Overview
This interview with the CEO of Limited Run Games explores the company's history, controversial business practices, challenges with collector expectations, and their role in the indie physical games market. The discussion covers business philosophy, operational issues, and shifts in focus due to changes in the gaming and collectibles landscape.
Company Background and Controversy
- Limited Run Games publishes physical versions of indie and retro games, generating over $250 million in sales since 2015.
- The company faces criticism for slow shipping, perceived artificial scarcity, and price inflation in the aftermarket.
- Long manufacturing times result from open pre-order models where production starts after orders close, leading to extended waits for collectors.
- Transition from limited, in-stock runs to open pre-orders was in response to complaints about products selling out too quickly and scalping.
Business Challenges and Evolution
- The company originated from the founder's struggle as an indie developer and his desire to preserve game legacies through physical releases.
- Early failures and near bankruptcy led to the creation of Limited Run's business model.
- Initial success allowed other developers to release their games physically and maintain their value.
- A shift during the pandemic led to overextension, with too many titles being released, but the company is refocusing on quality over quantity.
Store Operations and Collector Experience
- The physical store sells leftover and returned stock at retail or discounted prices, not at inflated market value.
- Trade-ins of Limited Run titles are resold at original MSRP to discourage scalping.
- Damaged returns are discounted further over time.
Product and Market Dynamics
- Production includes extras for returns and catastrophic shipment failures, with leftovers sold at events or in-store.
- Delays between pre-orders, manufacturing, and distribution can lead to temporary aftermarket price spikes.
- Rights to publish physically revert to developers after fulfillment; subsequent releases by other publishers can further impact resale values.
Addressing Criticisms
- The open pre-order model aims to allow anyone interested to purchase during a set window, minimizing forced scarcity.
- Limited Run does not resell their own products or allow employees to do so; strict anti-resale policies are enforced.
- Scalping and bot-buying were bigger issues under the original limited run model; open pre-orders reduced such problems.
Business Philosophy and Lessons
- The founder emphasizes passion, adaptability, and learning from failure as central to business success.
- Starting with small, achievable projects enables scaling and builds confidence.
- Post-pandemic, the focus is on releasing fewer, more meaningful titles that fans genuinely care about.
Acquisition and Company Growth
- Limited Run was acquired by a larger company led by a fellow collector, allowing for operational improvements and sustained growth.
- The acquisition helped resolve logistics and fulfillment challenges by bringing in experienced operations management.
Industry and Market Outlook
- The founder believes physical media will remain relevant, particularly with Nintendo, due to enduring demand for tangible products.
- Digital-only trends are counterbalanced by consumer desires for ownership and the risk of digital content being revoked.
Recommendations and Personal Favorites
- TowerFall and Super Meat Boy Forever are recommended for fans of platformers and couch multiplayer titles.
- Personal favorites include Teenage Mutant Ninja Turtles: Shredder's Revenge and classic Star Wars ports, which reflect the founder’s own gaming nostalgia.
Decisions
- Refocus on quality over quantity for future releases, scaling back the number of titles and emphasizing passion projects.
- Maintain open pre-order model to ensure fair purchasing opportunities for consumers.
Action Items
- TBD – Limited Run Team: Continue improving customer communication and shipping timelines.
- TBD – Limited Run Team: Clear backlog of prior over-signed game deals with a renewed quality focus.
Recommendations / Advice
- Start small and scale up gradually when building a business.
- Prioritize genuine passion and consumer need when selecting products or services to offer.
- Be transparent with customers and uphold promises regarding product scarcity and reprints.