Although retailers remain generally healthy (and some were definitely up), for the first time during this adjustment period, which has been ongoing for a year or more, we were hearing a few signs of financial strain, with inventory build-up and flat to down sales the culprit.
Excess inventory at retailer required discounting, which hit margins. Inventory build-up was not limited to the retail level. Publishers whose supply chains became faster at the same time as sales reverted to pre-Covid patterns found themselves with inventory piling up in their warehouses as well. For some products, that just meant it would take longer to sell down the inventory, tying up cash and resources, but for others, on which demand was ephemeral, product had to be discounted to move it out, hitting margins and cash flow.
Beyond the industry-specific post-Covid adjustments that were affecting trends, general economic factors, especially inflation, were also cited as pressuring sales. Despite the challenges, the general vibe for sales this year was cautious optimism.
This article is a summary of an article from ICv2 Pro, and Internal Correspondence #105. For the complete article, see "In Depth – Hobby Game Sales Flat to Down in Spring 2024," or the complete issue of Internal Correspondence #105, on our Pro site (click here).
