I would not say they sold an inferior product, rather a superior product in a diminishing market. To break even they either need to sell high volume at a low price, or low volume at a high price. The high price concept may work in Germany and elsewhere, but in the US, there is no real market for board games that cost over $50. The real breaking point is probably $30. A good game with quality components will make money at this price. However, AH has to support "losers" with some of the "winners", thus it become necessary to increase that price from $30 to $40 (or more).

The market as a whole has taken quite a few blows. First the RPG craze of the 80's hit. This introduced quite a few players to board-gaming, but the net result was a decrease in the number of board gamers. Then the 1st computer game blitz hit with the 8 and 16 bit computers of the late 80's. Probably the biggest hit came with CCG mania, which was closely followed by another increase in computer gaming cause by real-time-strategy games and pbem/internet gaming.

The sad fact is that board games for the most part are complete units. You go to the store and buy a game, and play it with 5 of your friends. Then you can play it over and over for no additional cost. Once "everyone" has the game, sales slow to a trickle. Then the designers need to come up with an expansion, but that never makes as much money as the original. (quite a few people buy the original, but don't like it enough to buy expansions) This can be carried out for a few more expansion, but eventually there is an end to the series as interest falls below the volume needed to sustain profit. It also becomes prohibitive to "catch up" by buying the game and all of the expansions at once.

RPG's provide a lower up front cost, and the expansions also cost less, so there will naturally be higher volume. (it is a lot easier for buyers to risk $15 than $50) There are more expansion possibilities, so a popular series can be strung out for much longer.

However, CCG's have the best model for profit. A low unit cost (Boosters cost $1.50 to $3.00, Starters cost $8-$10.), creates high volume. The best part is that buyers purchase duplicates of the original product, something not common in board games and rpg's. The low price also encourages impulse purchases, because you don't need to "save up" to buy the product. For the price of a few games at the arcade, you can get more cards. (similar to the concept many years ago of the "penny candy" isle, where individual pieces of candy cost a penny each, so you always had enough money for candy)

Probably the best thing AH did in the last few years was publish more multi- player games. Quite a bit of the 2-player game audience was lost to CCG's because of the time involved in playing wargames, and the ability to find opponents.

One of the other good moves they made was creating version of their games for computers. They managed to keep the games as faithful to the originals, making a few concessions during conversion.

There definitely will be a void in the market. However, I don't think it will be an easy one to fill. Avaloncon helped retain many boardga-mers, because it was likely the only time to find players of "fringe games" (a lot of the hard-core wargames fall into this category) It also created an instant market for new wargames AH produced.

Looking back, it is easy to see that AH could be in a vastly different situation if it had made different decisions. Heck, if AH had invested money in a little software company back in the early 70's, we might have AH-DOS instead of MS-DOS. (just think of the cool games AH would have included in Windows instead of Solitaire and Minesweeper :)

But alas, hindsight is always 20/20, and is not really that useful. (other than helping to avoid making the same mistake twice).