The big news that hit the game industry last week was the announcement by Asmodee that the company will become Asmodee North America and will offer Asmodee, Days of Wonder and Fantasy Flight Games products under the new structure (see "Asmodee, Fantasy Flight, Days of Wonder Consolidate"). The reason for the change as given by new CEO Christian Petersen:
"The marketplace has long been distorted by providing one-size-fits-all sales terms to every retail account, regardless of its channel of sale. The growth in demand for games over the last decade, in our view, has been fueled not only by fantastic product, but by the support of specialty retailers who incubate personal connections between players, facilitate tournaments and leagues, provide instant product availability, and increasingly provide a 'third place' that is instrumental for so many gamers to enjoy and discover our products. The retailer cost of providing such channel services is significant, and so we're now making policy changes to ensure that the sales terms provided to those retailers, relative to other channels, are positively reflective of the value they add to our distribution chain."
If everything goes according to Asmodee NA's expectations, all of the changes planned by the "new" company should go into effect by April 1st and there are some fairly major ones, most of which will affect the channels of distribution. However, one will have significant impact on the consumer.
Changes affecting the channel.
The three companies will remain independent in terms of product, however distribution will consolidate, starting January 1st. This means that Alliance will no longer have exclusive distribution rights to the Days of Wonder line of products, which include Ticket to Ride and Small World. At the same time, Asmodee NA will reduce its distribution partners to 5: Alliance Distribution, ACD, PHD, GTS and Southern Hobby. This means that distributors such as Aladdin, E-figures and Mad Al's, among others, will no longer stock the Asmodee NA product lines and retailers wanting to carry them will have to have an account with one of the five authorized distributors or buy direct.
A second major change affecting the channel is, instead of raising the price on the combined company's products, discounts on products across the line will drop to 45%, reducing the margin of gross profit anywhere from 3 to 5 %. Much as with WOTC's reduction in margin earlier this year, this reduction comes straight out of the gross margin of distributors and retailers. It remains to be seen what Asmodee NA does with the extra percentage.
Changes affecting the consumer.
One major change in Asmodee NA's operations that will directly affect the consumer is a new requirement that any retailer wanting to sell Asmodee NA's products must sign an independent retailer agreement before the retailer can purchase any Asmodee NA products. There are several items in this agreement but the main one that appears to affect consumers is that retailers, unless they have a separate agreement with Asmodee NA, can no longer sell any Asmodee NA products online. Only retailers that have an agreement with Asmodee NA to sell online will be able to do so and I would imagine this agreement will have some restrictions on MAP (minimum advertised pricing). This means, for example, a lot fewer online sources selling FFG's Star Wars Imperial Assault for $65, 35% off the MSRP.
These are the major changes planned by Asmodee NA. What actually happens we will know after April 1st.
The opinions expressed in this column are solely those of the writer, and do not necessarily reflect the views of the editorial staff of ICv2.com.
