“It's not what I invested in though. I invested in this neat little thing called a "board game cafe". Not a hail-mary business model that leads pathetic companies like Morning straight to bankruptcy.”
Disagree with this. What is their business model? Three fold:
1. Retail locations, also known as board game cafes
*This is something they started and got really good at. This is something that we need to see grow, and this is a given, but at the same time, this type of growth should be carefully considered.
Every 1 location opened is a huge risk in its undertaking. Money must be paid to the locale, to the employees, etc. It can be a huge strain on the company if they don’t make sure each location is profitable. This is an undertaking in itself.
Here I believe we as investors must be reasonable. How can we expect them to open 10 locations at once, when they are still making completely sure that each location is a success? That to us should be more important. Should any 1 of these locations close, or face problems, then the finances of the company as a whole would be in peril. When they give out news, (as they have) demonstrating the success of each location, we should be overjoyed, because they are working out a plan which will ( in the future) allow for locations to be built en masse. Yes, locations must and will be built, but existing locations must be made to work first.
2. Distribution.
This is actually one of the most consistent, if not THE most consistent part of their business. They have truly made a great core of this in Canada, and once they start working with the US (again, as they said they would) we will see a large increase of consistent revenue. This is always a good thing.
3. (Newly added) publishing.
Multiple articles cite Publishing as the most profitable part of the game making process. S&L decided to enter this business with a game making company they bought. Morning was ALREADY in bankruptcy when they acquired it. This means that they got all their rights to all future and past games for virtually nothing. It has already been discussed what a great buy this was. By publishing Morning (their) games S&L actually wins multiple advantages:
a) the highest margin of the profits
b) valuable experience in publishing with little loss on their end (they own the game they will publish, they don’t need to negotiate terms with anyone)
c) growth in their BRAND as publishers.
We have to realize that this isn’t only about Morning. Depending on how their games do, the experience they learn etc, other game makers or companies might come to S&L to get them to publish their games.
This is a very long plan folks. They are in this for the long run
