Gaming industry finds a strategic hub in northeast Indiana
By Bridgett Hernandez | Greater Fort Wayne Business Weekly
In this digital age of virtual reality and Pokémon GO, it might surprise some people to hear that the board game industry has been experiencing a boom in recent years.
In 2015, the sales of hobby games in the U.S. and Canada reached $1.19 billion, a growth of 29 percent from the previous year, according to consulting firm ICv2. Within hobby games, board games grew 56 percent from $160 million in 2014 to $250 million in 2015.
“It’s cool to be nerdy now,” said Dawn Studebaker who, along with her husband Scott, owns the Game Annex, a store and hangout on Illinois road in Fort Wayne that sells hobby games and provides a place for gamers to play them.
While some long-time nerds are annoyed that hobby games have become more mainstream, Studebaker, a self-professed nerd herself, doesn’t mind – the trend is good for her business as well as the gaming industry, a significant chunk of which is located here in northeast Indiana.
Studebaker said it’s a little-known fact that the region is home to game designers, publishers, manufacturers and one of the largest distribution centers in the country, Alliance Game Distributors.
“Fort Wayne really does center around gaming which is why we felt a good quality store would be a good benefit for our town,” she said.
A hub for gaming
A variety of factors play a role in why the gaming industry has made northeast Indiana a hub for doing business, said Stephan Brissaud, COO of board game publishing company Iello.
The company is based on the west coast, but its warehouse is located in Fort Wayne. From there, Iello (pronounced “yellow”) sells to both distributors and directly to retailers. Its best-selling game, King of Tokyo, has reached a mass-market audience through retailers Target and Barnes & Noble.
Brissaud said Fort Wayne is an advantageous location for Iello’s warehouse operations because the city is centrally located within the U.S., which means savings on the cost of shipping. The city also has affordable warehouse facilities. Proximity to a major game distributor is also a plus, he said.
Gen Con, the largest tabletop game convention in North America, which takes place in Indianapolis, also brings businesses in the board game industry to Indiana, said Tony Gulloti, director of sales and marketing for board game publishing company Arcane Wonders.
The company runs most of its operations out of its office in Roanoke, working with designers to develop games and also designing games in house. One of its most well-known titles is Sheriff of Nottingham, which is carried by retail giants such as Walmart, Target and Barnes & Noble.
Gulloti said the role of board game publishers like Arcane Wonders is to help designers develop games and bring them to market. But there are a lot of steps in between such as settling on the game’s components (custom dice, figurines, cardboard standups, etc.), working with manufacturers and testing in the early stages of development. This is where small retailers like the Game Annex play an important role.
“Feedback from small retailers like Dawn is important to publishers,” he said. “She can tell how a game will do in the market, how it will be received.”
Game designers and publishers work with the Game Annex to extend an invitation to experienced gamers to play test games before they’re introduced to a mass market. Gulloti called the feedback “invaluable for the whole process.”
“We want to get a variety of demographics and players to try the game,” he said.
In addition to getting a first look at new board games, play test volunteers will often receive a finished copy of the game from the company and receive credit in the game’s rule book, Gulloti said.
Brissaud of Iello said the company values its relationships with small retailers like the Game Annex. Because of its ties to the gaming community, the store can give more detailed feedback than distributors and big-box retailers, he said.
“We need to know if games are well-received and if people like them, if they’re buying them or have suggestions or comments,” he said.
In addition, he said, while big-box retailers carry only the hottest titles, customers have more exposure to Iello’s products – about 50 games in total – at small retailers.
“This is where we sell the breadth of our catalogue,” he said.
Challenges in a big-box world
Avid gamers, the Studebakers opened the Game Annex in the hopes of creating a home away from home where everyone would feel comfortable – “a third place.”
“A third place is a place where you can go and hang out that isn’t your home and isn’t work and should be free of stresses,” Dawn Studebaker said.
While gamers of all levels have found a welcome space for discovering new games and socializing with others, the business model is not without its challenges. Even though the board game industry is experiencing significant growth, the small retail model is by no means a “get-rich-quick scheme,” she said.
Competition with online and big-box sales makes every day a struggle, she said.
“Mass market can out-price us any day of the week, because they shop larger, so they get better discounts,” she said.
While the Game Annex can’t compete with mass market prices, it does have one advantage over big-box and online: its level of customer service and expertise. Studebaker said they strive to listen to their customers and understand their likes. They’re able to answer specific questions about games because they’ve actually played them.
“This is service that you’re not going to get somewhere else,” she said.
The Studebakers also strive to stay on top of what’s new in the gaming industry. Dawn Studebaker has been invited to speak at the Game Manufacturer’s Association Trade Show, the industry’s biggest trade show, March 13-17 in Las Vegas, where she will talk about social media practices.
She has utilized social media to get the word out about what’s going on at the store such as new products and special events. Social media marketing helps get people in the door and provides solid metrics for the success of any given effort in the store, she said.
“No other model offers us such accurate means to track return on investment to date,” she said.
However, simply getting people in the door is only part of the equation. The success of the Game Annex relies on the sale of games, Studebaker said. While the store offers free gaming to those that want to bring their own games and an extensive game library that patrons can try before they buy, she wants people to know that supporting the space means shopping locally.
Regular customers understand this and are willing to spend a little more on a game at the Game Annex than they would online or at a big-box retailer, she said.
“They value the space, so they’ll spend a couple extra bucks because people think of it as their rental fee,” she said.