Press Release

Still Pumped Up, But Thinner in the Middle by James Mishler and John Jackson Miller

2001 dawned on the gaming industry with a fair amount of promise. The prior year had been neither a good year nor a poor year, as the losses from the deflation of the trading-card game market were made up, for the most part, by the growth in the role-playing game and miniatures game categories.

A magical year in cards

Trading-card games sales shrank more than 12% overall in 2001. Pokemon, by the beginning of the year, devolved into one of "those other games" that sat next to Magic: The Gathering. The winner overall in the trading-card game category was Magic, which grew 15% in average monthly sales over 2000 numbers. By comparison, Wizard's other games, Harry Potter and the Showdown Sports lines, were barely a blip on the radar.

The other success story in the trading-card game category was Warlord, the new offering from Alderac. Warlord had a strong premiere before tapering off about the same time Legend of the Five Rings Gold Edition premiered, also from Alderac. L5R, like Warlord, experienced a drop in sales at the end of the year. This is only partly attributable to self-competition within Alderac's customer base.

Decipher's sales had been trailing off. Star Wars had devolved from a mass-market to a niche-market game, so much so that Young Jedi virtually disappeared and the Jedi Knights premiere was a non-event. Lord of the Rings premiered in the #6 slot in November and has not looked back since; in January 2002, it unseated Magic, taking the #1 slot.

The Dragon That Roared

The role-playing games category grew by nearly 15%. Much of this growth is directly attributable to the new edition of Dungeons Fr Dragons. Though it did not hold on to the amazing sales levels experienced right after the release of the new edition, D&D continued nonetheless to maintain levels high above previous year's sales, especially when compared to Advanced D&D sales, which had hovered around 22 units per month in early 2000.

The growth of the role-playing game category is due in no small part to the sales of d20 System products, which are compatible with D&:D, through use of the d20 License from Wizards of the Coast. The increase in role-playing game sales for White Wolf and Alderac is directly attributable to this, with their Sword & Sorcery/Necromancer Games and Adventure Keep lines respectively. The d20 glut has yet to impact d20 sales negatively, but time will tell.

Collectible miniatures?

Designers have been trying to develop ways to apply the collectible format to other games since Magic was knee high to a pixie. The first viable alternative to trading-card games to appear was Mage Knight, a collectible miniatures game. Like Magic before it, this new genre of game cannibalized customers from the genres from which it grew and, at the same time, brought in entirely new customers. Even if the entire drop in trading-card game sales and miniature game sales were attributable to Mage Knight (which it certainly is not), that would account for only about two-thirds of the sales that Mage Knight made over the last year.

Mage Knight proves, as Magic did before, that sales in this industry are not a zero-sum matter. A new, innovative game can generate new customers, even if it does not break out in the mass market. The trick for other manufacturers and retailerers is to migrate new customers brought in through Mage Knight to other games in addition to Mage Knight.

Getting Lean and Mean

Though the industry held its own overall this year, not all categories in the industry survived unscathed. The distribution division took some hard hits, with the collapse of Zocchi Distributing and the closing of Wargames West being only the most visible reaction to industry trends.

The most difficult challenge facing distribution (and retail) is shrinking margins, where manufacturers, afraid to increase suggested retail prices, instead lower their wholesale discounts. Distributors, no longer able to eat the loss, pass the increase on to the retailer who generally cannot pass the loss of margin on to the consumer. Distributors thus have to choose between stocking a low-margin item they might not sell or not carrying a product at all. Either way, distribution is feeling the squeeze, which as the history of the comics industry shows, bodes not well for manufacturers, retailers, or consumers.

The Gaming Industry at a Glance:

Total 2000 retail sales: $237-344 million

Average price of role-playing game starter sets: Around $25

Average price of role-playing game modules: Around $10

Average price of trading-card game starter packs: Around $9:85

Average price of trading-card game booster packs: Around $2.95

Average price of wargames and strategy games: Around $30

Average price of miniature-game starter sets:

Around $60 Average price of miniature-game blister packs:

Around $7 Average price of collectible miniature-game boosters:

Around $7 Number of game manufacturers: 180+

Number of gaming stores: 3,000-5,000

Top-selling current role-playing game system: Dungeons & Dragons (Wizards of the Coast)

Top-selling current trading-card game system: Lord of the Rings (Decipher)

Top-selling current miniatures gaming system: Warhammer 40,000 (Games Workshop)

Top-selling current collectible miniatures game: Mage Knight Rebellion (WizKids)