Skip to Content

Estimating market size

9 replies [Last post]
twobob
Offline
Joined: 12/31/1969

[Warning: My thread starts off a little abstractively (if that's a word)!]

Which comes first ... the chicken or the egg?

The egg:
Costing our playtested and proven game.

The chicken:
Estimating the market size for our game.

I think the chicken probably comes first - as it's difficult to do the costing without having an idea about how many games could be sold.

So the real questions are, how many chickens? = How do we estimate the size of the market for our game and how many it will sell?

For example, if I had a game similar to the How to Host a Murder Party series (but better of course!), how would I go about estimating how many people might be interested in that game? Do I look at the 20 - 30 demographic and then make some assumptions about conversion/hit rates and assume 1 in 1000 might buy it? (I'm sure it's much more complex than that!?)

How do publishers figure out how many people might buy a game?

I'd be interested to hear how any self-publishers did their market research to determine how large their target market was, and then what mechanism/calculation/rule of thumb they used to estimate how many they thought could be sold.

Grateful for your views.

comport9
Offline
Joined: 12/31/1969
Estimating market size

That's where you'd get a professional corperation to help you. Like the "Nielsons" ratings. (I'm sure they do more than just TV...) But there are a lot of company's around that do that sorta thing.

However, I have no idea what the cost would be...

To do it on your own I'd suggest going to your local library to look up census date. From there you extrapolate what you feel your "target audience" would be.

An advertising firm would also be able to help you out.

Zzzzz
Zzzzz's picture
Offline
Joined: 06/20/2008
Estimating market size

I will just toss out, that many Cons/Toy Fairs/etc have demographics that might help you in this area. Though from what I have seen, the demographics are not as detailed as how many people will play "my game" or even "game X". Not sure you can get that specific unless you did some population sampling (say by attending X cons and surveying people about your game, maybe get them to playtest a prototype and ask them, would you buy this game, yes/no).

If you want a high level idea, take a look at the exhibitor information for GenCON (www.gencon.com), it will contain some basic demographics information about different types of games and the number of people playing each. (or at least last years exhibitor packet contained this type of information).

You could potentially base some production values on these types of numbers. If you figure that 30,000 ppl attend GenCON, and their demographic states that 30% of those play board games (9000), what percentage of those would buy "my game"? Factor in that other new games by known designers will most likely crush your dreams of selling 9k, figure at least 4500 ppl wont even notice your game. The other 4500 might notice, but of those lets say only 2250 ppl have any money left by the time they get to you, factor in that no one has heard of your game, 1125, take into account that after playtesting at your booth with the available demo you have set up, only 550 even like the game, but even then half of these will not be sure if friends will play it, so maybe 275 ppl might buy the game, but the price might scare another 135 ppl away. So at this point from 30k you are down to about 140 ppl that may actually buy your game.

From here figure that you might attend Y different shows in hopes to sell your game. Maybe get some distribution contacts from which you might be able to add Z more copies.

And finally you have some idea of the number of games you might want to produce. At this point assess if it is cost effective enough to only produce half the the number of copies you "expect" to sell. So for my long winded example, 140 per show times 6 shows, 1 distributor say who will gamble on 100 copies, so I might consider something like 1000 copies to start, but wait since this is a new game, maybe consider only half of the 1000 for 500 copies and what would be my largest total for the year. Unless once I went to a few shows, I sold out (which is a blessing), then I would produce more. At this point you really need to consider if producing 500 is cost effective, since higher productions qty will reduce your final price, this will impact both gamers and distributor interest in your game.

As with all games, you just never really know how many you will sell, unless your someone like Knizia, which means you can sell 10k just by having designed the game. :)

As a side note, this is the current idea behind my production scheme for Infamous Games. So far I have still estimated a little high, based on actual copies sold. Though I am refining each year (and I do not get a chance to attend 6 shows a year, so that might be an issue).

Ah well, good luck!

OrlandoPat
Offline
Joined: 10/16/2008
Don't fall into the trap...

Estimating market size is a tough question. One thing to keep in mind, however, is the duration that you plan on selling your game for.

You have, no doubt, read articles about games that sell 70% of their total in the first couple months, and then taper off. This is not always the case. Depending on your market, your games may continue to sell at reasonable levels over the years. For example, last year was our biggest year for Ice Lake - even though it was released in 2003. Your "How to Host a Murder" games are another great example. Even though they've been out for years, they're still on the shelves.

If you are planning on selling your games for a while, guesstimate what your storage costs are, and then decide how many you think will sell per year. You want to estimate what will sell initially (tough) and then estimate how much will sell each year for the next four years or so (even tougher).

Why all this extra work? Because of the economies of scale. If you think you're going to be able to sell 3,000 the first year, and another 2,000 over the next 3 years, then you may want to consider doing a print run of 5,000. That keeps your per unit costs way down - but has higher storage costs. So, you have to balance the numbers (and the risk). I can't over-emphasize the risk portion of this equation. Having 5,000 unsold games sitting in a warehouse is a very unsettling thing.

The other issue is that many of the "big boys" don't expect immediate delivery. Some will place their holiday orders at ToyFair, with the understanding that they'll be able to ship later in the year. So, another way to go is to do a small print run to see how things go, and then sell like crazy to try to get one of the big boys to place a big order.

- Patrick Matthews
Live Oak Games
www.liveoakgames.com

Anonymous
Estimating market size

I'm not sure what kind of market analysis most of the smaller game companies do when releasing a game. Seems like the questions for you are:

1. How many distributors do you have lined up to sell your game?

2. How big of a publisher are you? Is this your first published game? Do you have a series of games already published or ready to publish as follow up games?

Selling games is all about getting them into the hands of potential customers. Without some good distributors lined up, chances are you'll have a tough time getting your games into the hands of the people that would be interested in buying them. Even if you come up with numbers showing that 1,000 people would be interested in your game, that doesn't mean that those people would automatically have access to it.

Many others on this site have mentioned how helpful it is to attend conventions and make contacts with distributors. Your being down under may be a problem when it comes to attending, so do you have alternative means of contacting distributors and setting up distribution for your game.

Also, how well known are you or your company? It's a bit of a catch-22 in that your games will sell better the more your company is known, but you won't be better known until you sell more games!

Many first time publishers make runs of 500-1,500 to try and minimize their loses on an initial release. It will cost more than a run of 3,000-5,000, but you will also learn a lot about how your game will do without having the extra investment in games or warehouse space.

Like Patrick said, you don't want to have thousands of unsold games taking up precious warehouse space. If sales exceed your expectations, you can always print another run.

I know this isn't in the direction of market analysis, but I think your time would be better spent making contacts with distributors and finding out what they're looking for.

Best of luck!

Anonymous
Estimating market size

Quote:
It will cost more than a run of 3,000-5,000...

I should clarify that it will cost more PER GAME than a run of 3-5k.

twobob
Offline
Joined: 12/31/1969
Re: Don't fall into the trap...

OrlandoPat wrote:
One thing to keep in mind, however, is the duration that you plan on selling your game for.

The game that I've got in mind is something that the buyer might purchase every year (until they got sick of it!). The game is 'consumed' while it is being played - so repeat purchases would be required (it's not the sort of game that you buy once and keep in the closet!).

OrlandoPat wrote:
guesstimate what your storage costs are, and then decide how many you think will sell per year.

So which does come first, the chicken or the egg?! ... but I see where you are coming from ..... basically, think about what I'm going to do with all the games unti they're sold because there's a cost associated with it!

OrlandoPat wrote:
I can't over-emphasize the risk portion of this equation. Having 5,000 unsold games sitting in a warehouse is a very unsettling thing.

Perhaps my approach should be to limit my first run to the extent that if (say) only 50% sold, I wouldn't be tooooo much out of pocket. And then if I did sell 80% (!!), even though I might only break-even, I could be confident of selling more next time.

OrlandoPat - thanks very much for all your comments. Let's see where it takes me!

Cheers .... TwoBob

twobob
Offline
Joined: 12/31/1969
Estimating market size

SiskNY wrote:
1. How many distributors do you have lined up to sell your game?

2. How big of a publisher are you? Is this your first published game? Do you have a series of games already published or ready to publish as follow up games?

Yeah, well 1: Zero and 2: Teeny - it's my first game for publishing.

SiskNY wrote:
Many first time publishers make runs of 500-1,500 to try and minimize their loses on an initial release. It will cost more than a run of 3,000-5,000, but you will also learn a lot about how your game will do without having the extra investment in games or warehouse space.

I think you're reiterating what OrlandoPat said - it's good advice! So, if I do go ahead, it will probably only be on a small scale first time around.

SiskNY wrote:
I know this isn't in the direction of market analysis, but I think your time would be better spent making contacts with distributors and finding out what they're looking for.

I'll certainly be talking to distributors in the near future, but if you (or anyone else out there) comes across ANY statistics on the board and card game industry - please share them!

Thanks again for all your suggestions.

Cheers .... TwoBob

Anonymous
estimating market size

Well, after some thought, the best process may be this:
--Look at the earnings of the top three gaming companies
-- Determine what percentage of their entire product line are game boards (total dollars of industry)
-- Divide by the average cost of a game (Total number of games sold annually)

setarcos
Offline
Joined: 07/31/2008
Estimating market size

MarketingMan,

How does one obtain such data?

Leland

Syndicate content


forum | by Dr. Radut