Part Two: Why Traditional Retail and Niche Games Don’t Work

Part One

In my blog of 02/24/2005, I talked about my definition of a niche game, a recap of the retail market in 2004 and why a niche developer will never get rich at retail. I will not go through that discussion again, since you can go to Why Traditional Retail and Niche Games Don’t Work and get all the details there. What I do want to discuss in this second, and final part, is why the Shrapnel Games model can and does work.

Six Years and Going Strong

Shrapnel Games was formed in June of 1999 and started operations on July 9, 1999. In that time we have published 27 games and varied expansion packs. We have signed three new developers this year, and expect to have six new developers on board before the end of 2005. We have developers who have been with us since 1999 and have developed a number of products that have been published under the Shrapnel Games name.

It Works, It Really Works

“So why are you telling me this,” you ask? Well, I am telling you this information to let you know that there are alternatives to trying to take a niche product into traditional retail, where you will be lucky to make $40,000. Our model works. We were one of the first and by far one of the most successful non-traditional publishers, bringing niche market games to the fans through online and catalog sales (and in recent years through nontraditional retail outlets such as game and hobby shops). We have had several companies copy our model with varying degrees of success. The ones that haven’t been successful are the ones that sign title after title with no regard to the product’s uniqueness and integrity of gameplay.

We are very exclusive in the products we release and work hard with our developers to make the game as playable and enjoyable as possible. In fact, we think this is the number one service we offer our developers. That and our knowledge of the marketplace. You won’t find us jumping from market to market like some of our competitors, because we understand how and where to get the audience niche games need.

Our results speak to our success. For instance, we know that a top selling niche game, marketed by us, can reach unit sales in the mid 5 figures (we believe we can take that number to the upper 5 figures in the coming years). We also know the average price point of our games is almost double what it would be at traditional retail and that we offer one thing that a developer will never see at retail: longevity. In traditional retail, a developer is lucky if his game remains at its original price point for three months while we have products that have been in the market for 5 years that are still at their original price points.

The Good News

The good news is the market is still growing! Almost 75% of our customers at the Gamers Front are making their first purchase of a Shrapnel Game! Let me say that again, after six years in business, ¾ of our monthly sales are to first time purchasers.

We see a bright future for nontraditional publishers and developers. If you are a developer in the niche game marketplace, look for this industry to continue growing as the large traditional publishers move more and more to the consoles, leaving the PC Gaming market an afterthought. With these publishers being forced to put out more and more ‘clones’ of hit titles as the production budgets edge toward the $10+ million mark, the new, truly unique products will all be published in the nontraditional market. And as this market grows, as the fans start looking for alternatives to the ‘clones’, the production values of these niche games will slowly edge towards a level that will bring even more gamers to the niche games marketplace.

Happy Niche Gaming!