In the last few years the German obsession with board and card games has begun to make itself felt in the United States. Several factors are responsible. One is the enthusiasm and proselytizing of U.S. game hobbyists, who enjoy nothing better than introducing the games they love to other people. Another is the consistently high quality of European, particularly German, games. A third has been the increasing recognition of German games in the pages of Games magazine over the last three years. The financial risks and great efforts made by American publishers and importers, especially Rio Grande Games, Mayfair Games, and Eurogames/Descartes, to bring great games to the American market also play a significant role. Finally— regrettably—there is the vacuum left by the major American game publishers, whose commitment to mass-marketing makes it impractical for them to produce games for what they consider a niche or specialty market. And what of the game market in Germany itself? We asked Wolfgang Kramer, one of the most successful and prolific game inventors in Germany and a business management professional, to tell us about it. Here is his sobering report. - Burt Hochberg
Causes of Growth
The game market in Germany grew steadily from 1982 to 1994, frequently at a rate of more than10 percent a year. In 1982, game sales in Germany were about 260 million DM ($140 million), In 1994, sales reached about 850 million DM ($460 million). Though the market has declined somewhat since 1994, to 770 million DM ($416 million) in 1996, it has been stable for the past three years.
The game market was positively influenced by a number of factors.
- The Spiel des Jahres award: The jury and the award were created in 1979. The award is viewed so positively by both retailers and game buyers and has become so important that a winning game can expect a 10-fold increase in sales. The high standards for games set by the SdJ jury have led publishing houses to improve the quality of their game systems, graphics, and components.
- Game shows: The international game show in Essen is the most important of this type. The show, first held in 1983, continues to grow in importance and attendance. This public exhibition of games now attracts about 150,000 visitors over four days. Although the Essen show is the largest, there are also large and important annual shows in Vienna, Stuttgart, Switzerland, and Munich, in addition to many smaller shows throughout Germany and Austria.
- The media: The media now reports frequently on games and focuses on the positive aspects of playing games. Today there are a large number of respected game critics who regularly write interesting reviews of quality games. Several magazines devoted to games support the increasing game-playing population.
- The authors: Game authors have been meeting annually in Goettingen since 1983. From this, an active author community has developed, which led to the establishment of a game author guild (SAZ) in 1991. This is a registered association devoted to promoting games as cultural properties and represents the interests of game authors. Since 1997, Munich has been home to a second annual meeting of game authors. The number of authors has multiplied in the last 20 years, which has led naturally to a larger supply of high quality game prototypes.
- The games: The acceptance of good games encourages the development of even better ones. We therefore see a constantly improving level of game design. New categories of games, such as adult games, communication games, fantasy games, and collectable card games, promote game-playing to new groups of buyers.
- Game clubs: Dedicated game players have formed a large number of game clubs in Germany. These clubs contribute to the dissemination of game-playing and promoted the development of an active game scene.
- The Deutsche Spielepreis: This new award was introduced in 1990 to give game players (rather than a professional jury) an opportunity to honor their favorite games.
- Special organizations: Several organizations have been formed to promote games: game archives (e.g. Deutches Spielearchiv), museums (e.g. Deutsche Spielemuseum), game libraries, and initiative groups.
Causes of Stagnation
In 1995 and 1996, the game market in Germany declined about 10 percent and has been stagnant since then. I think there are several reasons for this:
- Computer and video games: Such games have somewhat displaced social board and card games. These new games are played primarily by 10- to 18-year-olds.
- The general economic situation: The general economic situation and high unemployment in Germany in those years changed consumer buying habits. They now buy fewer high-priced games, but continue to buy lower-priced ones. We are seeing a surge in the popularity of small and inexpensive card games.
- Other leisure activities: Several other leisure activities represent serious competition for social board and card games. People are spending increasing amounts of time on the Internet, playing sports, taking trips, and watching television.
- No spectacular innovations: In the past few years, we have seen no new game ideas. Innovations add interest and give new life to the market. Also, the best sellers of the 80s and early 90s were unable to influence the overall market significantly.
Why so many German strategy games?
Perhaps the most substantial reason is the success of the Spiel des Jahres award, which stresses quality, strategy, and human interaction in games. The other reasons mentioned above also played roles in the spread of interest in social strategy board and card games.
For a long time people did not believe that social strategy board and card games could be in much demand in Germany. The great success of Die Siedler von Catan showed the doubters the kind of financial rewards a good strategy game can produce. As a result, authors, publishers, and retailers who supported social strategy board games intensified their efforts, and such games as El Grande, Löwenherz, Euphrat & Tigris, Durch die Wüste, Elfenland, Giganten, Union Pacific, Tikal, and Torres successfully followed in the footsteps of Die Siedler von Catan.
With the rise of interest in games since 1980, the publishing houses grew stronger and were often able to triple their sales. Also, new game publishers and new brands were created; for example, Kosmos, Goldsieber, Amigo, Queen Games, Winning Moves, Drei Magier, and Adlung Spiele.
During this time there were also a number of bankruptcies and buyouts in the German game industry, proving that even in a boom some fallout is inevitable. Companies that did not manage to develop good games saw their games unwanted and their profits turn to deficits. Several smaller publishers, unable to capitalize on the boom, failed and no longer exist: Bütehorn, Hexagames, Sala Spiele, and Fun Connection are some examples.
Another danger of a boom is the bust that can follow. Several companies failed when sales started slipping in the late 90s. ASS and Schmidt Spiele & Freizeit (SSF) announced bankruptcy. FX Schmid (FXS), Klee-Spiele, and Berliner-Spiele were acquired by other companies due to their losses. Unfortunately, neither SSF and FXS was a small publisher; in fact, SSF was the second largest and FXS the third largest German game company. Both were traditional German game publishers with long histories. Prior to the bankruptcy, SSF had sales in excess of DM 100 million ($40 million).
How was it possible for companies to fail after such a long period of sustained industry growth, especially when that growth in some years was in double-digit percentages? What causes led to the failures?
- Costs: In order to satisfy rising demand, companies had to invest heavily in production, inventory, sales, and organization. This led to substantially higher fixed costs.
- Sales: During the boom, the structure of sales changed drastically. More and more sales were concentrated in large chains such as Toy R Us. As expected, many small game shops fell to the commercial giants. The result was that a few very powerful chain stores were able to demand special pricing and sales assistance from game publishers.
- Competition: Growth led to greater competition. Large American publishers barged into the German and European game market. Milton Bradley began their push into the German game market in the 70s, and Mattel started distributing their games in 1988. These giant American publishers pushed their games with expensive and aggressive television commercials. To compete effectively with these giants, some game companies merged.
- The life of a game: As a consequence of the greater competition and higher demand, the number and quality of games rose significantly. Higher quality games naturally have higher initial costs. But the large number of new games also led to a drastic reduction in the life span of individual games. Many were removed from the market after only one or two years. Such short life spans made it almost impossible for weaker games to show a profit.
The concentration of sales, intensified competition, higher costs, decline in sales, and erroneous product policies were the causes for the bankruptcies of several medium-sized German publishers.
How will the game market develop?
Prognoses are always difficult. Electronic games and the Internet continue to grow. Social strategy games will have difficulty maintaining their special position. Nevertheless, they can succeed. What is required are new, innovative game ideas to bring players a unique playing experience. We need high-quality games to promote informal gatherings of people. There are still only a few other leisure activities that bring people together to have fun. So we must strengthen the value of our games. Authors and publishers must develop good new products that are able to attract new groups of buyers.
I believe social strategy games will have a market in the future, although I do not foresee high rates of growth. Instead, I think sales will remain at their current levels or decline slowly.
- Wolfgang Kramer
(Translated from the German by Jay Tummelson.)