We wanted to start out with getting up to date on what Skybound has been doing this year. How many game releases did you have, in what categories, and what's been going on with your backlist this year? Bring us up to date on 2022.
Garima Sharma: As you know, the pandemic was devastatingly hard for all of us across the world, but also a tough time for the industry in trying to figure out so many unexpected logistical issues that happened. We began 2022 with some hard decisions, some hard reckoning, figuring out what pivots were needed in the business. We've spent roughly the last, I would say, eight, nine months in gestation, building our pipeline for 2023, figuring out some of our older titles, what our catalog looks like, what our direction is going forward.
We've had kind of a release this year. Skybound ran a Kickstarter called Extra Fabulous. It was a webcomic Kickstarter; we partnered with that editorial team for the first time to launch a book plus party game Kickstarter, and it did really well. The game comes to retail in, I believe, March or April of next year, but fans did get a first look at the game, and we did about $470,000 on the Kickstarter.
I would say 2022 has been more of hey, let's put our head down, figure out what 2023 looks like, put that slate together, and enter the new year with all our guns blazing.
Today, we finished another webcomic Kickstarter. It's the number one webcomic Kickstarter of all time, and it just ended a couple of hours ago. It's for a project called Ava's Demon.
Will the graphic novels you're producing from webcomics be released to trade?
They will be.
What's the timetable on that? After the backers?
I think it's honestly a couple of years after that, because all of these are run by an editorial team, but they have to go through all the fulfillment, then take it to trade, etc. I believe Ava's Demon 1, we did a Kickstarter with the same creator before. That should be coming out in retail. Don't hold me to these dates, because I'm not so sure of their schedule.
What we were familiar with from Skybound's game business was the card game business, with Superfight being your flagship title and other card games in that format, and then your Druid City line. Can you bring us up to date on where those two lines of business are?
As you probably know, we parted ways with Druid City earlier this year towards the end of Q1. It was absolutely an amicable parting of ways. We've loved everything we've created with Druid City, but the pandemic was rough, as it was for everybody.
We realized at that point that as much as we love the more intense, or these larger gameplay games with miniatures, or roleplaying games, it isn't necessarily our forte. It was hard to sustain them.
I was talking to somebody a little while ago and saying it's like you're in a relationship, and at some point, you realize you both want different things in life. It doesn't mean that you both don't like each other or things are not working out. It's just that you want different things.
That's what happened. We decided to focus more on the mass market, mass games, kids IP. Frankly, if you're familiar with Skybound's structure, we have all these different lines of businesses. Skybound is an entertainment studio with different lines.
There's video games, there's merchandise and tabletop, there's film and TV, audio, podcast. For us, we also wanted to align ourselves with the bigger business, where a lot of it could be hey, if there is an IP that comes from film and TV, let's take that and develop it into games that can go in the mass market.
We are focused on party games, kids and family games. We are also aligning ourselves with creating more games based on our comics IP.
Comics is the bedrock of Skybound. As you know, our success in The Walking Dead IP and Invincible recently with the Amazon Prime show has been so fantastic that we also want to do a lot more of that. Directionally, that's where we are headed.
It sounds like you're pivoting away from more hobby-oriented games and toward more mass games and toward your own IP. Where does that put a game like your licensed The Walking Dead game with Mantic Games? Are you looking to do that kind of thing more in house in the future? Or is that too hobby and you still want to do the hobby stuff as licensed products and just do mass versions?
That's the direction. We want our community to have those games. It's just in house, we are not building that capability.
You said you're also in charge of your direct-to-consumer efforts and Kickstarters. Can you give us a feel for what kinds of games, or what percentage of your games you're going to do through Kickstarter initially and what things might go directly to trade?
Next year specifically, 80 percent of our catalog could be direct to consumer⁄direct to retail, and maybe 20 percent as Kickstarters. Over time, I'd like the balance to be 40 percent Kickstarter and 60 percent direct to retail.
Also, the market is changing. Earlier, you would talk to big box, and they would sometimes pick up games just on merit or if they enjoyed gameplay.
Now increasingly, we hear this feedback that says, hey, does this game already has a sales velocity or success story on Kickstarter, or does it have the same success story in direct-to-consumer? Even the bigger players want to bet on games that have shown certain success.
Eventually, maybe Kickstarter ends up being more important, but for now, the split for us next year is 80/20 in favor of direct to consumer/direct to retail.
Are you going to eventually release all the products you've put out on Kickstarter to trade?
Yes, but in a different version. We try and stay away from taking the same version and taking it to retail, but yes, essentially.
You said you're focused more on mass games. What is the role of the hobby channel in your future plans?
We have some sort of… It's hard to describe, because they're borderline mass games but could also be good for hobby. We do have a couple of hobby games for next year, but I would say they are light hobby, more for 30 or 45-minute gameplay, as opposed to a four or five-hour gameplay kind of games.
We do service hobby. Some of our games, even Superfight and Pitchstorm, continue to do well in hobby, so it's not like it's a channel that's completely off limits for us. I do think that some of our games could appeal more to hobby, but most of them might just end up being more direct to consumer or mass heavy games.
What's your distribution right now? What distributors are you dealing with, or how do you sell to the channel?
We go through PSI for the U.S. and we use Lucky Duck for our international games.
What are you seeing in terms of the consumer market? We’re especially interested in what you're hearing back from the chains, because they have instant POS data easily obtainable. I've been hearing the chains over the fall have been canceling orders from game companies. Are you seeing any of that, and are they pushing back on inventory?
We haven't seen cancellations thankfully, but the feedback that we are constantly getting is for games coming up, they want the MSRP to be lower. Superfight was a $30 party game. Party games of that size or that genre went to $25, and now we are hearing they need to be between $15 and $20.
MSRP is decreasing, but on the other hand, COGS are increasing. Manufacturing costs from China are increasing. Paper is expensive. Other things are expensive. We feel that pinch a lot, the shrinking difference between COGS and then selling to wholesale or selling to mass, and then also decreasing MSRP.
The other thing, this is more my observation, I think shelf real estate is going to become more and more important, both in homes personally and in brick-and-mortar stores.
The party games used to be horizontal. Now they're all vertical, because that saves the game per square inch model. I think also in homes, there's only so many big games that you can keep.
During the pandemic, people stocked up on a lot of things, but I think as that space fills up, people will start to look for smaller games (smaller sized games, not necessarily smaller gameplay games). I think that'll be interesting.
We are trying to standardize our game box sizes for certain kinds of games, but I'll be curious to see what that looks like on shelves over the next 12 to 18 months.
Just to add something else. I don't know why this is, but when Amazon Prime Day happened a couple of months ago, I was stunned by how much the price cuts were on even the bigger titles. It was, I believe, one of the biggest board game category sales, but with some games discounted up to 50 percent. It's the first time I saw such deep discounts. I don't know the triggers for it, but I thought it was super interesting.
Tell us about your 2023 slate. What have you got coming up and what do you think your biggest releases are going to be?
We've got almost eight games coming out next year. It's our most aggressive slate to date, especially since the business started with Superfight. We haven't announced any of our games officially, so I'm going to stay away from that, but happy to share those over the next couple of months.
Next year is the 20th year anniversary of The Walking Dead comic, also the 20th year anniversary of the Invincible comic. Invincible Season 2 on Amazon is eagerly awaited. We've got some very, very interesting titles for interesting games coming up with some of our licensing partners.
We've also got about six new titles that we've developed in house. A couple of them are definitely more mass party game titles. There's a couple of, like I was saying, borderline hobby titles that we are very excited about.
There is Boo-ty Call, the game we've released on the Extra Fabulous Kickstarter. That will be releasing in about a week. This hasn't been announced on socials yet. You're the first to know.
We are launching a very, very small game called Wine Tasting. The bigger game called Whine Night is actually going to launch in February of next year, but we wanted to give our community a taste of the game in a smaller pack, so we are calling it Wine Tasting, and it's releasing for the holidays. That releases on Thanksgiving Day.
That unofficially kicks off our 2023 slate. We've got pretty much a release every month starting February all the way to Gen Con.
You said you're developing games in house. Who are the designers you're working with?
It's Ben Kepner, our in-house designer, and Dan Stong. We also work with a couple of designers externally, but all the games next year have been developed in house. For Wine Night, we've partnered with a female game designer called Jennifer. It's her first ever game. Very proud of that, actually. The game is designed by a female game designer, and obviously, with support from Ben and Dan. The graphic design for the game box is also done by a female designer. Very excited for that one coming out in February.
There are a couple other designers that we've partnered with for our Gen Con releases, but we'll share those details in due time.
Anything else you would like to share with our readers, primarily is retailers in the hobby game and comic stores?
We have a lot of very exciting stuff coming up. Next year is a lot about homegrown titles, but over the next 12 to 18 months, we are getting some pretty significant licenses and developing games for them.
The thing we pride ourselves on is we don't take an existing game again and again slap an IP on it. We generally have created some amazing gameplay. It will be exciting.
