> Opening the HERO System would be a fantastic step for them.

I think you're spot on, Ryan.  I also agree that emphasizing "Champions,"
not "Hero," would be the best way to go -- when people get back into the
gaming that they haven't had time for in 10 or 15 years, they'll be looking
for that great superhero game they remember, Champions, not this "Hero
System."  But hey, it's their game.

> On a related topic (from the www.herogames.com discussion board), I
> thought Woody's trashing of the d20/OGL concept was quite interesting.

I've known Woody for 13 years now, and sometimes he says things that just
make me furrow my brow in puzzlement, or wonder if he's really trying to
express something very different from what his words convey on the surface.

> His opinion on the matter is interesting, because his business sits at the
> nexus of payments between retailers, distributors and publishers.  Its no
secret
> that the cashflow in the RPG market has been tightening all year, and has
> reached a critical point for many publishers in the 4th quarter.  Payments
> are being delayed at many points along the channel, and delayed payments
> almost always means delayed products (which delays cashflow even futher;
> creating a really bad negative feedback loop).

I've heard about these delayed payments, but I have not actually seen much
of them here at Atlas, which is interesting.  I *have* seen a SHARP slowdown
in re-order activity in December, pretty much across the board (even games
like Once Upon A Time and Lunch Money should have sold a LOT more in the
month before Christmas, if history is a guide!), and it's no surprise that
D20 adventure sales are hurting.  But when I kick out an A/R report from
QuickBooks, there's nothing that would indicate unusual payment delays.  In
fact, among all our US distributors, in the past due columns I have the last
Zocchi invoices (which need to be written off as bad debt; I don't know if
we'll even see pennies on the dollar) and a single invoice that is under $50
and is probably going to arrive in the next few days (it's a customer who
always pays at 30 days).  Other past due distributor amounts are oddball
things like balances from math errors or disallowed rapid payment discounts
(adding up to under a hundred bucks total).  As usual, we have a number of
overseas accounts who are slow to pay, but that's nothing unusual; and
there's a venerable retail chain that always runs a little late.  A little
quick math tells me that we currently have 19.8 days' sales outstanding
(current A/R divided by total year's revenues, times 365), to use a common
A/R measure -- and that includes the bad debt and oddities that will get
written off the books in the next couple of days.  A DSO of 20 is nothing to
be ashamed of in the best of times, I think.  Are we really unusual among
game companies right now?

I suspect that the volume slowdown hits middlemen like Tundra and Wizard's
Attic much harder than a manufacturer like us.  If they're not moving enough
units to generate the dollars to cover their overhead, they may have a lot
of trouble passing payments along in a timely manner to their clients, even
if they are being paid on time; I doubt they have much in the way of cash
reserves, since I don't think they were charging high enough fees to
accumulate such a reserve for times like this.  It's too bad if they are
being slow-paid by many customers -- especially since, as reps of multiple
lines, they should be able to place a shipping hold on anyone who owes them
past due money, no?  I'd think that with that leverage they'd have much
better payment timeliness than a solitary company like us.   ::shrug::

------------------------------------------------------
John Nephew    voice (651) 638-0077 fax (651) 638-0084
President, Atlas Games             www.atlas-games.com

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