Why Recent Growth in the Board Game Market isn’t a Bubble

Anyone trying to go to a bar or coffee shop over the weekend may have been forced to wait longer in lines or found it harder to find places to sit because tables were full of people were sitting around tables playing board games. That’s because last Saturday was ‘International Tabletop Day,’ and tons of people came out to bars, coffee shops and other places to play games with friends or meet new people who enjoy board games. This idea was the brain-child of Wil Wheaton, who hosts the youtube show, ‘Tabletop’ where biweekly he brings his celebrity friends to play a wide array of games. His show has risen in popularity with the tide of new board game players over the last three years, evidenced in that it was able to, using indiegogo, raise almost one and a half million dollars to fund the 3rd season’s production. While the show has contributed immensely to the growing interest in board games, this trend has been apparent for some time.

While almost everyone who plays board games agrees that we’re currently in the golden age of gaming, there is a fair bit of anxiety that this recent growth is only a temporary bubble. The recent growth is worriedly compared by gamers to what was seen in the mid 90’s with comic books, where a huge amount of demand for comic books caused the prices for these books to vastly inflate over time due to collectability, and eventually forced out much of the non-speculative market. This led to a crash in 1996 that bankrupted Marvel, and the industry still hasn’t totally recovered. The comic book industry was only one out of several examples of recent speculation-driven crashes. Beanie babies are hardly talked about and very few people collect Pokémon cards anymore, to name a few examples. Speculation can drown markets, so the concern that board games are being speculated over isn’t unwarranted. In addition, there are some similarities between the board game and comic book markets, such as collectible editions of games and an industry trend of small print-runs, enough similarities to make the comparison a reasonable one. Both of these similarities can lead to over-speculation and a boom/bust cycle, but there are two main differences between board games and comic books that make this new growth different, and prevent any speculation from dominating the market.

The first difference is what defines a successful game, versus a successful comic book in the eyes of the publisher. By far, the game with the most sales from year to year in the board game market is ‘Monopoly.’ Everyone has played it, or at the very least heard about it. This is fairly uncommon in most markets, since it was published in 1953, a fact which is actually fairly incredible if you think about it. Imagine if Doctor Zhivago had, since being put on the best-seller list in 1958, continued to sell more copies than any other book year after year. That means that having a successful game guarantees some continued demand for that game for quite a long time, since old games aren’t necessarily rendered obsolete by newer ones. There have been some new classics that have come out more recently as well such as Settlers of Catan or Ticket to Ride (though their sales numbers are dwarfed by Monopoly’s). Unfortunately for publishers, there has been no guaranteed way to predict which games will become popular in the long-term, so most publishers have taken to shot gunning as many high-quality releases out in a year that they can to hopefully cash in on ‘the Monopoly effect.’ This is different from comic books because this inherent difficulty of prediction makes it hard to speculate which will be valuable in the future. You could in the 90s, with reasonable certainty, predict that early prints of the new superman comic would be very valuable because the LAST superman comic was so valuable. Not every rare game is worth large quantities of money because the rarity doesn’t necessarily coincide with the quality. While there is still some speculation that occurs when games go out of print, this occurs later and doesn’t prevent the highest quality games from being reprinted for purchase.

The second reason why speculation isn’t efficient in the board game market is due to the prevalence of what are called ‘math-trades.’ This arose as a solution to a problem as the number of games being published every year began to inflate. People started ending up with huge collections of games, some of which they really didn’t like, but knew that someone else would probably enjoy. Some of these trades would happen naturally, but a large swathe of people were still left with games they either gave to goodwill or let collect dust on their shelf. The market needed a way to perform a massive game-swap where everyone would end up better off. This type of swapping problem is done in a number of places, namely hospitals that are looking to match willing organ donors with recipients. While such a problem would normally be done piecewise through a brute-force method, this method is extremely lengthy. When performed on a normal-sized trade group (about 150 people) using a standard computer this calculation would take over a century to compute, so a shortcut was required to get some approximation of optimal match for a trade in a reasonable period of time. This shortcut (which you can read the details of here if you really like math,) allowed gamers to get access to games that had gone out of print without having to pay a speculator some absurd premium for the privilege. This ease of access to games further undermines the risk of a bubble because the idea of exclusivity that underlies speculation in these types of markets isn’t nearly as strong.

While board games are growing in popularity and that popularity may eventually wane, I don’t think there will be nearly the up and down cycles of similar markets though they do share some characteristics because these two factors make speculation very difficult. So the takeaways are, we should expect to see a long, healthy market for games and, as Wil Wheaton says, ‘play more games.’

7 Replies to “Why Recent Growth in the Board Game Market isn’t a Bubble”

  1. As a relatively successful boardgame designer, I strongly hope that you’re right, but I think there’s a flaw in your analysis, when you explain the burst of the comics bubble by the speculation. I think speculation was only a marginal explanation. For various cultural reasons, collecting and speculation on collectible items has never been popular in Europe like it is in the US, and as we had the same bubble burst with european comics, or may be even a more violent one, than you experienced in the US. The main explanation was simply lots of small companies, often run by hobbyists who knew little about business, all hurrying into the same growing market at the same time, which made for smaller print runs and lower margins. And what is happening now in the boardgame market looks very similar.

  2. Wow, thank you for commenting. I never knew about the European comic bubble, nor it’s eventual collapse. That’s an interesting perspective, because that either implies the cost of entry was extremely low, or the perceived payoff to owning a comics business was higher than the actual payoff. Out of curiosity, were the influx of new businesses coming as comic book stores or as publishers?

    Thank you for adding that: I’ll have to look into it a bit more and possibly re-evaluate my position. By the way, I really like the games of yours I’ve played (Red Planet and Citadels.)

    • I’ve never been really into comics, but many of my friends were, and I think you hit the point in your reply – the cost of entry was extremely low, as it is now with boardgames.
      If you compare boardgames with videogames, the differences are impressive. The development costs and times are a hundred times lower. The break-even point is in the thousands, not the millions. The margins (so far) are much higher. Hacking is non existent. No wonder lots of people, including some who were fired from computer games company, start their small boardgame business. We have a proverbial expression in France for that kind of business “j’ai vu de la lumière, je suis rentré” – “I just came in because I saw the light”.

  3. As another game designer, but one not even remotely as famous as Bruno :), I think the current trend is creating a lot of pressure on the field. If anything, the large number of smaller companies and kickstarter game projects is creating such a surplus of games on the market that it is a very crowded field and a lot of hype that would have gone to larger publishers games is instead going to many of these kickstarter projects, which are often funding with 1-2K backers. It is becoming like the mobile app market, where so many games come out it is hard for anything to stick out. Many of the larger publishers focus on one successful line and don’t do a lot of new products. Not sure where the trend is going, but the consolidation at the upper end in an industry is usually not a great sign and the sheer number of games and kickstarters coming out does not seem like it will be sustainable for too much longer.

    • Wow, we’re getting a bunch of game designers in here, this is great (well done on dice masters, by the way!)

      I will say as a counterpoint though that the process you’re describing is very much a natural economic process of a market moving towards perfect equilibrium. Usually there’s some sort of overshoot at first, where business owners decide to open shop based on the previous successes of firms before them, until market forces forces some firms to exit, and moves everything back towards stability. It’s only a problem when there’s some other factor that drives an unusually high number of businesses into the market (profits from the speculation market for comics in the states) such that the reality of the situation doesn’t match the perception and a huge number of businesses are forced to close all at once. Of course, Bruno’s example from before throws a bit of a wrench in that idea, but I want to do a bit of research on what happened because markets don’t usually crash without some unsustainable process going on in the background. I do think you’re right though, the sheer number of games coming from kickstarter do act as a sort of market shock, where small developers can quickly and easily get their projects seen.

      In addition, I think you can look at the consolidation as a desperate move from the top, and those consolidations have been very surprising, but I think there’s another truth there too. In a market where there’s so many games with so much hype, consolidation makes a ton of sense because it allows firms to take advantage of economies of scale. If a single larger firm can lower their prices to the point that small print-runs aren’t able to match their prices, then the importance of controlling all the limelight isn’t the end-all be-all of success in the industry. Don’t get me wrong, I wouldn’t buy a bad game because the good one cost me five dollars more, but if I couldn’t tell which one I wanted I very well might decide to buy the cheaper one. It may not force the little guy out of competition, but it takes at least a little of the pressure off to create the biggest, greatest game the world has ever seen every year for the bigger firms.

      Thank you guys for coming to comment by the way, it’s always great to get industry professionals in here to talk about this stuff.

  4. I was triggered to write a comment by the words ‘perfect equilibrium’. (I’m a game designer wannabe – I hope that that allows me to join the discussion 🙂 )

    A bit confused here. You probably aren’t talking about a Nash equilibrium, as that is a concept from – nomen est omen – game theory, with typically only two players. The game market is characterised by a large number of players – producers and consumers – so I guess that you’re talking about a situation where supply and demand are in balance, the concept about general economics.

    The problem with that concept, though, is that the market conditions for that equilibrium are not met in the real-life market for boardgames – and more importantly, it doesn’t say anything about bubbles.
    For one, the general theory is about homogeneous goods, like sugar or dollars. With these goods, there is no difference between two goods. One pound of sugar is similar to another pound of sugar. Likewise, consumers have no preference for one dollar bill over another one. To all intents and purposes these goods are interchangeable.
    Boardgames, though, differ very much from each other. Even to the point that people devote their life to just one game, to the exclusion of others. A die-hard Diplomacy or Chess fan will generally not be as enthusiastic to join a game of Monopoly or Munchkin. Similarly, the cost of producing one game differs from that of another game.
    More importantly, though, the general Adam Smith theory of supply and demand does not regard developments in time. Bubbles, specifically. At the top of the tulipmania (one of the first recorded economic bubbles), demand for tulip bulbs was vast, while supply was limited. And so, in par with the general theory, prices rose high. But the general theory did not predict that suddenly, all demand would get out of the market, leading to a price crash. The general theory just notes that there is a demand and a supply, but doesn’t look at the underlying motives of consumers and producers.

    If we want to analyse the games market, one important phenomenon to take into account is the internet, I think. Internet sales are driving games stores out of existence (those that survive, thrive mainly on Magic). At the same time it facilitates crowdfunding platforms like Kickstarter and Indiegogo. These platforms allow anyone with an idea and some persistence to put their (often poorly developed) game idea on the market, avoiding the filter of game publishing companies. An amount of gaming dollars from the public now go to kickstarter games instead of publishing companies, which puts stress on the latter. But in the future, the public may become warier of the quality of these kickstarter games. An often heard comment for published KS games is that it would have been better if a game developer had looked at it. So perhaps the crowdfunding model needs a revision if it is to survive.
    Internet also allows for math trades, creating a more dynamic market for second hand games.

    Internet shops, crowdfunding platforms, math trades, but likewise sites like BoardGameGeek, which create greater market transparency by giving lots of information about games, have changed and are still changing the games market. The rise of computers has also allowed for a better quality of games (component- and illustration-wise) and lower costs for producers. 3D-printing technology and the combination of boardgames with smartphones (like in Alchemists) will take this even further.

    But a bubble? I don’t know. Consumer demand could disappear as quickly as it has risen after Settlers hit the American shores, because of shifts in consumer preferences and culture. But traditionally when economists speak about a bubble, they refer to the phenomenon where people buy goods because they think that the price of them will rise. Except in a few segmented markets (hello Magic: the Gathering), I don’t think that this is the case in the games market. People buy games because they want to play and keep those games, not because they hope to sell them for more money.

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