Thursday, July 27, 2006

I was writing about "too many games", which I'll post in a while, when the news surfaced that Eagle Games had ceased operations (no chance of revival, though curiously, their Web store will continue business). There was much speculation on Boardgamegeek once the newspaper notice of sale of physical and intellectual assets was seen. Glenn Drover, Eagle's owner, then stated that "Due to a sudden and severe downturn last year in the demand for poker products, Eagle Games, Inc. became insolvent and finally ceased operations on May 31, 2006."

Even after this, some BGG people continued to speculate that poor game quality had done in Eagle. I think we ought to take the owner largely at his word: he put a lot of money into Poker products, and suddenly demand disappeared. I recall Eagle selling a Texas Hold 'Em computer game a couple years ago. Perhaps this game initially made a lot of money. Perhaps Eagle produced large quantities of the game and additional computer titles, then found that few were buying them. When they could not pay those production costs, they'd be forced out of business.

I can imagine that there are now free or advertiser-supported computer programs that do the same thing the Eagle programs did. Once the pool of people who would buy the Eagle products in stores (not knowing about the free stuff) was played out, who was there to buy it? I'm not into poker, but I understand the poker programs are a dime a dozen.

The games business may have been doing OK, but could not provide the money to pay the poker production costs. I recall talking with a publisher a couple years ago who wondered how Eagle could make money selling those big box, plastic-pieces games. Hasbro can do that, but they have vast distribution and can benefit from huge economies of scale in production. Someone (IIRC Glenn himself, but I could be wrong) told me then that Eagle printed 10,000-40,000 copies of a game. This is considerably higher than most game production, as far as I can gather. But they did get into distribution channels that most game companies only dream of.

And Eagle, in later years, went with a formula that only Fantasy Flight also pursues, as far as I can see. They looked for tie-ins with books and movies. While I cannot understand any reason why a game based on a book or movie is any more likely to be a good game than one that is not, the public at large doesn't look at things this way. So if you want to sell lots of copies in places where non-hobby-gamers might buy games, you look for those tie-ins to help persuade the buyers who never heard of BGG to spend $40-60. In a sense, what a thousand people at BGG think of the game doesn't matter much, when you're trying to sell 10 or 20 thousand copies or more. People buy the game because of the tie-in and the good looks, not because it's known to be a good game. Even BGGers seem to anticipate the release of Pirates the boardgame and Age of Empires III the boardgame, not knowing whether they will be good games or not.

So Eagle's business model might be OK. Whether the game business model was adequate or not, it was an overinvestment in poker that did them in.

Let me tell you about another case where a poor decision, having nothing to do with boardgames (or even with games at all?) did in a well-known company. In 1982 Heritage Models produced eight "microgames" under the "Dwarfstar" label. Heritage was primarily a producer of miniature figures, owned (IIRC) by the well-known Duke Seifried. Two of those Dwarfstar games were designed by people outside the company, one of them me (Dragon Rage was the game). Consequently I heard the story when Heritage closed its doors.

The way I heard it, the owner and his banker got into a "spitting contest" (not literally spitting, of course) and this finally resulted in the banker calling in the loan. Although the Microgames sold well (print run was 10,000 copies each, not so much then but very large now), there was no way they could mange to pay off the loan. So that was the end of the company (and I was never paid a cent for designing the game). The "plates" used to produce the games remained in the hands of the (unpaid) printer, and ultimately disappeared.

This was not a bad *business* decision, it was a bad personal decision, but the company died as a result. Someone who did not hear the story might speculate that the failure of the games had led to the company's failure, but nothing could be further from the truth.

(My memory of this is 20-some years old now, so I hope I haven't butchered it; and of course, I can only repeat what I was told by my contacts in the company.)

In Eagle's case, they made a business decision to "bet the farm" on one product line, the result was the opposite of what they expected, and they're out of business. Unfortunately for all boardgamers. The ones who might benefit the most will be Fantasy Flight, as there will be less competition for those tie-ins.

Lew Pulsipher

No comments: