One of the biggest gaming conventions out there, Gen Con, just wrapped up in Indianapolis Sunday, and that presents a good opportunity for taking stock of the many big changes in the tabletop (board games, card games, and role-playing games) gaming world. Some of those moves, such as Indie Board and Cards’ merger with Stronghold Games, were announced at GenCon proper, while others, including Asmodee North America CEO/long-time Fantasy Flight Games head Christian T. Petersen announcing his departure at the end of 2018 and Asmodee itself being sold from one private equity owner (Eurazeo) to another (PAI Partners) happened shortly before the convention. But it all adds up to significant change for the industry, and some of it (the IBC-Stronghold merger and the Asmodee sale) is further proof of the growing importance of consolidation and scale in the tabletop gaming world.
Why do these companies matter? Well, Asmodee itself has become an industry titan, buying up 20 other hobby gaming companies in the past few years, including publishers of some huge titles. That list includes Catan Studios (known for the Catan franchise and all of its spinoffs), Days of Wonder (known for Ticket to Ride and more), Fantasy Flight Games (known for most of the many Game of Thrones games, most of the Star Wars games (including X-Wing, Destiny, Armada and Rebellion), and many more big properties), Z-Man Games (Pandemic), Plaid Hat Games (Dead of Winter), Lookout Games (Agricola) and more. As per Eurazeo’s release about the sale talks, Asmodee grew their annual revenues from 125 million Euros in 2013 (when they were still focused on France and the rest of Europe) to 442 million Euros last year, and their percentage of revenues from outside France has gone from 52 percent to 75 percent. That’s part of what made them a compelling purchase for PAI, for an estimated price of $1.4 billion (including debt assumption) no less.
Stronghold Games and Indie Board and Cards are companies that aren’t on the same scale as Asmodee, but both of them have some major titles of their own. Stronghold is the North American publishing partner for many European games, including hits like Terraforming Mars and Among The Stars, and they’ve also published plenty of their own titles, from Survive: Space Attack to The Dragon And Flagon. IBC is well known for social deduction games like The Resistance, The Resistance: Avalon, and Coup, but they also have put out some bigger games like Flash Point: Fire Rescue, Aeon’s End and Kodama: The Tree Spirits. And they also own another publishing studio in Action Phase Games, which has put out games like Path of Light and Shadow and Retreat to Darkmoor. So this combination has plenty of significant titles, and the quotes in the release about the merger talked about the importance of the scale gained for the new company (Indie Game Studios, which will have three separate sub-brands with Indie Boards and Cards, Stronghold Games and Action Phase Games):
“I am delighted to join forces with Stronghold Games,” said Travis Worthington, CEO of Indie Game Studios. “Stephen is a tremendous individual that has grown a loyal following over the past decade and we’ve had a long running relationship of working together over the years. Our skill sets are very complementary, and I look forward to even greater growth as we work together as one team in the future. The timing was critical for both our companies. As the industry consolidates around a few major corporate players, we needed to get bigger in order to compete as an independently owned creator of the world’s best board games.”
“We have entered a new era in the hobby board game industry,” said Stephen M. Buonocore, President of Stronghold Games. “We cannot simply operate as we did 10 years ago. To grow our business, we must acquire ‘mindshare’ via increasing visibility of our brands, additional customer focus, and hiring new talent. This merger will do exactly this. Indie Game Studios will allow us to increase our global reach, better fulfill gamer needs, and enhance our product development efforts throughout all of our brands. Indie Game Studios is uniquely positioned as an independent entity, ready to battle the giant corporate owned conglomerates of the hobby board game industry.”
Asmodee is certainly one of those “giant corporate owned conglomerates,” but it’s worth noting that they’re not the only one. Hobby tabletop games are gaining increased presence in major retailers like Target and Walmart and from online outlets in addition to hobby-focused game shops, but in those spots, they’re competing with a lot of mass-market games, including the various editions of Monopoly, Clue and Risk from Hasbro and the likes of Scrabble and Pictionary from Mattel. And those companies are worth at least $11 billion and $5 billion respectively, as per figures discussed around Hasbro’s unsuccessful attempt to acquire Mattel last year. Oh, and Hasbro owns the likes of Avalon Hill (Axis and Allies, Diplomacy) and Wizards of the Coast (Magic: The Gathering, Dungeons and Dragons), so they’re competing for space and dollars in the hobby-focused markets too.
But it’s the Asmodee acquisitions that have really changed the landscape, as they’ve snapped up a lot of the top hobby-focused companies out there. And that scale has given them the clout to enforce certain policies with distributors and retailers, particularly imposing minimum advertised pricing. Other companies have done similar things too, but Asmodee is so large at this point that what they do particularly matters. And given their scale, it’s a lot easier for them to strike particular deals with distributors and retailers. Oh, and their digital division has become one of the dominant forces in developing digital ports of board games, a fast-growing segment of the market, and has struck deals to make digital versions of many games they don’t publish themselves. And while we don’t know what their new owners have in mind, PAI Partners has massive amounts of funds and is invested in all sorts of luxury good brands, so they could potentially help make Asmodee even bigger with some scale of their own. And while the Stronghold-IBC merger isn’t necessarily exclusively about Asmodee or exclusively in reaction to what that company has done, getting some scale of their own does seem like a goal here.
The push for scale is something we’ve seen well beyond gaming, of course. It’s a key element of the media world these days, with acquisitions like Disney-Fox and AT&T-Time Warner playing out along those lines. And these moves are on a much, much smaller scale than anything like that, and the tabletop gaming industry in general (and the hobby gaming portion of it in particular) is relatively small compared to many business sectors. But the overall logic is still the same; gaining scale gives you more market share, more leverage in negotiations, and hopefully some logistical savings. And some of that seems to be playing out in the tabletop game world right now.
Of course, it’s not like that world is particularly narrow. There are tons of independent publishers out there still, and they’re making big impacts of their own. And those publishers are unlikely to go away any time soon, especially in an era where so many tabletop games are successfully funded on Kickstarter (providing the upfront costs needed to manufacture games, and also ensuring direct-to-consumer sales where the publisher gets a higher percentage). But it’s understandable why companies outside the Asmodee umbrella are looking for partners and scale of their own.
Another factor to keep in mind here is the importance of individuals, and particularly well-known ones, in this business. And that’s where Petersen’s announced departure gets interesting. While many of the recent headlines about him involve his work running Fantasy Flight and then Asmodee North America, he’s a famed designer in his own right, receiving design credits on everything from Twilight Imperium to A Game of Thrones to Star Wars: Armada. And he’s only 46; it’s not clear if he’s going to remain in the tabletop space or do something else, but if he does stay in board games, his publishing and design experience could see him make a major impact on an existing company or get a lot of attention by starting a new one.
And we’ve seen that kind of move before, with Zev Shlasinger (the Z in Z-Man; he left his role there in early 2016 and has gone on to run WizKids’ board game side and get them a lot of attention with titles like Sidereal Confluence and The Expanse) and Sophie Gravel (who ran Filosofia Editions and then eventually the merged Filosofia/Z-Man F2Z company before Asmodee bought them, and has since spun off Plan B Games (known for Century: Spice Road and Century: Eastern Wonders) and its Next Move Games imprint (known for Azul and Reef). Important industry figures tend to have experience figuring out what games will work, contacts who give them promising submissions, and contacts to help get those games manufactured, distributed and noticed.
So maybe that’s one thing to keep in mind amidst the pursuit of scale. Yes, companies like Asmodee have plenty of key figures on board themselves at their various studios, and the IBC-Stronghold merger is putting a couple of very prominent ones together with Buonocore and Worthington, but there are also lots of big names not under these umbrellas, and they’re not going away either. We’ll see if Petersen decides to join those ranks down the road or not.
But, at the same time, it’s unlikely the mergers will stop here. Growth has worked out very well for Asmodee so far, and there are plenty of other companies out there that might be interesting to them. And further growth from Asmodee could make it even more compelling for other smaller publishers to form their own alliances or create their own mergers in pursuit of scale, the way IBC and Stronghold have here. However, we don’t know what the new Asmodee owners plan, and maybe their own strategy will change.
For the consumer, there probably aren’t a ton of immediate effects from these moves. And there could even be some positive ones; maybe a larger Asmodee can help hobby games achieve more mass-market penetration, and maybe the combined forces of IBC and Stronghold can do the same with their titles. But for those interested in tabletop games, it’s certainly worth keeping an eye on who owns what, and watching to see where these corporate trends go.