Reply Hazy, Try Again: Cautious Optimism Reigns as the Gaming Industry Looks Ahead

by TAMI MURPHY, Vice President, Account Management and Marketing, GPI

Forecasting and predicting how a new year will play out is always stressful. In January, when I asked my Magic 8 Ball what it thought about 2023, it came back with a cryptic answer: “Reply Hazy.”

Luckily, our staff at GPI has deep industry experience working with astute clients who are able to provide some better insight than Mattel’s iconic toy. Overall, the general sentiment remains optimistic with an err on the side of caution. That actually matches the Magic 8 Ball prediction after all. I interpret “Reply Hazy” to mean we should proceed with caution and “Try Again” to mean that we should keep chugging ahead while remaining optimistic.

Last year, true optimism was felt at the two public shows we attended: PAX Unplugged and GenCon. Families were back in force at both shows, anxious to sit down and play games. Between talking to retailers about their customers’ increased interest in games and the attendance at both game-centric shows, it’s clear that the upswing in the popularity of gaming that was sparked by the lockdowns during the COVID-19 pandemic has not waned. Whether we are in a recession or not, we know that when the economy is shaky, consumers have recognized that games are inexpensive entertainment when compared to a night out at the movies, a trip to the indoor water park, or a weekend travel excursion.

“We weren’t sure what to expect when we launched our first game, Connected Clues, earlier last year,” says Brian Johnson, Creator and Founder of Connected Clues. “We loved the game, but it can be a bit nerve-wracking wondering if everyone else would enjoy playing the game as much as we have. After exhibiting at PAX Unplugged, we knew that Connected Clues was a hit. We demoed our game for more than 2,000 players and were overwhelmingly met with smiles, laughter, and praise for the game. We had many people coming to our booth telling us how much fun they had playing the game with a group of friends the night before. Almost all of them wound up purchasing a copy for themselves.”

David Blanchard, GPI’s Vice President of Business Development, echoes the sentiments of Johnson, a fellow inventor. Blanchard feels his creative team as well as others are full speed ahead. “Our GPI design and development department is heading into 2023 ripe with possibilities. We are excited about the game concepts we have placed with publishers which should be released later in the year and we have other partnerships in the works that have yet to be unveiled that we can’t wait to announce.”

Blanchard continues, “but from a more general perspective, times of economic uncertainty have traditionally been somewhat favorable to those on the creative side of the toy and game industry. Personally, I think people are going to be playing more games this year than perhaps they would have otherwise. Maybe they’re looking for inexpensive family fun or maybe they’re just looking for a brief distraction from what is bound to be another dumpster fire year for U.S. politics leading up to next year’s election. But whatever the reason, the more games get played, the more games are sold, and the more publishers will be looking for ‘newness’ from the game design crowd.”

Ryan Schuman, Senior Director of Retail for Hunt A Killer, shares: “These times are uncertain, but we continue to see the trend that people value board games and spending time together. So we plan on continuing to develop and provide immersive games to help provide that needed escape. We will be more diligent about inventory and adjusting processes to a more just-in-time approach to stay lean and flexible in case of a downturn. But we plan to continue to expand our offerings and distribution, and capitalize when the economy settles.”

In looking forward to 2023, Johnson is optimistic about the game industry as a whole: “Inflation is a major issue that everyone is feeling, but I believe that games can be an amazing solution to help people spend less money,” he says. “If your group of friends is looking for something to do for the night, it’s way cheaper to stay in and play a party game versus going out for dinner and drinks. It’s likely more fun and relaxing as well. When you purchase a game, you aren’t simply paying for the paper, cardboard, and plastic that the game is made of, you are purchasing an experience and the hours of fun with your friends that the game will bring.”

Paul May, Vice President of Creative and Production at The Op Games adds, “With the cost of shipping coming down dramatically, I think it is a huge help to the publishers in the industry. Many retailers (and probably publishers) are sitting on quite a bit of inventory at the moment, but I think that puts all of us in a good position for the start of the year. People are still buying and the stats through the cash register appear to be up, it’s just a matter of working through the inventory.”

You can almost hear the collective cheers worldwide for the drop in container prices this year. This fact alone is cause for celebration as shipping prices in recent years have, in many cases, exceeded the costs of production, according to Erin Gagne, GPI’s Freight Coordinator.

“When it comes to freight and the U.S. supply chain, it’s been a rocky road the past few years, but we’re finally seeing the light at the end of the tunnel. The past three years have seen transit times from Asia to the U.S. exceed more than 55 days for most shipments and long dwell times at ports. GPI expects to see close to pre-pandemic transit times of 35-40 days from Asia to the U.S. warehouse doors this year,” Gagne shares. “By 2023’s end, experts are hoping to see predictable normalcy come back to the U.S. supply chain, similar to what we were seeing in 2019.”

In addition to the good news about the supply chain, Mike Fisher, President of GPI, is feeling optimistic about the state of manufacturing in China. “The outlook is very positive. Material supply and costs across China continue to be stable. Electrical generating plants are meeting demand, and stability with the transportation of goods to shipping ports has improved as well,” he says. “However, concerns remain very high about elevated rates of COVID-19 infections. It is estimated that China will experience an unprecedented surge in infections before the government is able to restabilize the pandemic to more manageable levels.

Depending upon what these conditions look like early this year, many analysts are seeing signs that China may further loosen entry restrictions by the second or third quarter. And in an effort to return to pre-pandemic levels of travel and international business, Hong Kong recently dropped its controversial ‘0+3’ quarantine restrictions for incoming travelers. Lastly, Vietnam is emerging as a very viable manufacturing sector and opportunities are ripe for further expansion of manufacturing capacity.”

While the future is never certain, there are reasons to be optimistic about what lies ahead that go well beyond production and logistics. “One of the things we try to be conscious of is opportunities to build goodwill,” says Kevin Carroll, Co-Founder of Carma Games. “So whether it’s coaching a newbie inventor, making a bill ‘disappear’ for a retailer who had a flood, Zooming with a second-grade class, or sending free replacement dice to the owner whose pooch got hungry … there are always small ways we can help out. It makes others feel good, but it also makes us feel good, and it’s good for business. We feel enormously fortunate to be in the game biz.”

A version of this article was originally published in the 2023 edition of The BIG Toy Book. Click here to read the full issue! Want to receive The Toy Book in print? Click here for subscription options!