Revenue Sources
Section 3.4.
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Role-Playing Games Commercial Market Analysis


I spoke to the proprietors of a niche-market Fantasy Games shop in London. They were very open, and willing to talk about their Role Playing Game business. The conclusion is that there is a very good potential market for Artemis Project products here.

My personal view of the product is that the product is very clever, and very successful within its boundaries. The main concept problem is that it's boundaries are un-defined and expanding. So there is a big opportunity for revenue by incorporating a near-term space scenario into the market.

It appears that a Role Playing Game produced by a company in the field, set in the Artemis Universe, could generate a substantial revenue in royalties and awareness.

Product Background

The games use diecast metal figures, but with no fixed playing surface boundaries. Simple rules determine the actions and capabilities of the pieces.

Each game has a theme, based on fantasy figures which may be totally mythical, or futuristic soldiers. It is basically a Blood & Guts battle game with tactics.

However, very successful games based for instance on interstellar trade (plus battles) have been launched in the past, and the battle content should by no means be considered a restriction on the market. This is supported by the people I spoke to in the shop I visited.

The great thing about the product is that it is expandable in all directions.

The basic box gives you playing rules and a limited number of pieces. These you have to paint, and they are sufficiently attractive in themselves to be collectable alone. In fact, all pieces are unpainted. This is the first re-sale opportunity. The shops also sell paints and brushes. There is a regular magazine which also teaches you good painting techniques, and how to make additional scenery.

One of the interesting things about the game sceneario is that there is no fixed playing surface area. Any cloth-covered table will do.

The game can be expanded by buying more pieces (and painting them), or by getting together with others (the rules translate to all scales of implementation). In the game, you can stage battles from a few pieces to a few thousand, lasting hours to days.

There are not very many games, a dozen at most, stocked at Games Workshop. Customer feedback is encouraged, and new versions of the games are produced. Because of this, some games have lasted in the market for over ten years.

A typical game will last in the visible market for a year to 18 months before being taken off. The main reason for this is limited shop display space. The game will continue to be available by mail-order.

Hence, the customer has several products sold to them. The producers of the games use every opportunity to encourage development and use of the product, thereby greatly extending the lifetime of the product.

The Price

About $80 per game maximum? Didn't get this information. All indications are that this market is lower-priced than the very expensive SF models market.

The Promotional Activities

Word of mouth, and via the in-house magazine. They do not advertise! The magazine is well-produced, very professional and colorful. It supports the idea of taking care to paint the figures so as to make them collectable, as much as it does discussing game tactics and reporting on local game venues. Customers are encouraged to seek out other like-minded customers to play against locally.

The Outlets

The UK has about 80 stores. For the UK, that is a _large_ number of stores, a huge number for what appears to be a very niche market. The company is UK-based, but also has 2 shops in Canada, 5 in Australia and at least 2 in the USA. It is growing fast, at a 30% annual growth rate. The other main selling medium is mail-order. They have over 200,000 people on their lists.

The Profits

The sales databases are large (200k customers), and probably represent (my estimate) UK sales turnover of at least $21M per year.

Tooling-up costs are not that high for a new game, and the marketing budget is minimal, hence reducing risk. I get the impression that they have a very strict vetting programme on new releases, with no talk of any real market failures.

Each figure probably costs $15,000 to tool-up for. They have probably over 100 figures on their lists, representing a significant investment in product creation.

Note that the product is unfinished (needs painting) and accompanied only by printed rules and instructions. Hence the cost of a basic game may be as little as $150,000, almost all of it tooling-up. They need only sell under 10,000 boxes to break even, so profits are very high.
Subtract from this the high cost of maintaining a large number of stores.
Add to this the resale of in-store products such as paints, and additional figures.
Add to this the evidence that the whole business is expanding rapidly, meaning that in this type of operation, they must have a very positive cashflow.

The Competition

There must be others in this market, but in the UK, Games Workshop appears to be stealing it! They stock product from a number of small design houses, and hence can aquire the best concepts. They organize the main UK annual games event, which is attended by thousands of people and exhibitors. Wargames are played for competition at these events.

How this relates to the Artemis Project

I spoke to the people in the shop. They were very positive about the idea of new products in general. An Artemis game would be purly non-Blood&Guts, but then this would give them access to the huge untapped market of females, as well as those interested in science fiction. Most customers are young (12-20 year olds), and male.

I think our game theme could be based on the Earth-Lunar economic models, and the expansion into interplanetary mining, and Earth-Lunar tourism commercialization.

The massive benefit that we would offer is the publicity, and unique nature of the game theme being real and 'happening'.

We would sell the rights to an Artemis game to the main company, and let them design a game based on information we give them. At periodic intervals, we can of course update the designs as they happen in real life, and perhaps as new scientific information changes the rules of the game!

My personal opinion is that the proprietors of this games business would really like the Artemis concept. It has massive appeal, can create its own market and extend the existing one, while bringing huge publicity to the operation as a whole for them.

What is in it for us?

Royalties. Plus, the games manufacturer has not even started to get seriously involved in CD-ROM games yet. They have some, but not many. These games use real footage shot on special sets created by the UK equivalent of LucasFilms, which amounts to perhaps a couple of dozen very capable film industry FX design and build operations. They can, for instance, create whole spacesuits for a few seconds of footage and have actors work them.

Having access to the above design talents will be invaluable to the Artemis Project in later stages.

What Happens now?

Revenue Sources

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