Monday, October 29, 2007

Yeah Mayfair!

Mayfair games, a game manufacturer that makes games including Settlers of Catan, Empire Builder and Power Lunch, has just announced a plan to support minimum pricing on their products.

From ICv2 News:

Mayfair Games Announces Minimum Prices
For Retailers, Distributors
October 28, 2007

Mayfair Games has become the first major hobby game company to announce a system of price floors in response to the recent Supreme Court decision (see "Supreme Court Drops Ban on Vertical Pricing"). In a communication to its customers, Mayfair informed them that retail prices below 20% off MSRP or wholesale prices below 50% off MSRP would not be tolerated and that customers that violate those terms "shall be subject to sanctions," including being cut off.

Mayfair explained in the announcement that it feels discounting is "unnecessary and counter-productive for everyone in the mid-to-long term." The company stressed that it was seeking for its distributors and retailers to have adequate profit margins. "It is far healthier for us, our distributors, and our retailers to derive a healthy profit from the sale of our games than it is for us to see them dumped into the marketplace," the announcement said.

One of the problems brick & mortar game stores have faced in the last 5 years or so is the increasing availability of games on-line for deeply discounted prices. I have mentioned discounting on several occasions including here and here. A brick & mortar store of any kind has overhead, and that overhead has to be paid for with the profits from the sales of the products within it. The more items are discounted, the harder it becomes to pay for that overhead. On the other hand, consumers like getting stuff cheap. I like getting stuff cheap. Who doesn't want to save money? So, it is hard to blame people for buying games on-line for 40% - 50% less than what I am selling them for in my store. But, when game stores can't compete and have to close down, the consumer who isn't buying from those game stores have to take some of the responsibility. See, those on-line stores typically don't have overhead. Some are just gamers who set up an internet store so they can get wholesale prices on games for themselves, and then they offload the rest of their purchases with very little mark-up, just so they get the rest of their money back. That's how they can give the stuff away without a profit - because they don't need one, unlike we brick & mortars who need to pay rent, utilities, insurance, staff, etc.

Now FINALLY a game manufacturer is taking some responsibility. In the past, Wizkids and Wizards of the Coast claimed they would manage these discounters and even stop selling to them, however when it came to enacting those policies it never panned out - they claimed legal issues. But now, with the Supreme Court's ruling, it seems that it might be possible for manufactures like Mayfair to step up and support the businesses that try to make a living selling their products. Time will tell if Mayfair can actually carry out this new policy, or if it becomes hot-air like the others. Either way, I admire them for going out on a limb and doing this! I hope they can set an example for the industry that could eventually lead to better days for brick & m0rtar game retailers.

1 comment:

ManoDogs said...

Talk about synchronicity! we are doing an interview with Hyrum Savage of OWC - the guys who bought Mayfair's classic horror game, Chill! It should be available tomorrow and I will post all about it over to The Rundown, but that's pretty cool that you mentioned it on the same day (or close)!

I thought Mayfair had gotten out of the gaming biz and was back to just doing trains and stuff now. It's good to see they're still at it. They have a long history of fairness to the market - it's what drove them to the brink of bankruptcy... well, technically, TSR (now WotC) did - and unfairly so, I'll add.