Last week I started talking about the less known history of NSKN Games and its struggle though the brief 5-year existence. What was meant to be a short article evolved into a full fledged essay about success and failure, lessons learned and a lot of inside stories. So, today, I am going to continue through the trials and tribulations of publishing board games…
I will simply pick up where I left off – at the beginning of 2013. We managed to weather the storm generated by the quality issues in Exodus: Proxima Centauri. In the relative calm generated by popular support for a small publishing house which was inexperienced but willing to do the right thing, we tried to come up with a solution which would not lead to the dissolution of NSKN Games. We put our engineering skills to work and fashioned a new policy for NSKN Games – standardizing and making games compact. The idea of standardizing game boxes and components, of streamlining rules would lead to a more mature business and its long term survival, but not before another episode of living on the edge of bankruptcy.
The infamous upgrade pack
Early in 2013 we had promised our customers who owned the first edition of Exodus that we would do right by them and provide a fix for the many quality issues of the game. Later that year we decided to reprint the game following the paradigm dictated by our policy shift, so we cam up with Exodus: Proxima Centauri revised edition, a game which would play just like the original one, but packed in a smaller box, with more components, manufactured in Europe a few kilometers away from our new home in Warsaw, Poland. We promised our fans an upgrade pack containing all changed components for an affordable price, nothing more, nothing less.
Selling a product at cost to preserve a loyal customer base is acceptable, probably even recommended if your shipping is limited to a small geographical area (a country, maybe even a continent) but it becomes a logistic nightmare if you have to service customers worldwide. But a promise is a promise, so we had to abide by it.
We took preorders for a few months, hoping that not many people would take our offer and get the upgrade pack. Little was our surprise when more than 200 people signed up to get a product which we would sell for its manufacturing cost plus our estimation of the transport cost. As it turns out, many of our customers were from USA (35%), but we had strong backing in Australia, New Zealand, Canada or Brazil and less than one third of our customers came from Europe. Shipping costs were more than double compared to our forecast, so we sunk again into a financial pit.
We did good on our promise, but the Voice of those who missed the deadline for ordering upgrade packs was so loud that it turned a good deed into another PR nightmare. In the autumn of 2013 we felt like we lost the trust and support of the board gaming community and that the inevitable will happen. It had become more a matter of when than a matter of if.
The hard deadline
A small publisher of board games counts its years from October to October. The largest and most important gaming event in Europe is Spiel Essen, a trade fair with 100,000+ attendees where all the big names are present and where every publishing house, no matter how small, has its chance to leave a mark, to engage the community and to score big sales.
Spiel 2013 was our last shot. A month before the event we made the hardest decision there was to be made: if by the end of the year we would not have our initial investment back, we would sell our stock and shut down NSKN Games altogether. Two and a half years of struggling was a long time and trying to stay positive and motivated became harder and harder. We wanted to stay, but everyday life had caught up to us and we needed to have results. For any business, results means financial results.
We had to make Spiel epic, but that was not enough. We had to make the post-event sales even better. My most optimistic estimation was that we had about 40% chances to succeed and stay in business. So, we had to work with both scenarios in mind, hoping for the best (so, new games to show to the public) but preparing for the worst (cut investments and try to sell out remaining stock).
From a personal perspective, I saw the closing of NSKN Games as the biggest potential failure of my professional life to that point. I had left one of the most hyped industries – the oil business – to pursue a dream and for the first time in my life I was enjoying every aspect of my job. On top of that, I had no idea what could follow after games publishing. Tough times ahead…
Light at the end of the tunnel ?
With the booth all set up in the exhibition hall and people pouring in from early morning, I was mostly stuck in business meetings and the first few did not go well. I was only able to sell a few hundred copies of the revised edition of Exodus and none of our remaining stock of older games. Getting rid of the old stock (in exchange for money) was the key to reaching our financial objective. By noon of the first day I was feeling almost hopeless, not knowing that I still had one ace left up my sleeve. I thought it would all be over.
It took only one meting to change my perception and to turn things around completely. Besides finalized products, we also took a few prototypes to show to the public, so that we can get some feedback and create some buzz. As it turns out, not only gamers became interested, but also fellow publishers. Back to the key meeting… our future business partners, while completely uninterested in Exodus or our older games, were very eager to get a localized (for us that is any language except English) edition of our upcoming game Praetor. First I was speechless. Then I said yes. Needless to say that I needed a short break to revise my (and the company’s) entire sales strategy.
While my colleagues and our volunteers were selling boxes of Exodus left and right, my focus shifted to selling our upcoming title Praetor. I had finally understood one of the key drivers of our industry: the cult of the new. A brand new product held so much hope, so much promise and it was a lot more attractive than an existing product with a rather troubled history. I saw the light at the end of the tunnel.
This new hope also allowed us to make one more hard choice. We sold off for a heavy discount the remaining stock of our oldest title – Warriors & Traders. That was our maturity exam to enter real business and we passed. Even if we gave it away at a small loss, the income from that deal kept us afloat and offered us much needed cash flow.
Drawing the line
At the end of November 2013 we reached the deadline. We had no stock, no receivables and assets which did not amount for a relevant value. Logged in our online banking portal, we summed up everything NSKN Games owned at that time and drew the line. We were just $150 over the target, but it was a good day – we got to stay in business at least one more year.
Backed by our growing experience, we made for the first time a real business plan for the upcoming year, with financial targets, cash flow and revenue streams, etc. Our hopes and dreams were supported by the enormous interest in Praetor, for which we had signed partnerships and promises for no less than 11 languages.
I also had to surrender and throw away my original plan of doubling the business size every year. What was I thinking?!?
A few bites of reality over the years showed me the the most important qualities of a small business owner are adaptability and versatility. If during year one of NSKN Games I showed almost none of them, by year three I was already ripping the results of what I had sown.
(part 3 coming up next week)