Market Analysis – 60141109 – Collaborative games

Market Analysis: Collaborative Games (UNSPSC 60141109)

1. Executive Summary

The global collaborative games market is a high-growth segment within the broader $18.9B tabletop games industry, projected to grow at a 9.2% CAGR over the next five years. This growth is fueled by consumer demand for social, "analog" entertainment experiences. The primary threat to procurement is significant supply chain risk, stemming from heavy manufacturing concentration in China and volatile international freight costs, which requires strategic supplier relationship management and potential exploration of nearshoring for key components.

2. Market Size & Growth

The collaborative games sub-segment is a key driver of the overall tabletop games market. The Total Addressable Market (TAM) for tabletop games is estimated at $18.9 billion in 2023, with collaborative titles representing an estimated 20-25% of hobby market sales. The market is projected to reach $29.4 billion by 2028, demonstrating robust and sustained consumer demand. The three largest geographic markets are 1. North America, 2. Europe, and 3. Asia-Pacific, with North America showing the strongest appetite for complex, thematic collaborative titles.

Source: Proprietary analysis based on data from [Grand View Research, Feb 2023] and [Technavio, Nov 2023]

3. Key Drivers & Constraints

1. Demand Driver (Social Experience): Growing consumer trend towards "digital detox" and in-person social activities. Collaborative games facilitate group problem-solving, making them highly popular for family and social gatherings.
2. Demand Driver (Crowdfunding Innovation): Platforms like Kickstarter and Gamefound enable a direct-to-consumer model, fostering innovation from independent designers and validating market demand for niche, complex games before mass production.
3. Cost Constraint (Raw Materials): Price volatility in paper pulp, specialty cardboard, and petroleum-based resins for plastic miniatures directly impacts Cost of Goods Sold (COGS).
4. Supply Chain Constraint (Geographic Concentration): An estimated 80-90% of mass-market tabletop game manufacturing is concentrated in China (specifically Shenzhen and Ningbo), creating significant geopolitical and logistical risks.
5. Cost Constraint (Logistics): Ocean freight costs, while down from 2021 peaks, remain structurally higher and more volatile than pre-pandemic levels, representing a major and unpredictable cost element.

4. Competitive Landscape

Barriers to entry are low for game design but high for scaled manufacturing, global logistics, and distribution. Brand reputation and access to popular Intellectual Property (IP) are significant competitive advantages.

⮕ Tier 1 Leaders * Asmodee (Embracer Group): The market leader, owning a vast portfolio of publishers (e.g., Fantasy Flight Games, Z-Man Games) and a dominant global distribution network. * Hasbro, Inc.: A toy and game giant, strong in this segment through its Avalon Hill brand (Betrayal at House on the Hill) and Wizards of the Coast subsidiary. * Ravensburger AG: A German powerhouse known for high-quality production and a strong portfolio of family-weight collaborative games (e.g., Horrified series).

⮕ Emerging/Niche Players * Cephalofair Games: Publisher of Gloomhaven, a category-defining title that demonstrated massive market appetite for complex, campaign-style collaborative games. * Stonemaier Games: Known for high-production quality and innovative mechanics, with crossover hits like Wingspan (competitive but with low-conflict mechanics appealing to collaborative players). * Gamewright: Specializes in accessible, family-oriented card and board games, including the highly successful Forbidden Island/Desert collaborative series.

5. Pricing Mechanics

The typical price build-up is a multiplier effect from the factory gate. The final retail price is approximately 4-5x the ex-factory cost. The stack includes: 1. Manufacturing Cost (COGS), 2. Publisher Margin & Royalties (Designer/IP), 3. Distributor Margin (typically 25-40% of wholesale), and 4. Retailer Margin (typically 40-50% of MSRP). Direct-to-consumer models via crowdfunding bypass distributor and retail margins but incur significant platform fees and direct fulfillment costs.

The three most volatile cost elements in the last 24 months have been: * Ocean Freight (China to US/EU): Peaked at +500% in late 2021; has since stabilized but remains ~1.5-2x pre-2020 levels. * Paper & Cardboard Stock: Increased +20-30% due to pulp shortages and energy costs. * Plastic Resin (for miniatures): Fluctuations of +15-25% tied to crude oil price volatility.

6. Recent Trends & Innovation

• M&A Consolidation (Dec 2021): Swedish gaming holding company Embracer Group acquired Asmodee for €2.75 billion, signaling significant investor confidence in the tabletop market's growth and profitability.
• Hybrid Digital Integration (Ongoing): Increasing use of companion apps to manage complex game states, AI opponents, or narrative elements (e.g., Destinies, Forgotten Waters), reducing physical component costs and setup time.
• Sustainability in Production (2022-Present): Growing pressure from consumers and publishers to reduce single-use plastics and use FSC-certified paper. Some publishers (e.g., Stonemaier Games) publicly detail their environmental initiatives.
• Rise of the "Big Box" Campaign Game (Ongoing): Following the success of Gloomhaven, there is a strong market for high-MSRP ($100-$250), content-rich collaborative games that offer 50+ hours of gameplay, creating long-term customer engagement.

7. Supplier Landscape

8. Regional Focus: North Carolina (USA)

North Carolina represents a strong demand center, not a manufacturing hub, for collaborative games. The state's demographics, with major research universities and a growing tech sector in the Research Triangle Park, align perfectly with the core consumer profile. Demand is serviced by a network of specialized hobby game stores and mass-market retailers, all supplied by national distributors like Asmodee North America. There is no significant local manufacturing capacity for scaled production; the value chain in NC is concentrated in distribution logistics and retail. The primary procurement-related factors are sales tax and the efficiency of last-mile logistics from national distribution centers.

9. Risk Outlook

10. Actionable Sourcing Recommendations

1. Consolidate Spend with a Tier 1 Distributor. Shift volume for non-exclusive titles to a primary partner like Asmodee. This leverages their scale for preferential pricing, provides access to the broadest catalog, and utilizes their sophisticated logistics network to mitigate the risk of stock-outs on individual titles. This simplifies supplier management and improves supply assurance.

2. De-Risk High-Volume SKUs via Component Nearshoring. For evergreen, high-volume collaborative games, initiate a pilot project to qualify a manufacturer in Mexico for non-IP-sensitive components (e.g., cardboard tokens, boxes, basic wooden parts). While potentially at a 5-10% cost premium, this reduces reliance on China, shortens lead times, and mitigates exposure to trans-Pacific freight volatility and geopolitical risks.