Global manufacturing is migrating away from China, and closer to your customers
We are living in an era of the beginnings of a massive sea-change. On the one hand, it is widely recognized that we are in the middle of a renaissance, or a ‘golden age’ of tabletop board games. But not everyone who sees that understands why it is so, or how it came to be. Let alone, what direction the hobby is leading towards.
Big companies like Mattel and Hasbro did not create this ‘renaissance’ of board games. It was created by the confluence of passionate hobbyists and dedicated Friendly Local Game Stores (FLGS), especially ones selling on The Internet; the new, amazing, and still not fully understood powers of The Internet itself (social networking, social marketing, crowdfunding, etc.); and the very earliest beginnings of a revolution in how things get made and sold in the first place (the inevitable move from retail, even via The Internet, to 3D printing and the manufacture of goods right in your own home or business).
However, even though the means certainly exist for Indie Game Creators to have their games made and distributed in the traditional manner, made in China and distributed from China or the US or from within Europe for example, all indicators suggest that the economic advantages of outsourcing for these tasks is losing strength not just in the near future, but that this is already happening now. In fact, for the textiles and apparel industries, this change has already been ongoing for a number of years now. Other forms of manufacturing are following suit as you read this.
For at least a half-decade or more, American companies of all sorts have been moving their manufactories back to the continental US from Asia and Europe. Predictions by economics experts and forecasting specialists suggest that from 2009 to now (2015), there has been a slow but steady rise in the costs of having things made overseas and it has finally gotten to the point that, all things considered, it very soon will be almost even money whether or not it is worth it to have your products, whatever they may be, made in the USA versus having them made in China.
What the experts say is that the paradigm shift has already occurred, and the results of that are filtering down the economic food chain right now. They claim that outsourcing is out, and manufacturing and distributing from as close to the customer as possible is now in, and going to be the future. Especially once manufacturing in the home (such as 3D printing) will become easier, less expensive, and of higher quality.
Proof of this is that in order to counter the movement of manufacturing back to the US, what are some Chinese companies doing? Like the Japanese auto makers before them, the Chinese are opening companies in the USA, staffed by local Americans, to absorb the flow of work returning to the North American continent. Therefore, realistically, you could still have your products made by the experienced Chinese, AND have them ‘Made In USA’ at the same time!
But regardless of who you contract with, the simple economic fact is that the very way that global businesses go about their business is changing dramatically, and right now, too. Companies that in the past outsourced to places like China are now bringing manufacturing and distribution back to Europe and the USA. Others like Hasbro, who already have facilities and expertise in the US and in Europe, are now offering their domestic means and expertise to other firms as well. What this means is that Hasbro wants to become your domestic manufacturer and distributor, if not more!
So why would Hasbro do that, and why should you consider contracting with them instead of an established and well-respected Chinese firm that many successful Indie Game Creators have already used? Well, obviously Hasbro doesn’t want to be left out of the colossal economic change going on, as mentioned above.
However, as one of the largest and best-known toy and game producing companies in the world, Hasbro is also showing that perhaps of all the big traditional companies in its industry, it more than most of its competitors is trying stay at the forefront of the wave of changes that are redefining what games and toys, and even entertainment itself, is.
Hasbro tried to partner with Nickelodeon to create an ongoing presence on television, sort of the beginnings of a ‘Hasbro Network.’ Hasbro was in talks to perhaps purchase DreamWorks Animation at one point, trying to become a real player in the Hollywood entertainment biz. And Hasbro has partnered with one of the hot new 3D printing firms to allow you to, if you own a 3D printer, make your own Hasbro-branded toys, and even sell them for a profit if you like!
Hasbro clearly is trying to break out of the mold of being primarily a toy and game maker, and become something much more. Like The Disney Company did some years ago, when it purchased ABC Television and ESPN, Hasbro is trying to become a more general-purpose entertainment-experience producing entity. To do that, they are opening up their factories and distribution chain to other companies like those who produce low-volume, higher-quality games for the tabletop hobby market.
Hasbro has some ways to go to supplant the Chinese at the game-making game. It needs to bring its communications skills up to modern standards, and it needs to either offer higher-quality finished products at a competitive price-point, or show as great a benefit for producing moderate-quality products in reasonable numbers. But the benefits of hiring a firm like Hasbro could be immense:
- Domestic manufacturing on very large scales by a firm with decades of experience in its industry
- Manufacturing and distribution from within the EU, therefore avoiding high tariffs, taxes, and fees that can otherwise cripple sales from one continent to another
- The remote but present possibility of creating future relationships with immensely important economic entities, such as Hasbro itself, major IP owners such as Nickelodeon or The Disney Company, and major retail outlets such as Target and Wal-Mart
- Maybe even just a little bit of coat-tail riding by having it said that Hasbro makes your game, and that Hasbro works for you!
In any case, it is a most interesting option, and one that needs further exploration. The author of this piece requested an interview with both 360 Manufacturing Services, Hasbro’s contract manufacturing division in the US, and Hasbro Ireland, who has been promoted for offering the same services in Europe. At the time of this writing they have not yet replied. If they do, I will certainly ask them to show us the benefits of hiring Hasbro to be your one-stop shop for Indie Game Creation, and write another article to let you, dear reader, know what they said.
Until then, keep exploring your manufacturing options close to you and close to your customers. Surf that wave right to the shores of success, my friends!
Chris Carroll, The Ogre of the Ozarks
For The Game Creators’ Social Forum