Friday, September 22, 2006

Risk Management: The Experiment

I had a great idea this week that I really want to try out. While listening to “The American Advisor” this week I heard Joe Battaglia say something that really struck me. He was talking about the world’s energy situation and how we are all in trouble because we’re all so dependant on oil for fuel. He mentioned how important it is that we, as Americans, be innovative and creative in our way of thinking. He said that it’s time to try new things and to come up with new ways of doing things rather than depending so much on the old techniques and resources that have become so hard to come by in recent times. Well, it got the wheels turning in my head. Not necessarily about the fuel crisis, but about doing things in new and innovative ways.

I had an idea for a game a little while ago and, having been through the game production process before, I know that the likelihood of me, a novice, introducing a new game to the market is VERY slim. I tried this before with my game “ABC’s & Penalties” and immediately lost $200. I had developed the game through the prototype stage and had submitted it to a company who charged a $200 fee to review your game idea and then tell you whether or not they are willing to pick up the project and add it to their inventory. At the time I knew nothing about the industry and how it all worked. I was VERY excited when I sent off the submittal, and a bit deflated after receiving their review of it. They told me that my game as not novel enough and that it had too many similarities to games like Scatergories. Fair enough, they’re the experts. That $200 investment didn’t go wasted. I didn’t lose anything on this deal. I learned a very valuable lesson. Not that my idea was bad, or even good for that matter. I didn’t learn NOT to trust companies like this one. What I learned was that I need to manage my risk better. You see, in this example, I was putting my own hard-earned money into the hands of other people and hoping that they would see my game the way I saw it. I was hoping that they would see the potential of my idea and then run with it. It wasn’t a mistake for me to invest in this idea. The mistake was in how I invested in it. The mistake was putting all my hopes into the hands of someone else. The problem with this is that my chances of success were completely out of my own control. By investing my money into the opinions of a handful of people, I was basically putting $200 on the gambling table and hoping to be dealt a good hand of cards. Who knows what the odds were? 50/50? They either take it or they don’t, right? No, I think the odds were worst than that. Who knows how many other games were competing with mine at that particular time for that particular niche? Who knows what sort of mood the reviewers were in?

This time, however, I have an idea. I’m going to perform a little experiment in the control of my investing odds. I’m going to try a completely new method of gaming production. I’m going to create this game in a way that, as far as I know, has never been done before. If I am successful my odds will increase because of the control I’ve taken in the management of my risk. Whether I win on lose money will still be a consideration, but only I will be responsible for that outcome. If I earn money with my new game, it will be a direct result of MY efforts in it’s development and marketing. If I don’t earn any money, it will be a direct reflection of my lack of efforts in development and marketing. My objective: To see if I can successfully control my level of risk in an investment. The tool: My newly conceived game.

Challenges…

One of the biggest hurtles for an inventor of a new game is in the creation of a working prototype. This can represent a financial and physical challenge. My idea will virtually eliminate this obstacle. Another challenge with getting a new game into the market is the task of finding a well established, trustworthy, and fair company to review and then accept the new game. My idea will eliminate the need for anyone’s approval (other than the buyers themselves). Obviously the final challenge, which can have a very heavy impact on the overall success of the project, is to have a game that people will love to play. In concept, my game offers a wide range of playable ages, will be great for a large group, and is very simple to learn and play.

My strategy…

Most games that a group of people can play can cost anywhere from $10 to $30. There are a lot of exceptions, of course, but that is pretty typical. The reason for this cost (aside from the creating wanting to make a profit) is to make up for production and advertising costs. My game idea is really unique. It’s a game that will be downloadable from my website. Rather than paying for my production and advertising costs indirectly, I’m going to eliminate as much of those costs as possible so they don’t have to be recuperated later through high priced sales. In fact, because there are virtually NO costs involved in my game, my sales prices will be ridiculously low. So low, in fact, that the mere sales price ITSELF will be a factor in my advertising. The more inexpensive the game is, the more of a thoughtless decision it should be to try it out. Most people can afford to pay $3 to $5 for ANYTHING. I would think that many people would purchase it just to see how good the game is out of pure curiosity. There are a lot of people, after all, who spend more for less.

Here’s the novelty of my idea…. ready? My game is mostly downloadable. No expensively made boxes, boards, cards, or dice. The game will have instructions, rules, and playing cards that can be, cut out, and then laminated if desired (for durability). These cards can be printed from a simple PDF file sold on my website. The game does require some physical playing pieces, but in my instructions, on the website, it will be explained that each of these physical pieces can be gathered from other games that folks might already own. Names of games that contain necessary pieces to play my game will be listed so that people can check to see if they have all the required pieces. Fortunately, most people who like to play games tend to already have collections of other games, which facilitates my idea. Basically what I’ve done is create an IDEA for a game, develop it only partially, and supplement it with existing gamers’ work. I’m capitalizing on physical games that have already been made. No production costs for me translates into no expenses passed onto buyers of my game.

The phases of completion…

Phase I - Develop game on paper
(establish rules of play, decide on playing pieces, work out a Q & A page)

Phase II – Create a cost-free prototype
(Virtual & assembled game pieces, and PDF file)

Phase III – Game testing
(Play with test groups to work out the bugs and evaluate levels of interest)

Phase IV – Develop online interface
(i.e., create webpage, download-selling software, etc.)

Phase V – Market testing
(Experiment with family & friends)Phase VI – Public launch (Marketing and advertising)

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