I'm late with the blog today, because the words just aren't flowing. But here it is anyway.

To be fair, after complaining about all the slow sales during the first week of the year, I should tell you the last two days have been great.

It's a good thing, too -- I got a little carried away and ordered a TON of games. (I'll explain my reasoning, below.) But suffice to say, so far none of the games are beyond the realm of what I might have ordered anyway. Just much more of it, much faster. I don't really have any doubt it will all sell, eventually.

Until I actually order Games Workshop, that is, which I'm still mulling over. Until then, I haven't really gone past the point of no return.

Sidelines are a wonderful thing. You can watch what's happening which some detachment, because the whole store doesn't depend on the results.

There have been a couple of more indications that the gaming industry is in for a tough struggle. Gambit Games closing is one sign. Second, a blog I just read by the former manager of the D&D brand (the granddaddy of all role-playing games) for Wizards of the Coast saying that he thought that the number of games stores had shrunk from 3000 shops a few years ago to maybe half that many now. And, third; today WizKids, one of the big trio of game manufacturers, (the others being WOTC and Games Workshop), decided to go 'exclusive' with a single distributer.

Not a good sign. A cost-saving measure, that is a bit of a gamble. Been through this once before.

Back in the early nineties, there were more than a dozen national distributers of comics. When the comic 'bubble' burst in 1995, Marvel decided it was the fault of the middleman, and chose to distribute their own comics. Since Marvel represented 45% of the comics in those days, DC panicked and signed an exclusive with Diamond, quickly followed by the third and fourth largest comic publishers, Image and Dark Horse. Since those 4 companies represented 85% of all comics, the other distributers folded one by one.

Marvel proved to be totally incompetent at distributing, and eventually was forced to go to Diamond as well -- thus the monopoly situation we have today.

There are currently over a dozen game distributers, but GW has already withdrawn from the wholesale tier, and WOTC distributes much of its product direct, putting extreme pressure on the surviving distributers.

Who did WizKid's go for their exclusive? Alliance Dist., which is owned by.....you guessed it.....Diamond Comics.

I happen to think that Diamond's monopoly has been good for comics. A 'benign' monopoly is a lot like a 'benign' tyrant, the best of all possible situations. Unfortunately, both tyrants and monopoly's tend to become corrupt.

My game distributer is Alliance already, so this won't really affect me. But I feel sorry for all the other wholesalers, and I feel sorry for all the game stores who have to start new accounts and somehow juggle enough product to keep their volume discounts.

The surviving game stores, meanwhile, seem to be in denial about how their industry is doing. The exceptional stores are doing well, and don't see how the weakness in the rest of the marketplace could come back and bite them.

I hate to say it, but I find that my own store usually does well when other stores are struggling; I think it 's because I spend most of my time preparing for it. Maybe I don't quite reach the peaks that some of the other stores enjoy, because I'm diverting my assets into more diversifications so that when any product starts to fade, I'm already well on the way to establishing myself in something else.

By way of illustration: lets say there is a full service competitor who carries 8 out of 10 items of a certain product line at any one time. Let's say that because that product line is a sideline for me, I only carry 3 out of 10 items. The other guy has the advantage, but that's O.K. because I'm not counting on the sideline to support me.

If the market begins to weaken, the full service store may find that 80% is too much , and suddenly cuts back to 7 out of 10 items.

If, in the meantime, if I am making money overall, and if I see an opportunity, I can easily bump my inventory from 3 to 5. Suddenly, there isn't quite as much difference between us, though the line is still only part of my diversified product mix.

If the other guy folds, it doesn't take all that much for me to go from 5 to 7 items out of 10. Thus, hopefully, taking on the role as the 'main' supplier to the customers. Meanwhile, by having 7 different product lines, I can constantly adjust, look for opportunities, and adapt.
A specialist will almost always do better than a generalist in the short run, but a generalist will always be more stable in the end.