The Cardboard Hoard: Some Thoughts on Industry Consolidation; or, All Our Games Are Belong To Asmodee
With most of my posts, I am speaking as an opinionated, enthusiastic, and fairly well-informed hobbyist. However, as a career financial journalist who has been writing about the U.S. equities market for over a decade, I can confidently say, about this particular topic, my insight is far more valuable than any enthusiastic and opinionated guesswork. And my opinion on this matter is as simple as it is pessimistic:
Asmodee's recent string of acquisitions is wholly bad for both the larger board game industry and the consumer. The only entity this benefits, other than Asmodee itself, is French investment company Eurazeo, the private equity company that owns a 79.4% stake in Asmodee.
First of all, decreased competition leads to increased prices for the consumer. This is why antitrust laws exist. Of course, the consumer is free to boycott a publisher that raises prices, but that becomes a lot more difficult when that publisher controls Asmodee, Ystari, Space Cowboys, Fantasy Flight, Days of Wonder, Catan Studio, and is close to a deal to acquire F2Z Entertainment -- a conglomerate that owns Z-Man Games, Filosofia Editions, Pretzel Games, and just itself acquired Plaid Hat Games.
Furthermore, my increased price hypothesis isn't even a theoretical threat. Asmodee already changed its pricing policy this year, a shift that went into effect back in April. The policy change not only effectively raised prices, but limited U.S. distribution to five distributors, as well as limiting sales of Asmodee products to authorized retailers. But most importantly, it eliminated online sales for stores that have a brick-and-mortar presence. This change was somehow managed under the guise of helping brick-and-mortar stores. Now, with Asmodee even larger, the retailers must all hold their breath and pray Asmodee "does not alter the deal any further."
Second, decreased competition also significantly and negatively affects both quality and customer service. Without many other competitors for consumers to switch their business to, Asmodee will be left with no financial reason to go "above and beyond" and provide higher quality components or give excellent customer service. It wouldn't surprise me to see more quality control issues and a tougher time getting replacements for anything that was defective (Did you buy it at an authorized retailer? Was it within the last 90 days? Do you have the receipt? etc.). If you don't believe this argument, go talk to someone that is a Comcast customer and then report back to me.
Third, consolidation strangles creativity and originality, as larger companies make safer bets with their investments. The most obvious parallel here is the movie industry, which churns out sequels, prequels, reboots, and re-imaginings of existing well-known properties instead of pushing boundaries with innovative, untested ideas, which aren't worth the risk proposition. In a similar fashion, this GenCon, Asmodee's Fantasy Flight announced Game of Thrones: The Iron Throne, which is based on the Cosmic Encounter game system, while Pretzel Games (whose parent company F2Z acquired Plaid Hat, the maker of Dead of Winter, and is in talks to be acquired by Asmodee) announced Flick 'em Up!: Dead of Winter. This is a lot of energy being spent on intellectual property reskinning. How much is at the expense of announcing and promoting original material?
Fantasy Flight, by the way, is no stranger to intellectual property reskins, with Star Wars: Imperial Assault being an updated Descent, and Star Wars: X-Wing being an updated Wings of War. While I am not knocking these games, I am concerned we could be shifting to a market where new versions of existing games, in addition to expansions for existing games, will be the majority of new releases.
Along these same lines of thinking, Asmodee could also halt, delay, heavily edit, or otherwise intervene if a title at one of its brands is too similar -- thematically or mechanically -- to a different game at another. And in cases like this, it is not hard to imagine that the game with either the most famous designer or the hottest intellectual property would trump the other game, regardless of game quality. This, of course, is a more speculative (and as-of-yet unfounded) concern, as to my knowledge, Asmodee has not interfered with any of its brands.
Finally, let me rebut one popular argument I have seen in favor of industry consolidation -- the "rising tide" argument. This argument states that as Asmodee's goal is to grow its revenue, it will use its larger presence in the market to grow the hobby as a whole, which will help all publishers, designers, etc. in the industry. While I do agree with the sentiment of this argument, I fundamentally disagree that Asmodee's attempts to grow the market will succeed, and this situation leaves the entire industry contingent on their business acumen and self-serving interests.
Asmodee's success is now paramount because it controls almost every modern gateway game (with the notable exception Rio Grande's Dominion). Their umbrella includes Ticket to Ride, Catan, Pandemic, Carcassonne, 7 Wonders, Small World, and countless others, which means the future of the games that brought most of us into this hobby is now almost entirely in one company's hands. I, for one, do not welcome our new corporate overlord. Will new gamers just entering the hobby?
I'll leave you with this quote from Mechanics and Meeples from February 8: "When you go through BGG's top-votes list, it's obvious that Asmodee only has one major rival among these games of ours: Z-Man Games (F2Z Entertainment). If you hear word of an Asmodee / Z-Man merger (A to Z!), that'll be the sign of the eurogame apocalypse, but for now there's still some healthy competition."