Steve Jackson Games has one stockholder: Steve. 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 who create the finished product, the volunteers who demonstrate our games at conventions and retail stores, and the folks who run game conventions.
We are, I assume the reader knows, a publisher of games. We have been in business since 1980. At the end of 2018, we had 30 full-time staff and contractors, plus a few 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 (Warehouse 23, our online store, has been online for two decades) – both physical products and digital downloads.
Last year, we had hoped that 2018 would be a better year than 2017. As written last year, perhaps "not in a financial sense – the market is weird right now, and predicting sales is tougher than ever – but at least from a completing projects and meeting deadlines standpoint . . . " In this, I think that we were correct; we shipped two big projects to the factory in 2018 – The Fantasy Trip Legacy Edition and Munchkin Warhammer 40,000 – and both reached stores on schedule earlier this year.
Gross income was roughly $5.3 million, down a few hundred thousand from 2017. A combination of staff cuts, reducing our print runs to better suit the current market, and a focus in the second half of the year on our more successful titles put us in a stronger position at the end of the year than expected.
In 2018, crowdfunding (Kickstarter, plus BackerKit for project surveys) was a larger and more significant part of our business than in earlier years. And as we watch the distribution network continue to transform, with shorter sales windows for new products, we direct more of our energy to Kickstarter where we can judge demand for a title before taking the finished work to print.
Meeting deadlines continues to be a challenge, though we did better in 2018 than in the few years before that. Part of the reason our schedule sometimes slips is our (at times) overworked staff. The most significant obstacle, though, is our insistence on getting it right over getting it done. As Shigeru Miyamoto says, "A delayed game is eventually good, but a rushed game is forever bad."
Yet again in 2018, our cash flow report saved us from potential disaster. As a rule, we do not take outside loans and operate solely on the strength of our cash-in-hand, and the regular cash flow report – as well as the willingness of our accounting team to speak up when they notice something important – is vital to our operations.
With over $300,000 in funding (and another $150,000+ during the BackerKit stage of the project), your support of The Fantasy Trip was overwhelming and very much appreciated by all of us in the office. When we announced in late 2017 that Steve had recovered the rights to the game, the response was positive and encouraging, but we had no way of knowing how many of you would then join us to make the game our most successful crowdfunding project of the year.
The Fantasy Trip went to print on schedule, started shipping to Kickstarter supporters in March 2019, and reached store shelves on schedule in April.
Better still, we've already run two more crowdfunding campaigns to support TFT (both of which are at print and on schedule), and we have a third campaign launching on Kickstarter before the end of this month. With your continued support, we'll build on the success of The Fantasy Trip Legacy Edition and bring more TFT expansions, adventures, and accessories to your table.
Between new releases – from our team as well as our partners at IDW and USAopoly – and the launch of the Munchkin Collectible Card Game, the Munchkin series had an incredible year! Here are a few of this year's highlights:
As the market changes, we are realizing that our traditional approach to publishing is a little old-fashioned. In 2018, we took steps to improve our use of crowdfunding, experimenting with games, expansions, and even game accessories to learn how we can better use Kickstarter to judge demand for an item and to make some titles much stronger than they would have been without your support.
We ran nine different campaigns on Kickstarter in 2018:
Combined (Kickstarter + BackerKit), our crowdfunding efforts in 2018 generated over $800,000. Thank you, everyone!
As a part of adapting to the new world, we worked with the Kickstarter team to open a second account in late 2018. Our two accounts (and the purpose of each) are:
These were places where we wanted a win and didn't quite get one, or where success and failure were mixed.
In July, we announced that we were shifting our focus and taking the steps necessary to distance our operations from the industry's accelerating treadmill model for new releases. As we stated in last year's report: "The current market is more a periodicals business than one that encourages growing and nurturing single games . . ." and things only got worse throughout 2018 as fewer and fewer copies of new titles were sold into distribution. This is an industry-wide issue; we've discussed the problem with several of our friends, and most of us are watching as demand for new games continues to drop.
As part of the change, we were forced to let some talented and hardworking staff go. Additionally, we announced to our team that any who wanted to search for a new position elsewhere would be given the support (and recommendation letters) that they requested. It was sad to see so many capable employees move on, but we're happy to see them continue to improve their skills and industry knowledge with other publishers.
The good news is that, even though we are short-handed at times, our staff has come together and we're a stronger company than we were at the start of 2018. Communications have improved, we're seeing fewer tasks fall between the cracks, and some departments are more effective than they were with larger teams.
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:
We accomplished three of our four 2018 priorities, so this year we'll set only three priorities and see how well we do. Wish us luck!
Over the last few years, our core hobby market has changed dramatically. The old tools and procedures we used to calculate print runs, the resources we turned to when determining which new games to print, as well as the majority of practices we followed to function within the market . . . all are less applicable today than they were in 2015 or earlier. We are doing our best to adjust so we can keep bringing you great new games.
– Phil Reed
|Top 40 Products by Dollar Volume|
|1.||Munchkin Deluxe||21.||Illuminati Second Edition|
|2.||Munchkin||22.||Munchkin CCG Introductory Set|
|3.||Munchkin CCG Core Booster POP||23.||Munchkin 9 - Jurassic Snark|
|4.||Munchkin Deluxe ( + CGG Boosters Special Assembly)||24.||Munchkin CCG Fashion Furious POP Display|
|5.||Munchkin Starfinder I Want It All!||25.||Ogre Miniatures, Second Edition Rulebook|
|6.||Munchkin 2 – Unnatural Axe||26.||Munchkin Cthulhu|
|7.||Munchkin CCG: The Desolation of Blarg POP||27.||Munchkin Apocalypse|
|8.||Munchkin Mass Market Edition||28.||Ogre Battle Box|
|9.||Ogre Miniatures Many Minis||29.||Munchkin Crazy Cooks|
|10.||Super Kitty Bug Slap||30.||Munchkin Zombies|
|11.||Zombie Dice||31.||Zombie Dice Horde Edition|
|12.||Munchkin CCG Wizard & Bard Starter||32.||Munchkin Magical Mess|
|13.||Munchkin CCG Ranger & Warrior Starter||33.||Munchkin 5 – De-Ranged|
|14.||Munchkin CCG Cleric & Thief Starter||34.||Munchkin 6 – Demented Dungeons|
|15.||Munchkin 3 – Clerical Errors||35.||Munchkin Unicorns & Friends|
|16.||Munchkin Deluxe (Book Trade Assembly)||36.||Munchkin 7 – Cheat With Both Hands|
|17.||Munchkin 4 – The Need For Steed||37.||GURPS Basic Set: Characters|
|18.||Munchkin Shakespeare Deluxe||38.||Munchkin Pathfinder|
|19.||Conspiracy Theory||39.||Star Munchkin|
|20.||Triplanetary||40.||Munchkin 8 – Half Horse, Will Travel|
NOTE: Munchkin Deluxe appears three times in our top 40. We produced a special run of the game at the factory that included CCG booster packs and marketing, and a special assembly for the book trade. The core game is identical in all three instances; only the bonus items and marketing material are different across the three variations.