown of cash flow: the more you invest, the more likelihood that you’re printing too much and actually locking up your money for years, not months, and thus the more you impact your ability to print and reprint other products — which is the cycle that ultimately keeps a game manufacturer printing. Without it: you die.

(A Personal Aside from Ye Olde M&M Author)

The idea of a bad overprinting killing a company isn’t just a fantasy: I’ve personally seen the next closest thing. Long before I wrote Mechanics & Meeples (or Designers & Dragons), in the mid ’90s, I was working for Chaosium, and we had a popular CCG called Mythos. We published it through several collectible sets, and each one sold out, leading the distributors to demand more the next time. However, we were growing concerned about how much money these Mythos print-runs were sucking up in comparison to our overall revenues: it was obvious that we were talking about company-ending costs if one of our releases didn’t sell.

So we produced the Mythos Standard Game Set, a non-collectible version of the game with brand-new cards; it was meant to keep out game in print while evening out the revenue stream to avoid those huge ebbs and flows. Good theory.

Then the distributors told us that wanted just as many of these non-collectible cards as the collectible cards they’d been previously ordering. And stupid, stupid us, we listened to them. We printed MSGS at the obscene numbers suggested by the distributors. Meanwhile, as the cards ran off the printing presses, and we awaited their delivery, the CCG market started to cool. The distributors were looking more carefully at everything, and particularly at a set-card design like our new Standard Game Set. When the actual game arrived at our warehouse, they ordered in much lower numbers.

By the next year, I was the only person at Chaosium still receiving a paycheck, and it was regularly (and illegally) coming in one to two weeks late. The owners were forced to put money into the company just to keep the lights on and the front door unlocked. There was a huge palette of unsold  MSGS cards, more than six feet tall, out in our warehouse. And, I had a pile of about a half-dozen books near my desk that were ready to go, but which we couldn’t afford to print, because our cash flow had been destroyed. It was all sitting in those unsold (and ultimately unsellable) MSGS cards.

Afterward the company stumbled along for a few decades, but only as a shadow of its former self. The decision to produce a large print run pretty much killed them. (Since then, they’ve been bought out by a new team that is running the company better than ever before, but that’s a recent phenomenon, and it took a whole new investment of both talent and money.)

The $250,000 for a more speculative run of Wingspan wouldn’t have been the same as the million or so that got stupidly dumped into MSGS, but MSGS nonetheless offers an example of why you don’t print more.

What About Retailer Preorders?

Retailers are given the opportunity to preorder games, but that happens well after the games have been printed, when the manufacturer already has the games in stock and is making preparations to ship them to distributors. At that point, the distributors tend to request preorders from their retailers, and then they try and order that much (and a bit of a cushion) from the manufacturer: but if the manufacturer’s guess from months earlier was wrong, and they didn’t print enough, then the product gets allocated — which means that the distributors (and ultimately retailers) get a fraction of what they wanted. This actually doesn’t happen very often because as a rule of thumb a manufacturer wants to print twice what they’ll initially sell; if they don’t, they’re making life harder for themselves.

So, when a retailer says (for example) that they preordered 3,000 copies, insinuating that a manufacturer lied when they said they were only advised to print 10,000 copies, that’s at best ingenuous. Stonemaier made their casual query to distributors before August 2018 and choose their print run in August 2018; distributors didn’t solicit order from retailers until January 2019. Afterward, Stonemaier toted up all the distributors’ numbers and discovered that demand had outpaced supply. Their broker allocated the print run, and meanwhile, Stonemaier was back to the printers.

Do Manufacturers Like Scarcity?

Absolutely not: it’s horrible.

There is certainly an argument that Stonemaier has gotten a lot of publicity from the scarcity of Scythe and now Wingspan, and that’s likely driven some demand. But, there’s no way that increased demand generally offsets the costs of reprinting a game.

In general, in the board game industry (and in most publishing industries), running out of product is awful. That’s because for the first print run of a game, the printing costs will usually be returned through preorders. When you’re printing in China, you’re still tying up your money for six months or so, but at least you know you’ll get it back at the end (if you were prudent in your print run!).

Contrariwise, when you do a second print, you sell a much lower quantity during the first month of new sales, because you’re not selling to a big, pent-up demand, but instead an incremental month-by-month demand. This is why great games often go out of print and don’t return for years: it’s because the publisher is waiting for enough new pent-up demand (usually measured by unfulfilled orders to distributors) to make a print run without tying up their money for years at a time.

The other reason that publishers hate scarcity is economies of scale. Though there isn’t much difference in manufacturing costs between 10,000 units and 20,000 units, there’s a huge difference between 1,000 units and 10,000 units, and you’re likely to print fewer copies when you reprint; that ultimately means less return on the money you put into a reprint, straining the already tight economics of board game publishing.

Now Wingspan certainly wasn’t hurt by either of these factors: Stonemaier has clearly been able to sell through a few additional runs of between 5,000 and 15,000 copies, maintaining their economies of scale and their cashflow. But knowing you can do that is just as unpredictable as knowing that a game would sell a high quantity from the first print run, so artificially introducing scarcity is not likely to be a winning strategy.

What About This Big Amazon Prices?

Finally, some folks think that publishers are reaping those huge and ridiculous prices that you see on Amazon — such as the $100 price currently being asked for an out of stock Wingspan. And that’s totally not the case. Those prices are being charged by third-party sellers, and they’re usually set nowadays by computer programs which are constantly jockeying with each other to maximize their sales. (Sadly, I also don’t get the $380 currently being asked for my first edition Designers & Dragons.) The real answer is that no one gets that money in most cases: the computers are sitting around waiting for suckers, but they don’t usually sell until more products come on the market, causing them to lower prices.

In fact, the actual price that a manufacturer tends to get is lower than you might guess: they usually earn money on a game at a 60% discount from retail, paid to them by distributors, which is $22 in the case of Wingspan. But that’s $22 whether the game sells for $55 at your FLGS or for $100 from an unscrupulous Amazon seller. (The one place that a manufacturer like Stonemaier does get full retail is if they sell direct to their biggest fans, and Stonemaier did direct sell 5,000 preorders of Wingspan, also a pretty extraordinary amount, and one that obviously paid for the whole print run and then some if you do the math. But selling 50% of a print run direct is all but unknown, except in the case of Kickstarters. And, it’ll be a much smaller percentage of the whole by the time Stonemaier sells through to everyone who wants Wingspan … but still an important element for keeping a publisher’s books in the black.)


If someone asks, “Why didn’t that publisher print more?”, the answer usually is, “Because they don’t want to go out of business.” Board game have low margins, which means that if you over print by a little, you can easily wipe out your profits for a year. If you overprint by a lot, you can easily wipe out your company. Having totally accurate preorder numbers? Creating purposeful scarcity? Reaping the rewards from Amazon overprices? These are things that don’t happen in reality, and if a publisher tries, then that’s another thing likely to knock them right out of business.

* With Jamey sharing print costs with me, you might ask, “What’s your relationship with him?” Here it is: he sent me a free copy of Scythe for review a year and a half ago. I thought it was a great game design, though personally it’s longer and more complex than I tend to play. I’m also a big fan of Stonemaier’s “Between” games, as you can probably guess from my co-op case studies of Between Two Cities and Between Two Castles of Mad King Ludwig. But I bought my copy of Between Two Cities from the original Kickstarter, and I got my copy of Between Two Castles as a Christmas present from my brother. Which all goes to say: I have almost no relationship with Stonemaier.

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The original article can be found on the great Mechanics & Meeples