J. Brian Cobos of Phoenix Games in Mukilteo, Washington saw the news of Days of Wonder awarding exclusive distribution rights to Diamond-Alliance (see “Days of Wonder Goes Exclusive”) and feels the decision will make DoW games less accessible to end users:

I would like to address my comments to Eric Hautemont and Mark Kaufman directly.

Sirs, I would like to preface my comments with the statement that I have yet to play one of your big box games that I have not enjoyed immensely.  You have something special going on in the Days Of Wonder offices and I look forward to each new release.

That said, with the announcement of this exclusive Alliance deal, you have instantly made your games less accessible to your end users in two ways- availability and price.

Already, we have heard from retailers who have decided to drop your product line because of their desire to not work with Alliance.  While this may prove to be an emotional reaction that, when evaluated under the microscope of good business decisions, proves to have minimal impact overall, it still manifests a hesitation in product recommendations from those who continue on with you.  Fewer recommendations translate to fewer sales.

When the WizKids deal was announced last year, there were many who voiced similar concerns and opted to no longer carry the WizKids product lines.  WizKids has claimed stronger sales on HeroClix because of the deal, and to some extent that is an accurate assessment.  However, from my vantage point in my corner of the world it has been larger sales to fewer customers, as people tried to chase the current promo piece.  In my experience, it has not been based on a broadening of their market and it has come at the expense of their other product lines, which have faltered tremendously.  It is success, but not a lasting success.  While your products do not fall into the collectable market category, I fear that some of your product lines may also suffer the same fate, even as you claim stronger sales on a shrinking mix of SKUs.

For those of us who will continue to carry your products, understand that the price I currently receive on your products from my preferred distributor is better by far than what I can achieve via Alliance, even at their best discounted rate.  With this announcement, you've made my cost on your products skyrocket.  Margins on your games were not wonderful to begin with, but I was able to stay within MSRP up until this point.  With this price increase, and in order to maintain a healthy business model for my store, prices on your games will go up, pushing them to a higher price point than their competitors on my shelves.  While we're still evaluating pricing, I'm not afraid to say that favorites such as Ticket to Ride could go up to as much as $59.99, to offset lower price points on some of your slower moving titles.  Shareholders and investors care less about volume than they do about margin and profitability; it's not how much you make but how much you keep that matters.

I'm sure I won't be alone in raising prices on your games at a time when more families are looking to less expensive entertainment alternatives, such as board games.  Maybe some won't be so bold as to increase by as much as $10.  But when multiplied nationwide, ANY price increases could have a real chilling effect on sales for your company.  I hope this figured into your calculations and someone much smarter than I determined it would have minimal impact.

You and I will make roughly the same amount of money per game as before the deal, Alliance makes substantially more in higher sales volume from new and existing customers and your consumers and mine pay significantly more for their Days of Wonder games.

How does this make for a better marketplace?

The opinions expressed in this Talk Back article are solely those of the writer, and do not necessarily reflect the views of the editorial staff of ICv2.com.