Redmond & The End of SPI

Redmond Simonsen, SPI’s Art Director from 1969 to 1982, was born in New York City in 1942. He attended the Cooper Union as a graphic artist and served in the US Air Force for two years. Upon his return to civilian life in 1964 he worked as a freelance graphic artist, designing record and book jackets.

Christopher Wagner started Strategy & Tactics Magazine in January of 1967. In 1968, Simonsen agreed to do the design and layout for the magazine, and its appearance rapidly improved.

Nonetheless, by late 1969, S&T was in financial trouble. Chris Wagner cast about for someone to take over the magazine and eventually made an agreement with Jim Dunnigan, who founded Poultron Press, later renamed Simulations Publications, Inc. Simonsen continued on as art director.

Under Dunnigan, S&T made a sudden and complete change in direction. [1]

Between 1969 and 1972, Simonsen refined the standards for editing and presentation of game components. His concept of “physical systems design” has never been surpassed and is still widely imitated. Cooper Union, a uniquely New York institution, charged no tuition but the admissions process was competitive, with only about 15% of applicants admitted. [2]

Redmond made the graphics fit the game. "I don't think there is really much to be gained by many colors of counters in a two-sided game," [as it would be confusing]. Redmond was a "functional graphics" man first and foremost. Some of his favorite games are WWI, Battle for Germany, PanzerArmee Afrika, Anzio and Crete.

"I'd like to see another young and vigorous company appear on the scene," Redmond said, inviting competition such as GDW, i.e., someone “who wanted to put their shoulder to the wheel and make a commercial and going concern.” (Though presumably without a quantum jump in game design such as Panzerblitz when it appeared.) Redmond felt that a spicy competition would help the Hobby. [3]

The "limited number of women in wargaming is because of the nature of [our] society. Where aggression is rewarded, some women short-circuit." While closet Nazis are visible, "Crypto-Nazi's might be a better name. The most visible person in the Hobby is the vocal extreme."

Simonsen designed the graphics for every SPI game—220 titles in all. About the changes the art department makes in a game: "It falls to me to sometimes take the rough edges out. I try to standardize the approach to rules." He does not try to produce "pretty games" but rather to make them functional.

Simonsen’s credits as Game Designer: After the Holocaust, Battlefleet Mars, The Creatures That Ate New York, Dixie, Dragonslayer, Sorcerer, Starforce, Strategy I, Strike Force 1, and Worldkiller. He also created the StarForce Trilogy.

After leaving wargaming, Redmond Simonsen relocated and worked for Paravision, Inc. of Richardson, TX, through 1998. He died of pulmonary thrombosis on March 8, 2005. Even though Redmond had quit the game business for good, his work has continued to inspire wargame graphic artists.

When the Lifetime Subs were first offered in 1974, I tried raising my concerns to Redmond and some others about it, but I couldn't get a hearing. It was a done deal and they didn't want to face the obvious handwriting on the wall—SPI would not survive. The lifetime sub was a desperate move. A company that offers this "discount" in some ways is mortgaging their future as they are bypassing future incremental revenue for immediate gain. This is a sign of a potentially troubled and/or a dysfunctional financial situation. The real solution to the cash-flow problem would have been to correct their discount structure offered to stores and distributors and raise prices. They were using the same discount structure from the book trade, which resulted in a loss of $1 on each unit sold through distribution. SPI could have been saved by simply going mail-order-only and forgetting about the Lifetime Subs! The company was doomed from the moment they began selling those Lifetime Subs—and the principals must have known this. John Young, who was the controller, was fired in the latter half of 1974, taking the fall for the fact that the company never made money...

The Lifetime Sub income (only $75 per sub when first offered in 1974) was the equivalent of five years and four months of regular annual subscriptions at $14 per year (without allowing for inflation). SPI actually folded not too long after that span in 1982. Furthermore, if the average subscriber was age 22, with a life expectancy around 72 years,[4] a lifetime sub created a 50-year obligation, with the last 44 years of issues free! Did anybody do this math at the time?

The traditional business model for magazine subscriptions was misleading. For most magazines, the money from subscriptions was not the primary source of income. A magazine was a vehicle for advertising sales. S&T magazine was a “loss-leader,” advertising its own products in its pages—but there was inadequate cost-effectiveness analysis to see whether the business model really worked.

For instance, SPI could have sunk the money they put into publishing S&T into print advertising instead. Or, alternatively, they might have removed the free game from the magazine and offered a boxed version of those games. Anything but offering that “Lifetime Subscription." I am uncertain whether the guiding lights at SPI realized they were writing their company's death sentence. They may have believed that as long as S&T subscribers kept buying the boxed games each month, it didn't really matter if they paid a penny for the magazine. Their strategy was continual growth, but the magazine subscription level topped-out at around 36,000. (The magazine had 30,000 subscribers at the time of the SPI buyout in 1982.)

The company was losing $1 on each game sold through distribution and this was not noticed because each title remained profitable. But lumping them together with direct-mail sales in the income stream concealed this fact. This is apparent in Dunnigan’s chapter in the SPI book Wargame Design (see the chart included below from p.126). On total sales of over 17,000 units of World War III, SPI barely made a profit of $3,000. This chart shows fulfillment costs of over 50% of income on the title ($34,000) including labor and postage.

If you are losing $1 on each game sold through distribution, you can't make that up in volume. The Lifetime Subs were a makeshift attempt to patch that over, when what was really needed was a proper breakdown on pricing, and a reset of the trade discount, or else departing from retail altogether. As far as I know, they did not discover that they were losing money on distribution (or they wouldn't have continued on that course, obviously). At some point they must have realized what was happening.

Compare the sales figures for the game World War III in the Wargame Design book:
First Year: 5,178 units sold, $26,707 in sales; $5.15 per game (mostly direct mail).
Third Year: 5,616 units sold, $17,250 in sales; $3.07 per game (mostly wholesale).

Overall cumulative profit on the game went down in the third year ("Status" column); i.e., they would have made more money by halting sales after two years. Despite selling 5,616 units in the third year, they lost money on the title that year. In total, over three years, the game grossed $64,000 in sales on 17,382 units, but profit was only $0.17 per unit (essentially a break-even proposition). That's the problem right there. The whole pricing structure is farkakte. Lifetime Subs was never going to fix that.

I asked them for a promotion so that I could get out of the trenches and look at the big picture, but they declined, and I quit in January of 1977. The Lifetime Sub offer on its face is evidence that things were out of control.

Redmond was my boss for two years. We had a lot of dinners together, and we never talked about work. We drank a lot of wine. He really thought deeply about life and had high principles. You had to break through to him first, but after that he was very kind and reliable. Typical gruff exterior.

In Redmond's article on the graphic design of maps in Wargame Design, he doesn't talk about how he does it. He kind of talks all around it. But the work itself shows you everything. Redmond was a careful designer. He would get something that was working and then he would tweak, changing one element in the map while leaving all the rest. A gradual evolution came with additional colors: starting with just blue on sandstone stock, then blue and brown, then red joins yellow as a novelty...

He showed me a lot of trust. I was there to implement his vision of "Physical Systems Design." (He didn't say Graphic Design). Even at work we didn't talk about what we were doing, we just did it. I don't remember him ever correcting me or holding up a chart or something and waving it at me, even when I shifted the Odds Headings to the side on the Punic Wars CRT!

There were times at work it would get tense, around deadline for S&T: we had reserved press-time on a web press and we could NOT be late. In that environment, we'd close the doors to the R&D hallway so no one would hear the insanity as we tried to get the last-minute corrections done. Actually it was pretty crazy to work there...

In addition to my editorial work, I designed two games on staff for SPI: Napoleon’s Last Battles and Bloody Ridge (in the Island War quad). Development credits included Austerlitz, Destruction of Army Group Center, Foxbat & Phantom, Red Star/White Star, Rifle & Sabre, Spitfire and Strike Force 1. In all, over 100 designers and developers worked on games published by SPI between 1969 and 1982. [5]

The final nail in SPI's coffin (just as it was for the original OSG, by the way) was inflation in the paper industry. Oil prices in 1979 shot up nearly 50% and this increase spread throughout the economy, particularly affecting the paper market, and we found ourselves breaking even on our new products. By 1982, SPI was $200,000 in debt to the printer. Fortunately for Reflex Offset, this tab was paid with the TSR loan proceeds just before those schnooks called it in.

1979 saw significant inflation, with the Consumer Price Index (CPI) rising 13.3%, the largest increase since 1946. This broad inflation impacted the cost of paper production, including materials, labor, and energy.
The "Oil Shock of 1978–79," triggered by reduced oil production following the Iranian Revolution, significantly increased energy costs, more than doubling crude oil prices within 12 months. This raised the cost of transportation and manufacturing in the paper industry.
Newspaper Price Increases: Some newspapers did raise their prices in 1979.

SPI’s Printer: Reflex Offset

Seymour Goldberg was the owner of Reflex Offset, the printer for SPI and OSG. The company was named after the dark blue ink in the Pantone Matching System. I liked working with Seymour and his pressman John Banks, and learned a lot from them. They understood the job and Seymour would even drive in to Manhattan from Queens in his white Econoline van with a press sample if anything looked amiss. One day he had errands to do in midtown and asked me to ride along so we could talk. He was complaining about "those hard-ons" at SPI and how far behind they were on their bills. When he reached his destination, he asked me to wait in the van. I happened to notice he left his wallet on the dash in a pile of paperwork, bulging with currency. When he got back, he told me he was testing me to see if I was a mensch or whether I would touch his wallet.

Seymour called it "Yiddishe kop," having a head on one's shoulders. He urged me to change my business model.

"Kevin, why don't you do some kids games?"
"Seymour, I have no interest in that. It wouldn't be any good. I might as well become a bricklayer..."
"But son, you need to be practical. You've got a girlfriend; you might want to get married and have kids."

Seymour liked to say, "The printer is a necessary evil in your business." This was brought home in the most cogent way when Seymour presented the print bill for Dark December (published in 1979 at the height of the paper-price jump). This was indeed a dark moment for me when I realized that we were just going to break even—we had outdated pricing.

One thing I have learned in this business: Don't stiff the printer! He can put you out of business. Even when our OSG shop closed down, I made arrangements for Reflex Offset to receive royalty payments from the Avalon Hill reprints of OSG titles.

[1] Including a complete game in each issue. Costikyan http://www.costik.com/spisins.html

[2] Dunnigan's History of Wargaming. Cooper Union began charging tuition in 2014 due to financial difficulties.

[3] Costikyan http://www.costik.com/spisins.html

[4] 80% of those are still alive today

[5] http://www.costik.com/spicom/design.html