Sold Out at the Publisher Level – What Does That Mean for You?

In two recent posts on BGG News – a news item about Ares Games' second edition of War of the Ring and Touko Tahkokallio's designer diary for Eclipse – the phrase "sold out at the publisher level" appears. I answered one reader's question as to what the phrase means, but thought I'd go into more details in a standalone post.

Will you be able to buy these games soon? It depends...

• "Sold out at the publisher level"? What does that mean? – The short answer: The publisher has no copies in stock, which means that distributors, retailers and gamers cannot order the game from the publisher.

• Does that mean the game is out of print? – No, it doesn't. The two statuses are similar in that games that are either "out of print" or "sold out at the publisher level" cannot be purchased directly from the publisher.

In the former case, that of the game being out of print, the publisher is effectively done with the game; it has decided to print no more copies and is running out its contract with the designer. (Many contracts have clauses that state a designer can reclaim the rights to a game - to relicense it, to publish it himself, etc. – after the game has been out of print for a certain period of time. For games designed in-house, as with something like Mansions of Madness from Fantasy Flight Games, the publisher will likely retain the rights as the designer is an employee.) You might still find a copy on store shelves or via a distributor, but the publisher has washed its hands of the game.

In the latter case, the publisher has no copies on hand but intends to print more – or might already be in the process of printing more, as is the case with both titles shown at the top of the page. Those copies are either in transit or still being manufactured or being assembled at the component level or being revised to fix typos or planned for in the future once funds, timing and other matters align the right way. Whatever the case is, more copies are almost guaranteed to be published at some point. (One must always keep in mind the possibility of meteor strikes, thermonuclear war, someone accidentally killing his own grandfather, and other such complications.)

• If I preordered this game from a retailer, will I receive that copy? – Almost certainly, but maybe not. When a game sells out at the publisher level, there's a good chance that the publisher didn't have enough copies on hand to fill all orders from distributors. (Not always, as sometimes distributors say, "I want a minimum of X copies, but I'll take up to Y more if you have them." In the early days of Magic: The Gathering, for example, distributors would beg to get as many cases as possible, then everyone got all the copies they wanted – and much, much more – with the release of Fallen Empires and the market flooded with thallids, homarids and unexpected marriages between a demon and a giant rabbit.)

If a publisher can't fulfill every order from a distributor, it typically prorates the orders. If, for example, distributors ordered a total of 2,000 copies while only 1,500 are available, then they will each typically receive only 3/4 of their order rather than some receiving their entire order and others being shafted. After all, publishers want to stay on the good side of distributors to ensure future business.

If a distributor doesn't receive all of the copies it ordered, then it likely can't deliver all of the copies ordered from it by retail stores. (Again, that's not always the case as distributors often order stock to keep on hand for subsequent orders from retailers.)

Thus, a distributor might have to prorate shipments to retail outlets, and if a retailer has taken orders for five games but receives only four, then the last order goes unfulfilled. Sorry, dude.

• Will copies be available for sale? – Possibly. As with distributors, retailers often order extra copies of a game beyond those preordered to place on the shelf. If a store received five preorders, when normally it receives only one or two, it might view the game as a potential strong seller and therefore order, say, ten copies for the shelf (rather than one preorder and two for the shelf). If the store now receives eight copies instead of 15, it can fulfill preorders and still have a few available for those Johnny-come-latelies. Maybe you'll be one of those lucky fellows...

• How could the publisher be sold out? Why didn't it print enough copies?! – And here's where things get tricky and prickly, with gamers being upset that copies of some hotness are not available. Surely Ares Games knew that War of the Ring, a high-rated proven seller, would be in large demand, right? How could they run out?

The answer is multifold, starting with the production costs. The second edition of War of the Ring has a MSRP of $90, which roughly translates to a production cost of $20. (I base this estimate on what I've learned over the years as well as a comment from Ludo Fact's Frank Jaeger on the production costs of Ora et Labora.)

Thus, every 1,000 copies in a print run costs $20,000. Do you as the publisher look at your credit line and say, "Well, we've got a credit line of $100k; let's print 5,000 copies"? No, you would not – not if you want to stay in business, that is.

In addition to knowing how much you can spend, you need to know what the demand for the game might be – and to do this, you approach distributors and give them marketing materials so that they can solicit orders from retailers. Anywhere from one to three months before a game becomes available from a distributor, the retailer will receive an order packet and place orders for everything expected to be released in, say, 2-3 months.

How do these retailers determine how much to order? First, they might have a monthly budget based on sales in prior years and make sure that everything they order sums to that number or less. (This process is complicated by games not arriving when initially promised, a topic for another article perhaps.)

Second, for extensions to existing game lines, they look to past sales and extrapolate: We always sell X many copies of a Carcassonne expansion within the first three months of release, and Y copies of a Descent expansion, and Z copies of a Munchkin booster. In many ways, those sales are guaranteed dollars, so they'll be placed "first", that is, no matter what the budget, the retailer will order these items.

Third, customers preorder games, which is sometimes due to a retailer saying to a customer, "Hey, you liked game R; how about this forthcoming game S from the same designer?" and sometimes due to a customer finding out about a game on his own. Even with preorders, though, these sales are only 75% guaranteed since customers move or change their minds or ignore one retailer to save a few bucks elsewhere. (Statistic from the Dept. of Made-up Statistics. Adjust as needed.)

Fourth, retailers just wing it, looking at titles about which they know nothing and making vague assumptions about how they may or may not sell. "This Stinky Bricks and Slimy Chicks looks weird, but we've always sold a couple of everything from Digging Dog Productions, so we'll get one to start with. And we never sell anything related to the production of hamburgers, so we're going to pass completely on Patty, Patty, Two By Four." And so on.

However they do it, retailers set a preorder number. The distributors compile all these numbers, then order copies from the publisher. The publisher then looks at all these "guaranteed" sales, compares the production cost of that number with its credit line, determines whether the cash flow from expected payments will allow continued operations, and decides how much to produce. Boom – the production number is now set, possibly.

As the release date for a game nears, sometimes retailers take additional preorders from customers, or hear good things about a game via early reviews, or receive a midnight vision of copies flying out the door – and as a result they call their distributor and raise the number of copies they want to receive. If enough retailers do this, the distributor in turn goes back to the publisher and asks for more copies. And if enough distributors do this, the publisher might raise its print run to ride the wave – except, of course, if the game has already been produced or the manufacturer has no time available to produce extra copies. In that case, the production number is locked and distributors will have to settle for whatever they ordered at some earlier point. (In some cases, however, as happened at both Spiel 2010 and Spiel 2011, the manufacturers will not be able to supply the quantity of games asked for by the publishers. Publishers will again prorate sales and delivery of the games, typically first come, first served.)

Thus, the blame for this problem falls on many parties: Publishers for not being able to afford to produce an unlimited number of copies and for doing a so-so job of marketing its games; distributors for holding less stock on hand than they have in years past, thereby increasing the odds of a game not being available for retock by retailers; retailers for also holding less stock on hand and for not ordering more copies in the first place, which would thereby increase the size of the production run; and gamers who talk about preordering a game without actually doing so, as they prefer to play the game first to see whether it's really all that.

Do you get the sense that no one is really to blame for a game not being readily available? The real issue, as was the case with the comic book industry in the 1980s, is the sheer number of titles hitting the market. If a retailer was previously confronted with 20 new titles per month, now it will be faced with 50 or 100 or more – while its sales will likely not have risen at the same rate, which means it can't just buy multiple copies of everything and hope for the best. Some titles will not be ordered, period. Only a single copy will be ordered of others, whereas previously the retailer might have ordered 2-3 – and when that one copy sells, the retailer will breathe a sigh of relief and say, "Okay, we're done with that game." If anyone wants to place a special order, sure, the retailer will get a copy for the person, but otherwise that copy is effectively off the market at that retailer.

Distributors likewise have many more titles to juggle than they did years ago and have trimmed their excess to have enough to fulfill retail orders with a scant amount in reserve for restock orders (with the exception of reliable sellers of the Ticket to Ride, Munchkin, Catan variety). As with retailers, in many cases they are happy to be done with titles when the stock runs out, even though a game might still be in print. If they get enough restock orders from retailers for last month's releases, sure, they'll order more from the publisher, but otherwise they'll let it go and worry about the dozens of new games arriving this month. (This is what Tasty Minstrel Games' Michael Mindes is complaining about in the Kings of Air and Steam forums, which is what led to TMG and other smaller publishers to Game Salute as a way to sell to retailers directly and consistently without worrying about whether distributors stock their titles.)

• Phew, that was a vast torrent of words, Mr. Talkypants. Keep it shorter this time. What can I do as a gamer to get these games? – Your best (albeit least feasible) option is to invent a time machine, go back a few months, and place a preorder before anyone else does to ensure that you receive one of the previous few copies available.

Alternatively, you contact retailers and see whether you can preorder the game now. Given the limited supply of copies (at least for now), you're not guaranteed to get one, but preordering gives you better odds than just walking into a game store and finding one on the shelves.

For the future, your best option would be to place preorders for games that you know you want. What's more, you'd place preorders for games that you're pretty sure you want but on which you aren't completely sold. Yes, you risk buying a game that ends up not being to your taste, but the alternative is to not get games that would be perfect for you.

In some ways, this is all a real life game of risk management: Retailers and distributors are lowering their risks of being stuck with goods by having less stock on hand, which puts you, the gamer, in the position of taking more risk in terms of missing out or of buying something you end up not liking. (Publishers, particularly new ones, are also at greater risk because they have a tougher time breaking onto store shelves and staying there month after month.)

In some ways, this situation is akin to stepping back to the 1980s. In those years, you had little to go on as to whether you'd like a game or not other than the (unsurprisingly positive) game description on the back of the box, or the questionable opinion of the retailer, or feedback from a friend of a friend. You just screwed up your nose and decided to take the plunge anyway. These days, with unimaginable quantities of data flowing through BGG and elsewhere on the web, you can find almost all of the opinion and background and game details that you want - but the game's print run has possibly already been set and if you wait too long to find out all that you want to know about a game, the game itself might not be available to you. What to do, what to do...? Buy or wait?

Okay, I'm spewing again. Let's stop here and call it a day.