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Report to the Stakeholders for 2013

by Steve Jackson

Steve Jackson Games Incorporated has one stockholder: me. But many people have a stake in our success. Our STAKEholders are our employees, our distributors and retailers, and, of course, the people who play our games . . . as well as the freelance artists and designers we work with, the printers who create the finished product, the volunteers who demonstrate our games at conventions and retail stores, and the folks who run game conventions.

We try to stay in touch with our stakeholders. Most of our communications nowadays are via Internet: our Daily Illuminator blog, our Twitter and other social media, our forums, the web pages for our games, and the letters that go to the 200+ people and companies to whom we pay royalties. And, every year since 2004, I've written an annual report not unlike the "report to the stockholders" that you'd expect from a public company. This is it.


We are, as I assume the reader knows, a publisher of games. We have been in business since 1980. At the end of 2013 we had 43 full-time staff and contractors (and now we have a few more), plus several part-timers. Most of our line consists of card games, boardgames, dice games, and RPGs. We sell through hobby distribution, the mass market, and direct sales (both physical products and digital downloads).

A Note on Timing

This report covers 2013 and reports our 2013 figures. Because I went through a bit of personal dislocation (more on that below), this report is extremely late, so bits of it reflect my current perspective, in mid-August of 2014.

2013: Executive Summary

2013 was another really good year. That's seven in a row. Seven! And once again, we beat our own record: our gross income was over $8.8 million.

(An important note here: Last year's report cited our gross income as "just over $7 million." This included close to a million dollars from the Ogre Kickstarter. It turns out that, because the project was fulfilled in 2013, the income should also be recognized in 2013. So THIS year's gross includes nearly a million of Kickstarter support, and LAST year's report has been updated to add this explanation. If you remove the Kickstarter from both years and consider only income from "normal" operations, then the trend line becomes $6.1 million for 2012 and just under $8 million for 2013.)

The reasons are very much the same as last year:

  • We kept our core Munchkin sets in print almost all the time, even though they kept selling out. The Munchkin line, including the Munchkin Quest boardgame, accounted for over 75% of our sales. Munchkin is now available in 16 languages.
  • We continued to create a lot of new Munchkin material.
  • Sales of dice games stayed strong, accounting for 7.6% of total sales. Zombie Dice was again our #4 item ranked by dollars, and our #2 in units sold.
  • We continued to offer GURPS support, mostly in PDF form. There were 20 new PDFs and a few reprints. For more detail, see Kromm's full GURPS report.
  • Our management team, led by COO Phil Reed and Director of Sales Ross Jepson, and our Munchkin team led by Czar Andrew Hackard, continued to make me proud.

Ogre: Kickstarted The Ogre Kickstarter

This project launched in 2012, with supporters pledging $923,680. After much travail, it shipped in 2013.

If you want all the details, visit the Kickstarter page, with its (currently) 156 updates.

The summary: The final Kickstarter version of the Ogre Designer's Edition weighs 25.6 pounds in its shipping carton; the box is 24.25" by 20.25" by 6.75". (Those numbers do not include the shipping carton!)

There were a lot of heroes here as the product lurched forward; I have to single out Phil Reed and Sam Mitschke for special mention. Among other things, they flew to China to get face time with the printers! Our whole production department also worked wonders. Constant wonders.

To help get the project to print, and to manage the Ogre line afterward, we brought in Daniel Jew as Line Editor. He did a fantastic job, and unfortunately had to step away for personal reasons. But good personal reasons – he became the father of twins!

The project had 5,512 backers, the majority of whom were very polite and understanding about the delays. We learned a great deal about doing crowdfunded projects, which is why we have not jumped into another. But we do plan to crowdfund a new edition of Car Wars. Work is proceeding.

2013: The High Points

Munchkin Again!

Munchkin rules.

  • The 2013 print run of core Munchkin was 130,000.
  • Booster packs continued to be popular. We like this, because it gives us the chance to do a lot of fun themes, including licenses, that would not justify a whole box of cards.
  • We ran the Munchkin Tavern at Gen Con, and it was such a success that we did it again in 2014 at both Gen Con and Origins.
  • The Deluxe versions of the Munchkin games are growing in popularity. Sales of the core set were actually down a bit this year, but sales of Munchkin Deluxe were almost 50% higher, for a definite net increase.
  • We signed three important outgoing licenses: to USAopoly to use the Munchkin name and mechanics for an Adventure Time version, to Alderac for a Love Letter re-skin to be titled Loot Letter, and to Fireside Games for Munchkin Panic, which will be a new game based on their hit Castle Panic with some new Munchkin-ized game mechanics.

Power! Power from the SUN!

We installed solar cells on top of our office building, our warehouse, and a new parking structure. This was not cheap – it set us back more than $400,000 – but between tax considerations, the near-erasure of our own electric bill, and the sale of power back to the utility when the sun is high, we hope for a payback in 7 to 8 years. I am working on a long report about this, featuring lots of details and real numbers, for those of you who are thinking about solar for your own homes or businesses. One thing about the current Texas heat: it's cranking out the power!

Other Very Good Things

  • We finally got Castellan, a great game, out of the pipeline and into the stores. It represented more than 1% of our sales for 2013, which may not sound exciting, but is pretty good for something without Munchkin in the title.
  • We are now represented by Surge Licensing, and they're doing great things for us.
  • We have covered parking in the back parking lot, and an automatic gate.

Munchkin Legends Mass Market Sales

The mass market continued to grow in importance for us. You can now find several of our games – not just Munchkin and Zombie Dice – in Target, Barnes & Noble, Walmart, Go! Games, Calendar Club, Books-A-Million, Hastings, Chapters Indigo in Canada, Amazon, ThinkGeek, Entertainment Earth, and Toys 'R' Us.

Warehouse 23

Early in 2014, we launched the long-awaited Warehouse 23 shopping cart, which lets customers get both physical and digital items in the same order.

As of now, it's still buggy. Work continues.

We have retired the e23 store name, since the stores are no longer separate.

We also added new PDFs from Atlas Games, Amarillo Design Bureau, Pelgrane Press, 0one Games, and other publishers. The Atlas and ADB releases were especially successful.

Business Organization

Our business organization remains reliable. Our financials and royalty payments have stayed up-to-date for years. Our cash flow report is now routine.

We still need a formal budgeting process. We have no advance budgeting here; we get by on a few ancient but effective rules of thumb, diligent cost accounting, and a dash of paranoia. And, as we grow, this ad-hoc approach is less and less practical. We know perfectly well that sometimes we waste money by doing unnecessary things, by doing necessary things too late to do them cheaply, and by repeating work.


We have a bigger staff than ever before, yet there is very little "fat." We have a lot of good people working hard and doing neat stuff, and we all try to deserve each other.

As in the last few years, we had two "office closed, but everybody gets paid" weeks – one in summer, one at the end of the year. We always have at least two paid Game Days in the office.

As of 4th quarter 2013, we instituted a profit-sharing plan: basically, 5% of pretax profit, with all full-time staff and contractors getting equal shares, and half-time people getting half-shares. This will replace the former staff-wide bonus checks, but there will still be extra bonuses for awesome performance.

Ehhhhh . . .

These were the places where we wanted a win and didn't quite get one, or where success and failure were mixed.

GURPS Zombies Web Store Improvements

. . . launched early in 2014, more than a year late, and were surprisingly buggy considering that we were modifying the existing Spree package rather than starting from scratch. There's clearly room for improvement in our IT procedures here, and, to be completely honest, we don't know where.

Calculated Sloppiness

In many ways, we are spending money stupidly because of the success of Munchkin. It's often not worthwhile to be perfect at everything; sometimes it's more cost-effective overall to do some things just any old way and save the effort and brainpower for Munchkin. This makes me unhappy because I hate waste, but face it: Diminishing returns are still returns. We're better off in the long run if we focus on what keeps Munchkin strong and successful. As long as release quality remains high (I don't just mean Munchkin, but everything we do), it's actually smart management to recognize that some things can slide. But I still don't like it.

GURPS Support

We shipped only one hardback in 2013: Sean Punch's GURPS Zombies. As described above, there was also a lot of new PDF material.


  • Our pipeline remains over-full. Many games, including some outside submissions we liked, are sitting on the shelf in 90%-finished condition – some because we don't see a current market for them, but more because we just haven't quite gotten them to click. We are definitely not open to further outside submissions until we deal with the ones we have, and that's going to take a while.
  • We kept spending (small amounts of) money to maintain UltraCorps, but not only has it not launched, it's not likely to launch in 2014 either.
  • We still have no budgeting system. Every thing is ad hoc.

Personal Disaster

On Halloween Day, Austin's Onion Creek reached a level of 41 feet, where 17 is considered "flood stage." This devastated an area that the city had known was flood-prone, and had meant to deal with "real soon now" for several years. (Bitter much, Steve?) At any rate, my home was totaled. Monica Stephens' home would also count as totaled if it were on the right side of the city's imaginary line. As is, the city may or may not do anything for her neighborhood.

I woke up with several inches of water in the house, grabbed my computer and meds, made my way through a couple of blocks of what was by then chest-deep, fast-flowing water, and was picked up by a rescue boat. Monica, fortunately, was working late and missed the whole deluge. For more, see the Illuminator that I posted the next day. The property losses were significant, but I'm thankful that Monica and I are okay. Not everyone was. Six people died, three very near our homes.

Nevertheless, I was completely useless, professionally, for several weeks while moving things into a storage unit and finding a new home. (Huge thanks go here to Dave Brown, who put a roof over my head for nearly a month.)

And my new house is still full of haphazard boxes and mostly unfurnished except for what the previous owners left, and I'm still not caught up with anything, and the slightest unexplained sound of water draws my complete attention.

Which is a big part of the reason that, starting ASAP, I'm officially going to take about six months off. Phil will run the company (he's been doing it for months already), Andrew will run Munchkin, Gail will run the numbers, and I expect them to try some things that I would not have tried. I expect they will succeed most of the time, too. And I hope that when I come back, I will be a bit shinier.

Yes, that means that Phil will write the report for 2014.

State of the Industry

2013 was a busy year, though it mostly played out trends from 2012.

  • Kickstarter Crowdfunding – not just Kickstarter, but IndieGoGo, Patreon, Subbable, and others – remained a driving force for game publication, so much that there's no point in listing significant projects. There were just too many! Games were, by a large margin, the #1 category for Kickstarter in 2013.
  • A new "TSR" was started by a group including the family of the late Gary Gygax, and released its first two issues of Gygax Magazine. (Up to four as of this writing!)
  • Apps for boardgames became "legitimate" on BGG and other forums. This is great; it got a lot of people playing true boardgames that happened to be hosted on a device rather than a table.
  • Big conventions got bigger. Gen Con saw a large attendance increase. PAX Australia made its debut.

Shared Goals and Partners

The game business is a network, and the healthier it is, the better for all of us. SJ Games continues to value, and rely on, its hobby-industry partners. These include:

  • the distributors with whom we have flooring contracts, making it easier for retailers to carry our full line;
  • PSI, our fulfillment agent for other distributor sales;
  • Surge, our licensing agent;
  • the many overseas publishers who are translating Munchkin and other games;
  • the domestic publishers who are licensing characters or mechanics from our games, especially Munchkin;
  • Adventure Retail, which represents us at Origins, Gen Con, and other major conventions;
  • the increasing number of other game companies that license titles or game mechanics both to and from SJ Games;
  • the convention organizers who showcase our work, and the dedicated hobbyists who serve as Men In Black to demonstrate our games at retail stores and conventions;
  • GPI, which does most of our printing;
  • the chain buyers who are helping move hobby games into the mass market;
  • and the publishers, small and large, who distribute their digital products through Warehouse 23.

Priorities: 2013 Report Card

We set six priorities for 2013:

  1. Keep our Kickstarter commitments: ship Ogre and get the Car Wars redesign off to a good start. Partially done. Ogre shipped, and fans were delighted, but some of the stretch-goal promises remain to be kept. Car Wars design is underway, with veteran Scott Haring at the helm.
  2. Did we level up? Keep most of the core Munchkin sets in print. To control our own inventory and the retailers', we will let some of the slower-moving core sets go out of print for a few months at a time. Zombie Dice has to stay in print, too. Done! And very well!
  3. Ship a lot of new Munchkin releases in a variety of formats. Also done, very well!
  4. Improve our communications with both fans and retailers. With Ben and Birger in place, and a Community Manager high on the need-to-hire list, that can happen. We hired a Community Manager in 2014, and things are improving, but we have not quite hit this ball out of the park. Further work needed.
  5. REALLY finish the upgrade of our website and online store. Not done. It finally launched, but it was very buggy. As of August we have two full-time employees, and part of two others, still working on fixes.
  6. Consider plowing some of our Munchkin income back into the hobby by acquiring other companies that have games we like. If we make such a deal, do it well. Done, but more "considering" happened than actual acquisition. We bought the excellent Chupacabra from Haywire Games, but none of the whole-company acquisition discussions has yielded anything that we can discuss in public. Yet.

Priorities for 2014

Here's what we decided to do at the beginning of the year, more than six months ago. After each one, I'll report in parentheses how we are doing as of August 2014.

1. Keep most of the core Munchkin sets, plus Zombie Dice, in print. To control our own inventory and the retailers', we will let some of the slower-moving core sets go out of print for a few months at a time. (Because Munchkin sales keep getting stronger, keeping things in print has taken a lot of work, but Phil and his assistants have so far batted close to 100%. We just reprinted Munchkin Fu, Munchkin Impossible, and Munchkin Quest, each of which had been out of print for some months.)

2. Ship a lot of new Munchkin releases in a variety of formats. (That's going very nicely, and we have announced some great outgoing licenses, too.)

3. Debug Warehouse 23 and work on other site improvements. (In progress; I wish it were going faster.)

4. Meet our remaining Kickstarter commitments for Ogre support. That includes serious progress on Car Wars. (Some Ogre commitments met; too many are unmet as of this moment. Still working. Car Wars is coming along well.)

Everything else is a non-priority, something to do if the priorities are under control.

Thanks, as always, for your support.

– Steve Jackson

Top 40 Products by Dollar Volume
1.Munchkin21.Munchkin Booty
2.Munchkin Deluxe22.Munchkin 5 – De-Ranged
3.Munchkin Legends23.Munchkin 7 – Cheat With Both Hands
4.Zombie Dice24.Illuminati
5.Ogre (Kickstarter Edition)25.Munchkin Game Changers
6.Munchkin Zombies26.Castellan
7.Munchkin Apocalypse27.Chez Geek: House Party Edition
8.Munchkin 2 – Unnatural Axe28.Munchkin Zombies 2 – Armed and Dangerous
9.Ogre (Designer Edition)29.Munchkin Holiday Surprise
10.Munchkin Cthulhu30.Munchkin Conan
11.Munchkin 3 – Clerical Errors31.The Good, the Bad, and the Munchkin
12.Munchkin Pathfinder32.Zombie Dice 2 – Double Feature
13.Munchkin Quest33.Munchkin Level Playing Field
14.Munchkin 4 – The Need for Steed34.Munchkin 6 – Demented Dungeons
15.Star Munchkin35.Munchkin Unnatural Axe (B&N Exclusive)
16.Super Munchkin36.Munchkin Dragons
17.Trophy Buck37.Munchkin Axe Cop
18.Munchkin Bites!38.Castellan International
19.Ogre Canvas Bag39.GURPS Basic Set: Characters
20.Munchkin 8 – Half Horse, Will Travel40.Munchkin Tricky Treats

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