8 March 2018 | 75 Comments
Last year, as inspired by Steve Jackson Games, I released our first stakeholder report. A “stakeholder” in Stonemaier Games is anyone who has an impact on our company and a stake in our success, whether it’s employees, contractors, fans, retailers, distributors, volunteers, artists, designers, backers, readers, etc.
I received the 2017 K-1 tax document from our accountant earlier this week, so it’s time for this year’s stakeholder report. As usual, there’s a lot of information, but I’ll try to break it down into various sections.
2017 Revenue and Personnel
We use the accrual method for accounting (expenses and revenue count in the year when we ship the products to the customer). 99.9% of our sales in 2017 were to distributors.
- Revenue: $7.1 million
- Full-time employees: 1
- New games: 1
- New expansions: 2
- Crowdfunding campaigns: 0
For comparison, revenue was $3.5 million in 2016. However, our profit did not double in 2017, as manufacturing (Panda) and shipping (OTX) continue to be monumental costs for us, and we haven’t let any of our products go out of print. So a significant portion of our revenue is simply reinvested in reprints. We were profitable, though.
We have no debt, nor did we take any loans in 2017. We did, however, offer distributors the opportunity to pre-pay for our big holiday print run, as we don’t have millions of dollars in cash just sitting in the bank.
I (Jamey) am still our only full-time employee, and Alan and Morten work a combined 10 hours a week. We use a LOT of independent contractors, though (artists, graphic designers, web devs, proofreaders, playtesters, etc). I own 90% of the company, and the rest is divided between a few key parties.
We also continue to contract Greater Than Games to provide warehousing and distribution brokerage for our products. I still run Stonemaier Games out of my home office, which is also in St. Louis. I like having a 5-second commute from bed to desk.
We have a number of different SKUs (expansions, accessories, promos, realistic resources, etc), but our core products are 5 games. The quantities below are the lifetime units in circulation for each game in any language as of the end of 2017, and the BGG rankings are as of today.
- Viticulture: 54,780 (BGG rank: 19)
- Euphoria: 31,000 (BGG rank: 312)
- Between Two Cities: 36,900 (BGG rank: 475)
- Scythe: 147,678 (BGG rank: 8)
- Charterstone: 56,500 (BGG rank: 98)
Our margins continue to be a little less than what we need for long-term stability. That is, while industry norms are for a game’s MSRP to be 5x-7x a game’s manufacturing cost, some of our games are 4x the manufacturing cost (e.g., Scythe probably should be a $95 game, and Charterstone should be an $80 game). I’ll continue to keep the consumer in mind in terms of price and component quality while ensuring that our margins are good enough to stay in business.
Our strategy continues to be to release 1-2 new games and a few expansions each year. So far, 4 of our 5 games were designed by me, but our next 4 games were designed by other designers (though I’ve had a hand as a developer in all of them).
Social Media and Other Metrics
These numbers are as of today.
- e-newsletter subscribers: 33,280 (55% open rate)
- Facebook fans: 13,958 (though most interactions are in our Facebook groups, which have over 20,000 members)
- Twitter followers: 9,262 (40% increase)
- YouTube subscribers: 6,036 (98% increase)
- Instagram followers: 2,133
- Stonemaier Champions: 188
- ambassadors (active volunteers): 1,686
- retailer/distributor mailing list: 547
- international localization partners: 25
- website Alexa ranking: 103,546 (avg. 5094 views per day in 2017)
- Stonemaier Games Design Day attendees: 85
- game submissions (including Gen Con): 184
- funds raised by annual charity auction: $11,150
- number of cats (full time): 2
I’m happy with these numbers. I mostly look for steady growth from year to year without manipulation (I don’t run contests or giveaways to get people to subscribe–I only want people to subscribe if they’re genuinely interested in the content), and that seems to be happening in all areas where I’m interested in growth.
- Between Two Cities: Capitals expansion (May 2017)
- Legendary Box (December 2017)
- Scythe: The Wind Gambit expansion (December 2017)
- Charterstone and the Charterstone recharge pack (December 2017)
As you can see, our 2017 was extremely backloaded. That is not my preference–I’d rather new releases be spread out a bit for the sake of our cash flow, consumers, and retailers. This wasn’t the plan, but some pre-production and manufacturing issues bumped Charterstone back several months from the original estimated release month.
Biggest Changes and Mistakes
Many of the changes I discussed in this section of the 2016 stakeholder report still feel new to me, so I’d recommend looking at that if you’re curious. Here’s the new stuff.
- Too much wood: In a November blog post I talked about some of the implications of our 200,000-unit holiday print run we initiated in May 2017. One thing I didn’t mention is that we ordered so much wood all at once that the factory couldn’t keep up, causing a significant delay in our flagship product, Scythe. In the future I’ll spread out print runs more, communicate priorities better with our manufacturer, and I’ll start the holiday print run even earlier (I’m literally starting our holiday print run in 2 weeks–yes, in mid-March I’m starting to print games that I expect to sell to distributors for November/December retail sales).
- Co-designs: Several times in 2017–for both Scythe expansions and for the unannounced Viticulture expansion–fans of our games created the early stages of expansions, posted them either on social media or privately to me, and we ended up working together to design the expansion. I found that I really enjoyed this collaborative process, specifically for expansions.
- Playtesters (quality over quantity): We’re lucky to have a lot of people who are willing to blind playtest our games, but this was the first year I embraced the idea that I‘d rather have (and pay) skilled playtesters than have a mass of semi-useful feedback.
- Submissions: A huge part of my co-founder’s job now is to review submissions, for which we only had limited capacity in the past. I created a detailed form for designers to fill out that details exactly what we’re looking for.
- Job applications: Even though we don’t have any available positions, I realized that I may be missing out on quality applicants if I didn’t have a place for people to apply for a job. So we now have a job application where anyone can tell us how they think they can make Stonemaier better (though I’ll reiterate that I think by far the best way to get your foot in the door in the game industry is to start by volunteering).
- Acquisition: For the first time in Stonemaier history, a company kind of tried to buy us! It was quite a surprise, and even though it wasn’t something I was interested in, it was interesting to learn a little about the process in case it’s something we want to consider in the future (either as the buyer or the seller).
- S-Corp conversion: I’m not an accounting guy, so I still don’t fully understand the difference between an LLC (which we were) and an S-Corp (which we now are), but all I know is that it’s supposed to be better for us tax-wise. If you feel like you pay half of your profit in taxes, consider talking to your accountant about a conversion.
- Website Home Page: Our excellent web designer, Dave Hewer, revamped our home page.
- Release Dates: This was the first year we really had ironclad release dates. As you can see in this article, I think the implementation can be improved by all parties involved, and this year I’m going to try to do my part and get games to distributors at least several weeks before the release date.
- Legendary Box: I attempted to sell a product–a big empty box for Scythe–directly through a few different retailers around the world instead of through distributors so I could make the MSRP lower. This ended up frustrating retailers and distributors, as well as consumers who wanted to buy from a specific store. So if/when we make more of these, they’ll be priced for selling to distributors.
- Localization partners: We’re fortunate to have some fantastic international publishing partners to extend our reach to people who speak other languages around the world. We’ll continue working with them, but instead of holding up the English version of the game by 2 months until the translations are ready (as we did with Charterstone), we’re going to proceed with an English first print run, followed by an international second print run a few months later.
- Still No Digital: Every year for the last few years I’ve said that this will be the year that we finally have a full-AI digital port of one of our games…yet it hasn’t happened. It’s not due to lack of effort–there have been developers working on these games. It’s just that they’ve taken much, much longer to create than I was originally told. I’m confident Scythe will finally be available via digital port in 2018, followed by Viticulture and Charterstone in 2019.
- New Releases: We plan to release 2-3 new games in 2018, 2-3 new expansions, and 2 new accessories in 2018. We also created 3 new realistic resource tokens that are available for pre-order from Top Shelf Gamer.
- In the Works: I’m currently designing 3 games, all of which are completely different than anything I’ve done before. One involves an IP. They’re currently all potential 2019 releases.
- Revenue: I suspect that our overall revenue may go down in 2018, and I don’t think that’s a bad thing. There were just a few points in 2017 where cash flow dipped precipitously low due to the cyclical nature of making and selling games, and always want to be able to pay our partners right away. This means more conservative print runs, fewer reprints, and less risk.
- Announcements: I’m trying–somewhat unsuccessfully so far–to announce new games about 1-2 months before their release dates (unlike with Charterstone, which had a huge gap between announcement and actual release). That way you can get excited about something new and actually have it soon afterwards while still having some time to budget.
- Stonemaier Champion: As announced last week, we finally created a way for the people who read this blog and listen to my YouTube channel can financially support that content (while getting some special perks for their contribution).
- Facebook Live: So far, 2018 has been the year of live video. It’s a format I was late to embrace (similar to Instagram), but I now have a good rhythm of hosting a live chat every Wednesday at 10:00 am on our Facebook page. The engagement has been awesome, so I’ve even started scheduling our monthly e-newsletter so I can be live to chat about it on Wednesday immediately after sending it.
- Gen Con and Gen Can’t: This will be the first year that we have both full use of a conference room and a big booth (shared with Meeplesource) at Gen Con. Conventions still aren’t part of our marketing strategy, but it still seems prudent to attend Gen Con. If possible, this year we’re going to send some pre-release copies of our Gen Con releases to retailers who run “Gen Can’t” events and want to feature those games. I might explore that “pre-release” concept even beyond Gen Can’t.
- No Kickstarter or Pre-Order Campaigns: While we’re still applying everything we learned from Kickstarter to create what we hope is a good experience for our fans, we’ll continue our strategy of not using Kickstarter (it’s been 2.5 years since our last campaign). Here’s why.
If you want to express your opinion/desire for anything we’re creating or considering, please fill out our future printing request survey.
I want to continue to learn, make mistakes, experiment, and listen to our stakeholders. Thank you for challenging me in healthy, constructive ways in 2017, and I look forward to experiencing the rest of 2018 with you.
Do you have any thoughts, observations, or questions about this report? Please let me know in the comments.