Diamond Signs Major Gaming Exclusive

ICv2 has coverage:

WizKids Games is announcing today that its products will be exclusively distributed through Diamond Comic Distributors and Alliance Games Distributors [a Diamond company] for the hobby channel, effective immediately. Purchase orders from distributors other than those two companies for three products in the pipe will be honored if those distributors choose to receive the products: HorrorClix: The Lab Expansion Packs, DC HeroClix Origins, and Pirates of the Frozen North.

Why would WizKids do this? Although ICv2 mentions more certain payments from distributors, WizKids gives an example of increased efficiencies. (I find the money explanation more plausible, myself, since that’s what the latter justification boils down to as well.)

WizKids currently produces 12,000 posters for each of its new products, in order to cover 2500 to 3000 stores. Under the new system, it will be able to produce 3,000 posters and be assured that each retailer will receive one.

Oh, well, then, that makes perfect sense. Retailers who get better discounts from other distributors or prefer the service they get elsewhere are out of luck, although WizKids is “hoping to win them over. We have a series of promotions that we’re going to be announcing over the next two months on a regular basis that will be of great interest to retailers.”

Here’s one of those retailers, upset at the changes:

We used to get better pricing from other distributors, so there will go our discounts. Plus, one of my distributors delivers and the other is fairly close to our store, so my shipping is free or very inexpensive when I order this stuff. Now the closest ship point is in Indiana, so it’s going to cost me more for shipping too.

Sounds like a net loss for them. At a time when physical retailer locations are facing increased competition from online discounters, I would think game makers would want to support existing stores, not annoy them and risk driving them away from the product.

Update: ICv2 has a lot more coverage:

  • Additional retailer reaction disliking the lack of choice: they

    “found many benefits to dealing with multiple distributors because of allocations on product releases. Now, because of this exclusivity on WizKids, my shop will have no choice but to sit back and lose sales by being forced to await the pleasure of Alliance & Diamond when allocations occur, instead of having the capacity to purchase the product from another distributor and keep the product in stock at DreamStrands.”

  • An interview with WizKids’ president and executive VP where they talk about trying to restrict internet sales and how they’re thinking long-term while admitting they don’t know what this will mean short-term.
  • Reactions from the other distributors now shut out. They’re not happy, obviously, and they predict some stores may stop carrying the product. There’s also sniping about WizKids’ sales dropping and the company perhaps becoming desperate. “All noted that the effect on their businesses would have been a lot more dramatic a couple of years ago, when WizKids’ sales were flying high.”
  • A short interview with Diamond VP Roger Fletcher, who emphasizes trying to cut out internet stores.

    “Alliance’s terms of sale require a brick and mortar storefront to become a customer. Diamond’s do not specifically prohibit Internet-only retailers, but we’re taking steps to implement changes for WizKids products. In the case of specific Internet companies, if WizKids brings specific businesses to our attention, our systems have the ability to prevent them from buying WizKids products.”

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