This is straight from the Gen Con web site. Gen Con So Cal is no more. I have gone To Gen Con Indy for the last three years and had plans of one day going to Indy then So Cal later in the year. Oh well so much for that plan. Anyway here's a letter from Peter D. Adkison, owner of Gen Con.
The End of Gen Con So Cal
An Open Letter by Peter D. Adkison
January 25th, 2007
This week we are announcing the closure of Gen Con So Cal. The last So Cal will have been the one we just ran in November of 2006. This event will not happen in 2007, nor is it likely to happen in the foreseeable future. The purpose of this letter is to share some of the background in this decision for those of you who like to know the behind-the-scenes scoop, including an overview of the last four years of the Gen Con business leading up to this decision. This is not “news”, see our press release for the facts. This is more like a blog entry, an open letter to anyone who’s interested in a brief history of the last four years of Gen Con, why we started Gen Con So Cal in the first place, and why we have to now abandon this effort. Feel free to forward this letter to whomever you like, but only in its entirety.
I acquired the Gen Con brand and its various shows around the world in May of 2002, nearly five years ago. I’ve been a fan of Gen Con since the first time I went, back in 1992, as a first-time exhibitor and first-time attendee. Our booth was, of course, Wizards of the Coast, and this was before Magic: The Gathering. Our products then were The Primal Order and Talislanta, two excellent RPG lines, particularly during those days, and we had a ton of fun promoting them. So much fun I became a fan for life of Gen Con and have not missed the show since.
In 1997, while I was CEO at Wizards of the Coast, we acquired TSR, the publishers of Dungeons & Dragons. While D&D was certainly the prize, I was tickled pink that Gen Con came along as part of the package. To celebrate the new ownership we organized the first Gen Con block party that year and began to seriously invest in Gen Con. While I didn’t personally spend much time on Gen Con I pretty much said yes to whatever the show needed and it grew nicely during those years. It was just before I left Wizards that the Gen Con manager proposed we move the show to Indianapolis, which I immediately said no to. How could we leave the Safehouse, or a convention center called Mecca! But they were, thankfully, persistent and came back to me with a well developed business case on why the move was necessary due to overcrowding and the lack of support from the city of Milwaukee, so we made the historic decision to move to Indianapolis.
In 2001 I left Hasbro to take some time off and live like a rockstar. Oh yeah, it was as fun as you can imagine, snowboarding in the Andes, rockclimbing in France, Carnaval in Rio de Janeiro, and mining for treasure on the dark side of the moon. Okay, maybe not that last bit. It was great fun, but within just a year I was anxious to do something useful again. As a result of some of these experiences I went through a spiritual awakening as well and came to be understanding that if Creator gave me skills at business, I should honor that gift and go run a company again. And I was anxious to answer a question that had been in my mind since the early 90’s regarding Wizards of the Coast. Did I just get lucky, meeting Richard Garfield in 1991 just days before he conceptualized the idea of a trading card game? Or could I have built a great game company without such amazing strokes of luck? Even though I was gallivanting around the world living a fantasy life, a part of me was always thinking, “What next?”
When I left Hasbro I could foresee that Hasbro would likely divest some of the businesses within Wizards of the Coast. Not that they were bad businesses, but as a division within Hasbro it made sense for Wizards to be more focused on publishing games. So I told Vince Caluori, who took over as CEO when I left, to call me if Hasbro decided to divest anything within the Wizards of the Coast division. Sure enough, a year later, I got the call, “Gen Con is on the chopping block!” I was thrilled. We sat down, negotiated the deal, wrote a check, and for the first time since perhaps the late 1960’s Gen Con was an independent enterprise instead of an extension of a game company’s marketing department.
Now what do I do?
Well, I’ve never been content to just run a business on auto-pilot. Where’s the fun in that! To me, when you run a business your goal should be to grow it, make it bigger, better, more profitable, employ more people (while financial returns are the stated goal of business, to me the real goal of business is to provide jobs, to give people a purpose in life and an opportunity to support their families and pursue their dreams). Growing a business is what gets my juices going. Yes, I realize that not all growth is good, but if a business isn’t growing, its probably stagnating. Growth is a symptom of vitality and life.
So, naturally, I have spent the last four years wrestling with the question of how best to grow the Gen Con business. Part of the strategy of course has been to simply make Gen Con Indy the best it can be by adding great events like True Dungeon, stepping up the marketing, investing in our registration system, and developing excellent customer service with our exhibitors, sponsors, and attendees. And along with the Gen Con acquisition we inherited a great relationship with Lucasfilm Ltd and a license to run Star Wars Celebration conventions. These shows are exhausting to run and we can only do them every 2-3 years, but they make good money and it’s a real honor to play a role in the ongoing development of the Star Wars franchise.
But as a standalone event management company it seemed to me that running Gen Con Indy once a year plus the occasional Star Wars Celebration would simply not be enough to keep the staff productive, that there simply would not be enough to do all year especially in years we’re not running Celebration.
So, we decided we need to do more shows!
Two concepts immediately came to mind, to evolve Gen Con UK toward a more European-wide concept, which we figured we’d brand as Gen Con Europe, and to start a new show in the US as far from the midwest show as possible, i.e., in southern California. The Gen Con Europe concept never really got off the ground. I spent some time traveling around Europe talking to gamers and learned that most gamers in Europe don’t really like leaving their home country. French gamers don’t want to go to Germany, German players don’t want to go France, and the UK might as well be on a separate planet as the Brits emphatically do not consider themselves part of Europe. So whatever city we would have picked to run Gen Con Europe, we probably would have only gotten players (mostly) from that country. I still harbor a fantasy of running a Gen Con on a small scale in Amsterdam with gaming events all across the city in coffee shops (code named Gen Con Underground!), but this is not likely to happen anytime soon. Since we couldn’t figure out a Gen Con Europe strategy that even looked good on paper, we abandoned this notion and decided to focus on the Gen Con So Cal concept.
Gen Con So Cal 2003
Our first Gen Con So Cal was in December, 2003. We pulled out all the stops, promoting it like crazy all year. I personally visited about 40 game stores and regional conventions throughout the southwestern USA. If you drew an imaginary line from San Francisco to Sacramento to Reno to Las Vegas to Phoenix, anything in, or southwest of, that arc was what we considered to be the target market. I figured I would promote the convention in much the same way that a politician solicits votes, kissing snowballs and throwing babies (or was it the other way around?), drumming up support of the convention. Meanwhile we worked with our exhibitors to drum up industry support for the show and we designed a full program of events, local area marketing, William Shatner as an anchor celebrity, and every game club we could find.
It was heart-warming how much the industry responded. Nearly all the major hobby game companies were there, including Upper Deck Entertainment, Wizards of the Coast, Alderac Entertainment Group, Playroom Entertainment, Paizo Publishing, Decipher, Days of Wonder, Cheapass Games, Ultra Pro, Fantasy Flight Games, Privateer Press, and even a few electronic game companies, most notably Nintendo, Vivendi, and Microsoft Games. All told, we had over 100 exhibitors. We were thrilled and the attendees were thrilled.
Unfortunately, the exhibitors had a more mixed reaction. Several factors contributed to this. First, the dates sucked. Running a convention in December is hard due to conflicts with holiday events. Second, the unions in Anaheim were a lot harder to deal with than what exhibitors were used to at other Gen Con events, resulting in increased costs and hassle from union laborers. Finally, attendance at the show was not what they expected.
And at the end of the day, that’s what this business comes down to---attendance. Foot traffic. The actual number of people who walk through the doors, that’s what drives the enthusiasm of the exhibitors. Our attendance at So Cal in 2003 was 13,423 people turnstile (4,148 unique). In case you’re wondering, unique attendance is the number of unique individuals who come to the show, irrespective of how long they stay, whereas turnstile attendance counts someone who comes for 3 days as 3 people. Personally, I thought the attendance that first year was about where you would expect for a first time Gen Con in southern California and was fine with it, figuring it was a great start. But there were definitely exhibitors who expected attendance to be double or triple that.
The show itself ran reasonably smoothly. Wizards ran a Magic: The Gathering grand prix event, which was generous of them and greatly appreciated, but it failed to draw in significant crowds. William Shatner was great; inspite of being very sick that weekend he was a trooper and didn’t miss a single obligation. We had a great collection of artists there, including April Lee, Tracy and Laura Hickman came out for the inagural show, and we had over a thousand gaming events. Probably most impressive was the AEG turnout. My good friend John Zinser was determined to make Gen Con So Cal a success and use it as an opportunity to own California. He did a massive promotion around Legend of the Five Rings and drew in a great crowd, rivaling the crowds he draws to Gen Con Indy each year.
As the owner of the business I also have to think about the money side. We lost money of course, as you’d expect for a first-year event, but as I’ve said several times regarding this show, “I don’t mind losing money, as long as its growing, because in that case its just an investment in building the business.” Most businesses take 2-3 years before they reach break-even and so I wasn’t worried about it. But it was quite a bit of money--well into six digits.
In spite of some rough spots I came away from So Cal 03 very optimistic about the future of the show. I forecasted that attendance would skyrocket from this solid base and that I could manage through the difficulties the exhibitors experienced.
Gen Con So Cal 2004
And, indeed, So Cal 04 was a significant step forward. The dates improved slightly from mid-December to early December (and future shows were always in November), we developed a program to help exhibitors deal with the unions better, and attendance improved significantly. Unique attendance increased from 4,148 to 5,559, an increase of 34%! Turnstile attendance increased by only 10.2%, which wasn’t quite as encouraging, so we focused more on the number we liked better. Certainly the most impressive addition to the show was Upper Deck Entertainment’s Vs. System Pro-Circuit event. I had been begging Wizards of the Coast to bring a pro tour Magic event to Gen Con for years and I’ve always thought it a mistake that WotC wanted to keep these events as standalone events instead of putting them at a gaming convention where the whole industry could see the spectacle. Well, Upper Deck saw the marketing value of doing this and when they launched the Vs. System pro tour circuit they decided to run pro tour events every year since at both Gen Con Indy and Gen Con So Cal.
The biggest mistake of So Cal 04 was that we had way too much space. The year before we used Hall D of the convention center (221,284 sq ft) and in 04 we switched to using two smaller halls (B and C) that in total were bigger than Hall D (303,008 sq ft). It was way too much and even though attendance was up, it “felt” down as there were so many tables empty. I’m not sure this hurt us much, but it certainly didn’t help.
Unfortunately there was one blight, an early warning sign of a large problem looming on the horizon. Exhibitor participation, instead of climbing too, dropped from 106 exhibitors to 81. Apparently I wasn’t the only one who lost money the previous year.
In all fairness, I should point out that I priced the exhibitor booths at Gen Con So Cal somewhat aggressively (at about three-fourths the cost of the booths at Gen Con Indy, a show roughly five times the size). There were two reasons for this: first is that because I was losing money on the show anyway, I should try and make up for some of that where I could, and the exhibit hall seemed a reasonable place. Second, I really didn’t want too many exhibitors at the show because the number of exhibitors has to make sense as a function of over all attendance. Its close to a zero sum game. If you have $100 to spend in the exhibit hall, the more exhibitors there are, the less revenue and foot traffic each of them will get. So it made sense to me to weed out the guys who were very price sensitive. So I wasn’t too worried about the decline in exhibitor participation as the drop actually seemed to bring the exhibitor participation to a level more appropriate for where the attendee participation was at.
Gen Con So Cal 2005
So Cal 2005 (and Indy 2005, for that matter) was our first great year on an operational level. The company was in its third year since it was acquired from Wizards of the Coast, and this was our third So Cal event. Our systems, planning processes, and the team itself were all developing nicely and one of my fond memories of So Cal 05 was periodically hearing over the staff radios, “Radio check”. Everything was going so smoothly there was hardly any radio traffic, especially on Sunday, making people wonder if their radio was working properly. Sure enough, about once an hour someone would say “radio check” over the radio and then about 20 people would all chime in saying “radio check” in response. Yup, the radios were fine, there just weren’t any problems to fix.
Attendance was good in 2005, with a nice jump from 2004 levels. Unique attendance climbed 13.8% from 5,559 to 6,326 while turnstile attendance climbed 18.4% from 14,791 to 17,514. That sounds good, but it was short of our goal of a 20% increase per year which would get us to break even by year five. To not hit those growth targets meant a longer time horizon to break even, implying a requirement for a bigger investment.
More importantly, to get to break even also required that revenues from exhibitor sales would climb as well. Unfortunately, 2005 saw a second year of decline from exhibitor participation. Just a slight drop, from 81 to 79, but in addition to the number of exhibitors dropping they also started sharing booths more and taking smaller positions.
At this point I decided that something would need to change if the show was to go on. Specifically, I went looking for “a big play,” like an acquisition of a complimentary convention---I thought merging with an anime show might be interesting---or a major new initiative to broaden into a complimentary area of interest like electronic games.
At this point I need to hold back some of the details of what happened next. I’ve always been very open about the ups and downs of my business ventures, but most companies prefer to keep things close to the vest. Suffice it to say I spent a significant amount of time during 2006 looking for a strategic play. And on two different occasions I thought I was on to something exciting, but neither deal quite came through (by my choice, I must admit), and by the time So Cal 2006 rolled around I had failed to close a strategic deal. To go on, I really needed the 2006 show to be a big step forward financially.
Gen Con So Cal 2006
Going into the show we knew we’d fallen short. Exhibitor participation dropped again, from 79 exhibitors to 72, and booth sharing was at an all time high. Here’s a typical entry: “Atlas Games sharing w/ Steve Jackson Games, Dork Storm Press, Fantasy Flight Games, Margaret Weis Productions, Eden Studios, Hero Games, & Palladium Books”. Eight companies sharing one booth, not a good sign for revenues.
And unique attendance dropped for the first time in the history of Gen Con So Cal, from 6,326 to 5,840, a decline of 7.7%. Turnstile attendance increased slightly, by 0.6%, the best metric of the show.
The sad thing was that in most other ways Gen Con So Cal 2006 was the best So Cal ever. Operationally it was really smooth, the program book was a work of art, the entertainment amazing, the costuming vibrant, great programming, and some great energy from some new games like Spoils by Tenacious Games and the World of Warcraft TCG from Upper Deck. People even showed up at the dance this year, and our anime track finally started to show some signs of life. Quite simply, the show really had a nice buzz to it.
But at the end of the day it’s a business, and a business has to make money, or be on the path toward making money. And it was clear Gen Con So Cal was doing neither. If it would have been losing just a little bit of money, perhaps I would have called it philanthropy and kept on. But the profit gap was beyond philanthropy; to continue running at that level of a loss would be called vanity.
Epilog
Hindsight is 20/20, but in looking back I’m really not sure what we could have done different that would have made a big enough difference to turn the tide. I’m sure some of you readers will have a theory, and its certainly possible there’s something I missed, but I think the strategy of having multiple Gen Con conventions in the USA is fundamentally flawed.
The “problem” is the Gen Con format is a very expensive format for a convention. Most conventions are only an exhibit hall, a vast area where companies set up booths and sell (consumer shows) or promote (trade shows) or both. But at Gen Con we like to be more than just a big exhibit hall. We dedicate tons of space to games and fun events that are of interest to gamers, overlapping with gaming culture, but do nothing to generate revenue. For example, the film tracks, the costume contests, the auction, the entertainment. The idea is that the cost of these events is funded by the sale of badges to attendees.
In Indianapolis this works well. (In case you’re worried, Gen Con Indy is very profitable and is in no danger of going away!) The show has hit a critical mass and then some, enough so that the badge revenues plus the exhibitor revenues more than covers the costs and life is good. But the midwest Gen Con show has 40 years of history, something you just can’t create overnight. Or even over four years.
But in Southern California we just couldn’t get to the attendance level where the economics would flip in our favor and turn things around. One option we looked at very closely was broadening into electronic games. In fact, we’re doing that. But when we started talking to electronic game companies we could get some of them interested in Indianapolis, but not So Cal---it was just too small. Sort of a chicken-or-the-egg problem.
We thought about changing the format, eliminating many of those extras that cost money but don’t bring in money. But in my opinion, it just wouldn’t be Gen Con anymore. We also thought about moving to a hotel format, which would probably drop our costs dramatically and our attendance moderately, but the exhibitors would not like it because they can’t set up their large three-dimensional displays in hotel ballrooms due to the lower ceiling heights. And without that we would lose the big Upper Deck presence, which was the main attendance driver for the show.
So, finally we’re at the inevitable end of the road. The show is losing money, its not growing, and there’s no credible plan for turning it around. Perhaps another year of searching would find the right play, but I gave myself a year to find that deal and am still empty handed. Time to move on.
There was one little piece of Gen Con So Cal that’s really hard for us to let go of (and I know I speak for the entire staff on this point). We had a nice gem of a program there called the field trips program that involved working with local schools to bring kids to the show, exposing them to gaming, but with an educational spin. The schools loved it and of course so did the kids. This was just the sort of outreach our industry needs. We might do something similar in Indianapolis, but the timing is bad as Gen Con Indy sometimes happens during summer break, and when school has just started. I want to thank Faith Felice and Megan Culver for doing such an amazing job with this program.
Its obviously a sad day to say goodbye to something we worked on for so long. Even though we couldn’t figure out how to make the show profitable, by every other measure it was a great success. We had a lot of fun going down to Anaheim every year and throwing a party for several thousand gamers! I can close my eyes and picture so many happy faces and I know we have created memories for many people that will last a lifetime. I have a Google Alert set up to notify me when Gen Con is mentioned on someone’s website or blog and I’ve read countless stories about fun times people have shared. I’m especially proud of being able to bring the Gen Con experience to a community thousands of miles away from Indianapolis, to people who do not have the time and/or resources to make the trip to Indy.
Finally I have to say thank you to all of you who came and helped us try and build this show. Exhibitors, artists, attendees, entertainers, employees, authors, celebrities, costumers, buyers, sellers, and, of course, gamers. But especially we must all thank those who come and work at the show long hours for no recompense beyond the pride of a job well done and appreciation from us, and I’m speaking of course of the volunteers, game masters, and senior volunteers. On behalf of the entire gaming industry I tip my hat to you. Thank you so much for joining me in trying to build something special.
Ironically, ending So Cal will probably help Gen Con Indy, which is doing amazingly well. This coming show will be the 40th anniversary of what Gary Gygax started back in 1967. Health permitting, Gary will be at Gen Con Indy this coming year and I am looking forward to shaking his hand and I hope he feels as proud as I do of what he started those many moons ago. With the end of So Cal, exhibitors will have funds freed up in their budgets, some of which I know will go to Indy. Our staff will have more time to focus---I’ve learned that even running just one show, when its as big as Gen Con Indy, is enough work to keep a crew busy all year.
Its taken four years, but I’ve finally figured out how to grow this business. The answer was there all the time, right in downtown Indianapolis, Indiana, and by standing side-by-side with our friends from Lucasfilm. And supporting our international licensed Gen Con shows in the UK, Paris, and Australia best we can.
There’s a new vision emerging for our company and its as simple as taking Gen Con Indy and Star Wars Celebration and making them even better, without compromising anything that’s there now. Funds that were being invested in Gen Con So Cal will be diverted to these shows. For example, I want to work with our decorator to build several deluxe roleplaying rooms where players can play without noise interference, with plenty of room, a whiteboard, and someone to come by and offer drinks from time to time. Yes, I want to do more with electronic games, but that doesn’t mean we have to lose any LARPs in the process. Yes, I want to bring more families to our shows, but that doesn’t mean we can’t have an Upper Deck pro tour event in the TCG hall. I suspect some readers will probably be concerned about my obsession with growing this business, why not just keep focused on the core hobby game market and milk this baby for cash? Yeah, that would be a reasonable strategy, but at the end of the day running this business has to be fun for me too, and the challenge of growing a business is what stimulates me creatively and intellectually. Trust me, we can board a lot more people onto the Gen Con ship without unduly compromising the comfort of our current passengers, and the more financially profitable the business is, the more we can invest back into the hobby game experience. Who knows, maybe the True Dungeon will someday take over the entire Marriott!
In four years the Indianapolis Convention Center will double in size and we’ll have 3 more hotels downtown, and we’ll be growing right into that space. And with just one Gen Con show per year to focus on, plus, subject to Lucasfilm’s approval, the occasional Star Wars Celebration, we’ll finally have the bandwidth to do all the cool things we’ve wanted to do, turning Gen Con Indy into a city-wide festival. Now I get it, our best strategy is to focus on the two shows we have that do well and give them our all.
Game on. No regrets.
Peter D. AdkisonCEO,
Gen Con LLC
peter@gencon.com (as always, I welcome your comments)
January 25th, 2007
Brawlers, Dwarves and Repulsors, Dividers and Defenders, and Heroes of the Moon have all been summoned to battle. Designed to add strength to players’ armies, these warriors are ready to charge forward and take on any enemy that gets in their way.
Brawlers, Dwarves and Repulsors, Dividers and Defenders, and Heroes of the Moon have all been summoned to battle. Designed to add strength to players’ armies, these warriors are ready to charge forward and take on any enemy that gets in their way.
