Guide
Building a games case - Part 1
by Alessandro Grieco
Cardboard shortage poses problem for game manufacturers
6.7.2022
Translation: Jessica Johnson-Ferguson
The pandemic has drastically driven up the price of the raw material needed to make cardboard. This development bites – not only for our shop when it comes to packaging orders, but also for board game manufacturers.
Wood, aluminium, copper and plastic. Many raw and basic materials have been in short supply since last year. This shortage mainly affects the construction and automotive industry as well as electrical engineering. What’s been talked about much less is the lack of cardboard. As an online shop, we feel this when it comes to the packaging material we need to ship orders.
Manufacturers of puzzles and board games are even more affected, as some of their products are made entirely of cardboard. According to Peter Berneiser, Public Relations Manager at Pegasus Spiele, production has already had to be adjusted as a result: «Due to the shortage of raw materials at German and European cardboard manufacturers, we’ve moved production of some of our products to China.»
Why is cardboard scarce?
The fact that cardboard is running out has been known for many years. This is because we’re using less and less paper. We read fewer printed newspapers and digitisation means a growing number of offices have become a paperless operation. This translates into a lack of wastepaper, which is crucial for the production of cardboard. Fortunately, producers can adapt, as this is a slow process. However, what wasn’t foreseeable and completely shook up the industry was Covid.
As many stores had to temporarily close because of the pandemic, many people started to shop online. In the first year of the pandemic alone, our two shops digitec and Galaxus increased sales by 59 per cent compared with the previous year. And more orders also mean more cardboard for shipment. Gerhard Fust is the man in charge of procuring packaging materials at our logistics centre in Wohlen. The boom in online retail and the resulting increased demand for packaging cardboard has kept him on his toes. «Two years ago, when we were faced with the first lockdown, I needed to up my hours by 20 per cent. And that still wasn’t enough,» says Gerhard.
The demand for games also increased tremendously during the pandemic. Particularly during the lockdowns. The gaming market grew by 21 per cent year-over-year in 2020. Due to this high global demand, cardboard became a scarce commodity, thereby creating supply bottlenecks.
Cardboard became more expensive
Due to the scarcity of cardboard, prices also rose astronomically. Between September 2020 and August 2021, prices for corrugated cardboard raw paper increased 46.6 per cent. The wholesale prices (in German) for mixed wastepaper even tripled during this period. But according to Gerhard Fust, it’s not just the raw material that’s become more expensive: «Electricity costs for the production of cardboard and diesel prices for transport are also rising.»
These high costs for cardboard are putting more and more pressure on game manufacturers. Take Wädenswil-based game manufacturer Game Factory, for example. According to Rico Gadola, PR manager at Game Factory, although the company isn’t currently struggling to get its hands on the raw materials, it does have to rethink its production because of the higher costs: «If you’re confronted with this kind of development as a manufacturer, you need to consider all aspects. Can we save raw materials in packaging or the contents of the games? Which production partners will provide us with realistic quotes?»
Impact on end users
When raw materials become more expensive, this doesn’t just affect manufacturers. Rico Gadola says: «We’re currently doing everything we can to maintain our threshold prices. Having said that, it’s also unavoidable that rising prices for raw materials will have an impact on end consumers in the long run.» In other words, Game Factory is very likely to increase its prices. And they’re not alone.
Pegasus Spiele already increased the retail prices of its products in November 2021. Schmidt Spiele also feels compelled to do so. Managing Director Axel Kaldenhoven says: «The price increase of raw materials is something we’ll have to live with for a while. Accordingly, Schmidt Spiele will also have to adjust its prices on 1 September 2022, due to the current situation.»
At least the game manufacturers are positive that the situation will ease in the coming months, as the paper industry has addressed the rising demand. Nevertheless, the pandemic and the war of aggression in Ukraine have revealed how fragile our global infrastructure is and how strongly the ripples can be felt all the way down to the end consumer.
Riding my motorbike makes me feel free, fishing brings out my inner hunter, using my camera gets me creative. I make my money messing around with toys all day.
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