I’ve worked in the board game industry since 2014. In that time, the number of people buying and playing board games has swelled, along with the number of publishers making them. It now seems supply is rising faster than demand, which is tough on publishers. For example:

Publishers rely on a distribution system to get many of their games to customers. It works like this:

Publisher sells game to distributor at wholesale price. Distributor sells game to retailer at marked-up wholesale price. Retailer sells game to customer at retail price, or discounted.

As the number of publishers selling through distribution has grown, distribution revenue per publisher has dropped.

That’s the impression I get talking to publishers anyway. Also, brick & mortar retailers say choosing games is harder now than before, because now there are more games to pick from, from more publishers. So more games lose out, which translates to less profit from distribution for each publisher (on average – individual publishers vary).

True or not, last year I came to believe this, and it inspired me to look for alternatives to the distribution system.

Are there viable alternatives to the distribution system?

One option is selling directly to customers and retailers, which has proven effective in a variety of industries. Kickstarter has shown direct sales work for early game adopters who want to fund ideas. Maybe it could work for games that actually exist?

To see if a game publisher could avoid distribution via direct sales, I modeled the costs and revenue of a direct sales game publisher. My model predicted high profits, higher than what’s possible for a traditional publisher. It also predicted high sales volume.

That made me want to pursue the idea. I wasn’t sure I wanted to start a publisher, so I tried to convince a few traditional publishers to start direct-sales businesses and involve me.

They all said no. Some thought my model was too rosy, some had too much inertia. Jamey Stegmaier said no. He felt distribution would work better for him than direct sales. I felt the opposite. Too bad. I love that guy.

North Star Games, my employer at the time, was the most interested, but couldn’t be as aggressive as I wanted to be. I was out of luck.

I get lucky

After all those rejections, I caught a break. Underdog Games, a company I’d not heard of, contacted me through Linkedin. Its founder, Hasan Hasmani, had read my game industry writing and wanted to talk. He said Underdog only sold games directly to consumers and retailers.

The ensuing conversation changed my life.

I learned Underdog was doing unbelievably well, even outperforming my rosy model. It was spending much less on marketing per box than my model assumed possible, so margins were huge, and they were selling at high volume.

Underdog’s first game, Trekking the National Parks, sold more than 80,000 copies in its first 16 months. It was the 7th best-selling game on Amazon at the peak of the 2019 holiday sales season. That’s incredible for a company’s first game.

Hasan said he needed someone to help build Underdog’s game pipeline, a subject I’m passionate about. After a feeling-out period, he offered to hire me and I took the job. My new colleagues:

I’ve been working at Underdog for a month now, and my experience has confirmed my enthusiasm. It’s something new. It may have a chance to disrupt game publishing.

I don’t feel comfortable discussing Underdog’s operations, because they’re the company’s edge. So this won’t be a detailed breakdown of why Underdog is working. Rather take this post as a pointer: there’s a new business model on the horizon and it could change things.

It’s not clear if Underdog will do the changing, however. It needs more than a disruptive sales model to disrupt the industry. Most of all, it needs great games. Time will tell if it can clear that bar, but I’m optimistic, for three reasons:

Thanks to high margins, Underdog pays royalties more than 2x higher than other companies. That’s an advantage for licensing (designers: pitch games here). Trekking the National Parks did clear the bar. I think the next one can too (here’s where I talk about upcoming games. I want to spark your interest on top of making my point, so stop here if you don’t want to be pitched):

It’s called Trekking the World. It’s a gateway strategy game, a follow-up to Trekking the National Parks. In it, you travel around a world map (cut to look like a projection map), visit iconic places, collect souvenirs, and get points in a variety of ways:

On average, playtesters report enjoying its gameplay more than Trekking the National Parks (which itself tests very well), and the art looks unusually good to me:

So I think it has a chance (sign up here to be notified when its Kickstarter campaign launches).

Postscript: caution for publishers

In retrospect, the publishers I’d pitched were right to reject me. Since then, I’ve learned direct-to-consumer sales at scale require detailed domain expertise I didn’t have and wouldn’t likely have gotten.

That expertise is hard to find because those who have it guard it, and most run their own businesses. Publishers wishing to move toward a direct-to-consumer model have a tricky learning curve to scale.