Tuesday, June 23, 2020

Five Weeks of Plenty

Starting with the Magic Core Set 2021 on July 3rd -- prereleasing June 26th -- and continuing to Jumpstart on July 17th and Double Masters on August 7th, we are about to get an unprecedented bounty of three enormous, stacked, loaded Magic: the Gathering booster expansions, all released into a tenuous market.  And I really do mean "loaded;" the spoilers and set contents thus far are off-the-charts great and follow up on the pace that Mystery Booster set as a reprint panacea.

It will be extremely interesting to see what the sales curve looks like in terms of pre-orders into release day rack sales into following weeks' sales, and how that compares to a normal booster release's sales curve.  Players only earn so much money and they still gots' bills tuh' pay.

Double Masters is two products of course, including a "VIP pack" targeted at high spenders that features an array of the most demanded cards in the set in each ~$125+ "booster pack."  (Pricing is tentative this early on.)  It's a substantial enough configuration that I believe it will behave in essence like an additional booster release, except in tightly allocated quantities.  For that matter, we're only two weeks removed from Secret Lair Fetchlands, a ~$300+ box set, so we're really looking at a release slate that will feel like five major booster releases over a span of seven weeks.  Firehose of product, indeed.  But the sets are so loaded, I'm not sure demand will waver much.

I am more interested to see how game stores handle this overflowing chalice.  Many game stores float Magic releases on terms or on credit cards.  If the initial movement of a given product is slower than expected, because players have moved on mentally to the next one, that could hit their tripwire and result in a cash flow underrun.  Or, worse, if a store has been floating cash from one pre-order run to the next, and distribution forces a cash call or a second shutdown cuts off the daily sales that pay their ordinary overhead, or what have you, the same cash flow underrun danger exists.

Most stores won't broadcast their cash position, so the telltale sign that they were in trouble will be an unexpected closure or broad clearance sale during or shortly after the big releases drop.  In order to teach and be informative, I will now broadcast our cash position and explain what we're doing about all this.

Video games have run strong during this pandemic.  We are sold out of all current-generation systems and cannot get any more until we don't know when because none are arriving from manufacturers, production runs are still in progress as east Asian factories ramp back up post-COVID.  We get big shipments of controllers every week and almost immediately sell out.  White-hot game titles have been landing and selling through for the most part.  And the used market is on fire; we are almost out of Nintendo consoles, period, and low on games for most of them.  And we've seen big sales bumps for Playstation 3, Xbox 360, and Sega Genesis, in terms of used games that people are presumably catching up on that they missed.

Meanwhile, Magic cards have sold just fine, despite the lack of in-store events or gameplay.  This is surely a vote of faith on the part of our player community that we will eventually re-open the game room, and they are correct, we will.  It's great to have their support now, however, because it puts us in a position to be strong in ways like we're about to be.  And the flow of collections coming in on buys has been substantial, because several stores in town are not paying cash on buys, so those players are all coming to us.

Moreover, our expenses are mostly lower than usual right now, with the glaring exception that we are obligated to pay rent on square footage that includes an empty game room.  Due to the lack of events, staff hour counts are down in absolute terms.  Due to the product mix tilting so much toward used merch, distribution invoices are a lower percentage of the weekly nut.  Payroll and cost of goods are the two largest expense buckets, so when they both run shallow, life is pretty good.  And we've been fortunate to avoid any serious emergencies, like last summer's sudden air conditioner failure of one of our three roof units.  I'm not driving a Lamborghini just yet, but my stress level while sitting at my desk with the checkbook open is pretty low lately.

We do have credit terms with distribution and will accept shipments on that basis, and in an ordinary time you'd typically see us tailoring the numbers so that any given shipment is the amount of restock product and a few new releases that will sell through before the invoice comes due, freeing us up to use cash on hand to buy used merch walking in the door.  This is common to business.  The idea is that you use "someone else's money" to generate sales with margin and then pay back what you were fronted and pocket the profit.  Our cash flow is sufficient right now that we are purchasing the maximum available of each new set, and unlike many stores, we went in heavy on Jumpstart from the beginning, expecting it to be a hit and guessing correctly.  We're taking amounts well above what would sell through during the invoice's terms, because we already know we can cover the invoice without having to sell all the merch first.

All Magic products are allocated on release to some degree; as Michael Caffrey of Tales of Adventure noted in a Wizards discussion group, if you ask your distributor for one million dollars worth of a new Magic set and offer to pay up front in cash, they still won't do it.  Distributors are limiting all stores to purchases within their historic volume range and will surely continue to do so.  In our case this means we'll be getting our biggest ever purchase invoices, plus a bit more for growth, and know in advance that with no urgency to flip the goods quickly, we will be able to keep it in stock long after some of our competitors sell out.  We've been climbing into this position for a while now, and it's a far cry from 2015 when we struggled to hit invoices before they came due.  Now that constraint is gone, which means we can put our attention on having the goods for as long as possible, which is ultimately one of the strongest means of drawing business.

So that's where it all sits, today, on the cusp of five weeks of plenty.  I hope in week six I can look at the shelves and see a comfortable surplus of product and look in the bank and see a nice substantial balance.  Given the demand levels for both the Magic sets and for video games and other things we carry, that outcome seems likely.  And that's pretty great.

Tuesday, June 16, 2020

Calling It Fear Is Dishonest

You've heard it before, I'm sure.  "Don't live in fear."  Don't make your decisions based on fear.  Don't work how you work, live how you live, vote how you vote, based on fear.  You should just do whatever they're trying to roll you into doing, because if you don't, it must be because of fear, and fear is bad, and to be avoided.  No good person admits they experience fear.

That's dishonest, and it eliminates the most important layer of meaning from the Fear equation.  When someone says that about Fear, what they are really condemning is something anyone would condemn, and something that anyone would want to avoid, and that is Fear's bastard child, Cowardice.  And we'll explore that more in a moment.

But Fear has a legitimate child as well, and it is your ally.  A costly ally, but one that can be depended on through the worst challenges life has to throw at you.  And that is Responsibility.  Because when you harness the power of Responsibility, you gain Control.  And control of your life leads to stability, and contentment, and ultimately happiness.

To understand this, it's crucial to understand what fear means and does.  Because fear, as your ally, is a powerful tool.

In the child's mind, fear is the life preserver, the watchful eye and readiness to flee potential danger.  It's a simple kill switch and it usually works, and thus most children survive into adulthood none the worse for wear.

In the adult's mind, fear is more than that.  It builds the guideposts, and it raises the warning signs.  Fear builds layers of context until a mature human being can make decisions six mistakes upstream and avoid going bust or worse.

(1) You don't have that third beer because you need to be up early because your boss has warned you about late starts and you need that money to pay the bills or you end up hitting the breadline and the bricks.
(2) You don't have that third beer because it's the 29th of the month and you know the cops are going to be fishing for DUI arrests and you have a 24-mile commute each way and losing your license is essentially guaranteed unemployment, and you need that money to pay the bills or you end up hitting the breadline and the bricks.
(3) You don't have that third beer because that pretty thing you've been chatting up all night might not remember giving consent, and oh damn now you don't remember for sure either, and then your spouse isn't particularly amused at having to post your bail, and next thing you know all your stuff is out on the front lawn, and she cleans out your joint account, and you have no money and nowhere to stay, and you miss work again because of the arraignment, and now you have to fight a sexual assault charge, and your boss fires you, and you end up hitting the breadline and the bricks.
(4) You don't have that third beer because you don't want to pass out at 75 miles an hour on the I-10 overpass and end your tenure on this earth in a crush of metal and glass.

Nobody thinks through that in full conscious lucidity, but the adult brain processes it all through means of the fear of being left to the breadline and the bricks, or worse, by whatever twisting event sequence you get there, and in that ponderous moment... you lay off that third beer.  And the butterfly never flaps its wings, and Shanghai is spared the typhoon.

I'm sure we can all think of low points in our lives, or even unpleasant situations that weren't part of low points but were just acutely awful by themselves, and the inner urge to avoid revisiting those situations is fear working as a tool for you.  I fear going bust, because I've been there.  I have run completely out of money and been sleeping in someone else's garage, without a mailing address of my own, albeit briefly (I am fortunate) and I was able to take responsibility, gain control, and grind my way back up to solvency because I feared being at zero and being de facto helpless.  I will not allow myself to go bust again, it motivates me every day even though I am now a gigantic distance away from the point where such an outcome would be at risk again.  I am responsible for my own life, and thus I am not relinquishing control.

Cowardice is where the weak person quails in the face of fear and abdicates control.  Where instead of acting and moving forward, or even attempting it, the coward expects someone else to come along and save them.  And when it becomes an indecent spectacle because they grow to rationalize that they are entitled to be saved, embracing their impotence.

There are times when cowardice is forgivable.  Sufficiently traumatic experiences can overwhelm the conscious mind with a degree of fear that eludes grasp.  But that's not the everyday cowardice that ruins most lives.  The everyday cowardice is at a much lower and more basic level, and can be found in the routine evasion of necessary things.  In essence, in the failure to take responsibility, and thus to take control of one's life.  It's all written off to bad luck.  And that's the most corrosive way a person can lie to themselves.  Because everyone knows bad luck isn't your fault, right?

It's OK to get help.  It's not OK to demand it as if by right.  But it's OK to accept and admit what you fear, and then be responsible for overcoming it, thus taking control.

An encapsulation of the above concept can be found in the pilot episode of "Firefly," in Malcolm Reynolds's decisive moment right when all seems lost for the heroes:

"You depend on luck, you end up on the drift.  No fuel, no prospects, beggin' for Alliance make-work.  And towed out to the scrap belt.  That ain't us.  Not ever.  There's obstacles in our path, and we're gonna deal with them.  One by one."

And now, I'll leave you with a look at how we do this in the hobby game industry.

Q: Don't you fear widespread economic disaster?
A: After the way the last few months have gone, I fear this less than I fear localized disasters.  At least when everything was kaput due to COVID, everybody was in the same boat.  Well, a lot of us were.  Seems like the mass market wasn't suffering much at all.  But we were able to take shelter in the near-universalness of the bad situation.  Nobody would condemn us for being closed for the shutdown, or for adopting limited opening hours afterward.  Relatively few players are hassling us about the game room continuing to be closed, since most rational adults understand what is going on.  Customers, by and large, supported us generously and continue to do so.  It has been a struggle in many ways just to make sure we're still running the engine, but the answer to this has been to spend every day working either to generate revenue or on the maintenance of the infrastructure to generate revenue.  I've said before right here on this weblog, every day is an opportunity to advance the business some small amount.

Q: Don't you fear Amazon?
A: There is plenty to fear in Amazon's ability to deploy seemingly limitless resources to ruin the independent retailer facet of any particular product, line, category, or even business if Bezos and his minions so desire.  Rather than the coward's answer of cursing at the sky or hoping someone will take Amazon out of the equation somehow, the responsible retailer builds answers.  First, dealing in merchandise that does better with in-person shopping than via the Amazon marketplace, such as used video games.  Second, dealing in niche markets that have top-of-mind focus that Amazon isn't nimble enough to match, such as Magic singles.  Third, appropriately, with Third Place Theory, hosting events and gameplay.  Fourth, instead of beating them, by joining them, and selling through Amazon's platform.  There are other approaches that can work as well, but those are four clear viable ones.

Q: Don't you fear digital delivery obsoleting physical video game media?
A: I've reached this issue before here on the Backstage Pass, but really, we don't.  No single service is a true Netflix-for-Video-Games, although Xbox Game Pass is absolutely great and everyone should take advantage of it.  But with video games, it's not nearly as easy to create a seamless streaming catalog and interface that matches what physical media can do.  Not just in terms of fidelity, since that part will surely catch up as bandwidth and processing strength improve.  But in terms of licensing as well: Barely a fraction of the games out there are available via Xbox Game Pass, Playstation Now, or Nintendo Online.  Not that many more are available to buy from Xbox Live, Playstation Store, and Nintendo Network (now just Switch, thanks to the hax0rs).  And, de-listing happens all the time.  If you absolutely, positively, want to play a specific game, owning the physical media containing it is still the gold standard.  And that's just counting current games, not the immense depth of the retro back-catalog.  Even movie streaming is suffering from some of these same problems now.  Netflix today isn't the Netflix of a few years ago.  Each of the other services has carved off its licenses and exclusives.  To watch anything on demand, you'd have to subscribe to enough streams to make old-fashioned cable TV seem a bargain by comparison... or you could just own the disc and never face the question.  There's surely a trend line here, and I think we'll see an adjustment around five or ten years ahead.  Retro will still exist, but as old hardware ages and new audio and video technology continues to change, the used video game market will finally end up not cost-effective for the center-of-the-bell-curve mainstream gamer.  That means for the time being, our responsible play is to make hay while the sun shines.

Q: Don't you fear Magic dying?
A: If Magic can survive Homelands, Prophecy, and Saviors of Kamigawa, it's probably fine for the foreseeable.  Even with COVID forcing many players onto Arena, and things looking a little wee-woo back around April, the consensus has roared back loud and clear that the Magic experience is still at its best on the physical tabletop against live opponents.  I have some concern that the Reserved List continues to be something of a ticking time bomb, but in the progression of Modern Horizons, the Pioneer format, and the 2020 Year of Reprints, we can see Wizards setting the table for the eventual consignment of Reserved cards into unsupported play at some point.  Removing the Reserved List cards from Commander is the next big step that has to be taken.  Before you say they'd never do it, recognize that Wizards of the Coast has, very recently, shown that they are ready to remove cards from tournament play purely for reasons having nothing to do with card mechanics.  Anyway, even if they never printed another Magic card starting right this moment, Magic would still be played for decades.  The secondary market would undergo some pretty ferocious adjustments, but it would go on.  Far lesser TCGs that have been dead for years still have avid fan bases, and when you proportion that up against Magic, you can begin to appreciate the enormity of the latter.  And that's how most of us running game stores know we'll be punching our own ticket out long before Magic ever crumbles into dust.  So our plan becomes to monetize it for as long as we want, on terms that work for us, in business structures that work for us, and be ready to move on when it's no longer advantageous from our vantage point to do so.

Most other fears in this industry can be broken down similarly into components, and as long as our particular game store business can find a way to answer each component problem, we are responsible for our own sustainment and we are in control of our future.  It's a stark difference from the litany of retailers in many of the social media retailer groups whose first reaction to any problem of the moment is to curse the heavens and demand that someone, often a publisher, often Wizards of the Coast, rescue them somehow from whatever mundane problem their own incompetence has made blow up in their laps.  Wizards just fronted game stores a free rack of Mystery money and a loaded promo giveaway slate to help the responsible among us push forward past the difficulties of today so we can still sell their wares tomorrow.  The cowardice is pathetic indeed that takes such a boon and still refuses to fuel their own engine with it.

Above all, don't be trapped by the dishonest assertion that you are failing because of fear.  We can choose the coward's path, or we can choose responsibility and then attain control.  That choice will determine whether fear helped us or hindered us.  But there was no shame in knowing fear, and never will be.


Tuesday, June 2, 2020

Rot


"The most disgusting lies are dressed in beauty that'll rot."

Upon lease execution with a five-year personal guaranty, the hobby game store tenant discovered the real reason that suite was empty for as long as it was, at the bargain price it was offered.

After a torturous migration and thousands of dollars in sunk labor, the whiz-bang point-of-sale system that was promised to be fast, accurate, and rugged, turned out to be about the same as the one the store was using before.  In some ways, worse.

"Capital Funding" provided the partners with a fast deposit of $30,000 to cover the shortfalls from slow sales of overlapping high-profile TCG and wargames releases, money fronted with barely any questions asked and no credit check.  Two years later, the store was finally clear of the principal, having repaid a total of $52,516.

Two hot #1 spec books appeared on comic invoices for the week, and boxholders were lining up to pay a premium at their Friendly Local Comic Store to be sure they locked in copies without having to buy on eBay at ten times cover.  The comic distributor shorted all 50 copies of hottest spec book, and sent damaged copies of the second-hottest spec book.  The store filed a timely damage report, and was credited the wholesale price of the books.

The popular indie publisher touted the Friendly Local Game Store as the preferred channel for resale of their white-hot title, but then kept the entire next print run for themselves to sell on Amazon.

The wargame publisher offered generous terms and a top-flight IP.  The store discovered only later that most of the local player base for the game was content to play the figures they had already long since purchased from previously existing game stores, and that effectively sole distribution by the publisher meant any order error caused chaos with the store's efforts to impress the faithful players that remained.

A distributor promised generous allocations of the hot limited edition box set, and on delivery day provided its client stores with a modest quantity.  Plenty of stock was available to the public at market price on the distributor's backdoor direct-to-public website.

The enormous orders for hundreds of long-since-rotated staples seemed like easy money from somebody's silly spec, with none of the cards being factors in Modern or Legacy.  A week later, the Pioneer format was announced, and each of those cards looked likely to debut as metagame all-stars, and spiked tenfold in listed median price.

The rising star employee taking home that game without adding it to their tab was totally inadvertent, a complete accident.  Such a trusted individual would never steal from the company.

The eager beaver with Uncle Rich's bequeathal stood ready to change the tabletop world with their innovative game store idea.  Their $85,700 discharge under Chapter VII of the U.S. Bankruptcy Code will remain on their credit report until 2027.

Crowdfunding seemed like a natural way to ensure a title never lost money.  Only upon completion, when the final bills came due, was it apparent the "wild success" was financially catastrophic.  Game stores the world over fielded angry phone calls from buyers who wanted to know when stock would be delivered, and whether the store would match the original Kickstarter backer discount, even as the publisher prepared to crowdfund the second print run as a pyramid scheme to pay off obligations from the first.

He was the bright young prospect on the store's qualifying circuit team.  After coming close to the money and falling short due to inferior deck selection, he went on a grinding tear, living from deck to deck with the store and maxing out an entire rotisserie of credit cards before suddenly disappearing entirely. Conflicting reports from other players say his parents were on the hook for five figures in co-signed credit cards, or they had forced him to attend Gamblers Anonymous, or both.

She grew weary of her family asking when she was going to "get a real job," and stopped telling them about the tight budget weeks and about the trials and travails of the industry.  Soon, she stopped telling them about her successes as well.  Eventually, she and her family stopped talking at all.

Nobody picked up on the cues at first.  The edgelord player nobody liked was suddenly the soul of courtesy.  Under the fa├žade, the player was angry about being shot down for his unwelcome advances on the new female employee.  Then one night he tried to follow her home.  She says she feels safe for now, but ownership worries she's just putting on a brave face, and that the store ban, trespass order, and injunction won't be enough.

The sole proprietor turned to substance abuse as a brute-force means of fighting exhaustion, desperate to bottle lightning from the hot new release cycle before the revenue slowed.  And it worked!  The cash register sang and the customers happily spent.  He soon found himself turning to substance abuse as a comfort.  And then, eventually, long after squandering the windfall profit, he turned to it out of agony, because he couldn't stop.

Art credit: Varvara Snegiriova
Details have been altered/anonymized for references in this article to the experiences of individuals

Tuesday, May 26, 2020

General Announcement Regarding Reopening DSG's Game Room

QUICK AND DIRECT NEWS: The exact reopening date of the game room at Desert Sky Games will depend on CDC and AZDHS guidance for gatherings over the course of the next several weeks, and on Wizards of the Coast's decisions regarding the date that sanctioned play may resume.  The absolute soonest it will happen will be June 5th; we are not considering any dates before that.  We believe a more likely date is circa June 26th, the Magic Core Set 2021 Prerelease Week kickoff day.  However, it remains a moving target.  At this time we believe it is still imprudent for game stores to resume hosting tabletop gameplay, even though several are doing so.

RELEVANT AUTHORITY: Rumor has it that Governor Ducey will give us essentially free rein to re-open all aspects of our business on or around June 1st, to the extent that we don't have it already.  The CDC has already issued updated guidance that surface contact is no longer believed to be a critical vector for COVID spread, so we could in theory reopen the arcade at any time.  However, the CDC's same updated guidance re-emphasized that person-to-person respiratory spread is still considered a serious risk.  COVID is, after all, a respiratory virus.

EXPLANATION: Look, I have been a strong advocate of limiting the duration of the shutdowns and getting businesses back open.  I am a capitalist's own capitalist.  Nobody on this planet should think I'm making this decision from a standpoint of fear or an agenda to keep small businesses (including mine, apparently) stifled so I can, I don't know, enjoy quarantine or something?  I get that some people have taken advantage of this shutdown to enjoy a leisurely schedule of telework, if not an outright paid vacation.  And I'm enough of an anti-commuting advocate to appreciate how much some people may be enjoying the extra daily time.  But not all of us are lounging through this thing.  Obviously health professionals are slammed.  Everyone in food service has been working their tails off.  I've also been busy beyond all insanity since the shutdown began.  Turns out a couple of owners doing the work of ten staff members, or even half that, presents difficulty.

As I wrote recently, there is a very strong financial motive for DSG to reopen the game room.  It is going to happen.  Just not yet.  And the bottom line is we need to see the numbers continue to improve/flatten/trend_better before it seems prudent from a business standpoint to proceed, and even better would be that occurring in tandem with more favorable official guidance.

We're not a church, fortunately, because choirs were apparently early spread vectors, and basically rooms full of speaking or singing people are very dangerous, which is why all the concerts are still getting postponed.  A TCG tournament, however, is very like these things in terms of droplet emission, and a Dungeons & Dragons game is even worse so for its participants.  In-store gameplay remains an acute concern, while ordinary shopping activity at DSG is reasonably safe at this point by current reckoning.  And yes, we are buying Magic cards and video games and systems at this time.

Thank goodness, it's scorching hot outside already, and respiratory virii fare poorly under those conditions.  Once you come indoors, a sick person or asymptomatic carrier can still spread COVID via droplets, however, so we're not out of the woods yet on that count either.

Thanks to the CDC guidance update cited above, we will likely open the arcade in the near future before opening the rest of the game room.  We're wrapping up some upgrades and maintenance, and we're excited to let you all try them out.

Once we do re-open, the likelihood of us requiring waivers is high.  Unless the Arizona House's bill to shield businesses from COVID lawsuits, a bill that passed just before the chamber adjourned sine die, gets taken up and passed in the state Senate, we're forced to make all comers sign a binding contract indemnifying us from their own potential plague-ridden outcomes, which also means we won't be able to let minors into the game room without parental accompaniment, since minors cannot be bound under contract, which is what a waiver is.  I need the logistical hassle of running essentially a bowling alley but there's just the pro shop and no lanes, like I need a hole in my head.  So as you might imagine, even if we were not already inclined to wait for the health and protection of our staff and player community, we are also inclined to wait to give the legal landscape time to get dressed and compose itself.

I mentioned the Magic Core Set 2021 Prerelease Week above.  This is a tremendously smart thing Wizards has afforded stores the latitude to do.  The prerelease may be run as any number of events (not limited to nine) over the course of the entire week.  Stores that want to run a long series of eight-player pods, one at a time, to keep player counts low and reduce contagion risk, may do so, while still being able to sell through our prerelease product allotments and provide the prerelease gameplay experience our players enjoy so much.  DSG won't be re-opening the game room for this event in the direct face of strongly prohibitive guidance at that time, but if the coast is about as clear as we can realistically expect in today's circumstances, we will end up going ahead with it.

Thank you for your continued understanding and cooperation.

Tuesday, May 19, 2020

Returning to Cruising Altitude

I've been wanting to finish a couple of different incubating articles about broader industry topics, but I can barely find a few free hours these days.  Since so much plot is going by so quickly, I figured this would be another good opportunity to document some of what is happening.
We'll do this in no particular order.

The Governor's stay-at-home order for the month of April ended up lasting until just after the end of the month.  Most mass-market businesses never closed, so there was a real element of unfairness that I think we're going to see fallout from for years, in terms of how much the competitive table tilted against small businesses.

But in any event, on May 4th, small stores were allowed to open to shopping by appointment and curbside sales.  These were actually not permitted during the April shutdown in Arizona, but many stores just broke the rules and did whatever.  Given that none faced any penalties or consequences, it sounds like they guessed right.

Then, starting May 8th, we were allowed to open outright.  However, the 10-person-gathering limit is still in place, which makes it pointless to try to open the game room.  I am well aware that events can be run with as few as eight players, and that we would have two staff members at the front and shoppers wouldn't be near the players if we seated them deep in the room.  That calculus unfortunately misses the point that a game room is only cost-effective to have at all, if it is being filled and used with sales-driving events to a substantial amount of its capacity.  Even our reduced game room needs to see 20 to 30 people seated throughout a day to be worth opening and maintaining and so forth, and that's a scrape minimum.  So until we see significantly more lenient guidance on gatherings, our tables will remain off-limits.

The MTG Ikoria combined prerelease and release fell short in sales over the course of the weekend against the Theros and Eldraine prerelease weekends, but looks much better once I start correcting for differences.  Ikoria's release Friday of May 15th set a new record day for in-store sales.  The previous record was set on Mystery Booster release day, which had almost no pre-orders because Mystery didn't heat up until it was practically in our hands.  Ikoria had the most pre-orders we've fielded since probably Dominaria, possibly War of the Spark (they count differently but both did very well) and still posted a record sales day.  It was sweet both to set the new record and to have it break a record that only stood for two months, after that record had finally beaten the one from the release Friday of Modern Masters 2017.  But sure, Arena is killing paper Magic.  Whatevs, horse.  Anyway we're closed Sundays right now for a number of reasons and the Saturday fall-off for Ikoria wasn't too awful but put together it definitely made the weekend's entire take lower than that for a proper three-day prerelease, and in a few days we'll have a Memorial Day weekend that won't see the same voltage as a Magic release weekend following a prerelease, but Ikoria is still basically non-stop holy water after the enforced thirst of April.

One quick side note on Ikoria.  With the entire COVID mess, this may quietly go without a lot of notice, but the way that Wizards used an "overlay" to re-skin cards for the Godzilla IP is a huge step forward to bringing great licensed IP to the Magic: the Gathering universe.  Since every overlay is tied to a normal Magic card with Wizards's own IP, there is no danger of mechanically-unique reprints becoming impossible by means of an expiring license.  The game can use Hasbro's IP outright, and they can license basically anything else, and have it work without it ruining Magic as it otherwise could.  I posted the other day to Facebook that the team responsible for this idea deserved bonus checks.  I can't wait to see how far they take this.  Dungeons & Dragons?  Almost too easy, they could just print those cards outright but I suspect they want to future-proof that move.  Star Wars?  That's not especially Magic-esque, but possibly.  World of Darkness seems ideal, with very flavorful overlays on the Innistrad plane.  I think the richest vein will be those licensable properties that already overlap the most thematically, such as Harry Potter.  But they just did Godzilla and it was great, even though Godzilla has nothing to do with Magic, so what do I know.

Anyway, we started bringing the staff back on April 27th, the week before the re-opening.  Griffin and I had spent basically an entire month shipping online orders and doing store renovation projects, like upgrading our central video game merchandise "island" (photo above) and installing real cabinets for all the video game media.  The game room is smaller now but looks way nicer.  There are now color display cases on the racks for almost all cartridge titles, a subtle upgrade that adds tremendously to the shoppability of that merchandise.  The sales floor has been reconfigured to make more room for human beings during what we assume will be a prolonged period of social distancing.  The arcade has been under maintenance, but it's also not yet re-opened so that part isn't done.  And we have pleasant lighting effects added throughout the store with more still to come.  With the staff back on hand, we were able to restart most of the normal business processes and get ready to serve human beings on the premises.  That meant a bunch of quick cleanup of tools and materials and postponing a few upgrades for later.

Most of the staff was back in action by last week, and all our full-timers will be back by the start of next week.  Business does not support this staffing level yet, as one record sales day is unfortunately not a full offset to many very quiet days, so we went ahead and took the Paycheck Protection Program (PPP) loan.  It wasn't a ton of money, we could have survived without it, but the COVID pandemic absolutely had a substantial negative effect on our business, and with the loan fully forgivable if you spend 75% of it on payroll and 25% of it on rent, it was a no-brainer for us.  Our payroll and rent figures through June 30th easily exceed the PPP funding total.  It could end up being a bit of a mess when we go to have it forgiven, same as when we went through the process of getting it, but in the end it worked out on the front side, so hopefully the same will remain true when it comes time to close it out.

Many of my peers are taking the Emergency Intervention Disaster Loan (EIDL), and there is a business case that anyone who can qualify should take it as a gigantic hedge, particularly against the possibility of a late-2020 COVID resurgence.  I probably should be taking it too, but I really just don't want the debt.  Our balance sheet is pretty decent lately and should only get better as business returns to cruising altitude.  For the moment it seems like the funding has run out anyway, or is close to it.  If Congress reloads the trough, I'll reconsider pulling the trigger.

Distribution is finally like 90% of the way back.  We did get deliveries during the shutdown, despite that there wasn't a need to get some of that product, where the product in question is mainly meant for in-store discovery and purchase.  I would love to have gotten triple the video game consoles that were shipped in, but as it happens I'm glad we got what we got because it all has been selling quickly.  I wish I could say it has all been selling easily, but nothing is ever easy when you're a small business, and the shopper who has only ever bought from Amazon and Wal-Mart comes in expecting concierge service and abusable returns, all at impossibly low prices, and tends to end up unhappy with the experience that we delight our everyday visitors with.

Meanwhile, it has now been 90+ days since the last time anyone traded in a Nintendo Switch, Playstation 4, or Xbox One S or X.  Take that information as you will.  Have a great week!

Tuesday, May 12, 2020

Weekend Triome Resort Getaway

You'll have to pardon the lack of a full and proper article this week.  Our MTG Ikoria product arrived Monday, and it's the largest order of anything in our business's history.  Processing it and preparing the massive singles outlay is commanding my full attention and that of our staff for the time being.

This set is so bananas.  I'm extremely excited about it.  Not just for what's in there, but for what it suggests about what future sets could contain.  And I know everyone's angry about the high power level of the Companion ability, but I honestly think it could add a great new dimension to 60-card Magic as it develops further, the way Objectives did to the Star Wars CCG.  Not utterly mandatory, but you had to have a good reason not to be using one.

There has been an attempt at mob rabble against Mark Rosewater and the production team on Twitter and Tumblr with players accusing MaRo and Wizards of fumbling the ball on power balancing and not knowing what they are doing, since we've had some bans lately and we had a bad Standard last fall and winter.  It's true that the power level was pushed a bit, and it's certainly frustrating when it leads to an unattractive format.  But the reality is that Arena advanced deck tech faster than any tool used before, and brought powerful builds to the forefront at a far quicker cadence than Wizards had become accustomed to making format adjustments.  The answer is to expect them to adapt, which I imagine will happen, not to have Wizards significantly scale down card power.  Honestly, they should aim high every time, and anyone who thinks otherwise wasn't there during Homelands, Prophecy, or Saviors of Kamigawa.

That's about it for now, a partial article and concerned wholly with Magic, as there's not much to say about video games at the moment since so much stuff is sold out and distributors are bone dry on it.  With a new console generation on deck at the end of the year, I wonder if Sony and Microsoft are a little bit grateful that the quarantine cleared the channel of their old stock just in time for nobody to get stuck on piles of aging inventory.  It's a pleasant thought, anyway.

Tuesday, May 5, 2020

Cinco de Money

The governor permitted small retail stores like DSG to re-open Monday on a limited basis, with appointment service and obviously still no in-store gameplay.  The public responded to the tune of triple the sales of a normal Monday.  While we have no illusions that this pace is sustainable, it does speak to pent-up demand and is a relief to see after the awful level of politicization of the COVID shutdowns that has emerged in the public sphere.  We could have opened the doors to a cloud of inbound hate, but nothing of the sort materialized, thankfully.

We have plexiglass, masks, wipes, and hand sanitizer.  The floor has markings every six feet from the register.  Online orders continue to come in at a turgid pace, which is still a strain to keep up with on a staff that hasn't fully returned from furlough yet.  But we're managing it.
One of the things I'm happiest about is finally getting to return to tasks that generate money for the front-of-house primarily.  I put all of that on the back burner when we closed, because we could not possibly benefit from it until we re-opened.  Stuff like processing video game buys, that sort of thing. As a result, gigantic piles of systems, games, controllers, and accessories built up in my office, unattended to.  I am now digging my way through those piles and getting stuff out onto the racks and into the cases just in time for people to come purchase it.  In one case earlier today, I wasn't even finished, a gentleman arrived asking for a particular Rock Band guitar instrument that was still in processing backstage.  I had my staff wipe it down, I added it to the system, didn't bother with a barcode and label, and we just took care of the guy.  There's a lot of such ad-hoc work right now, as we expected.  Our data mining will be imperfect, but I don't like turning down money.

My back-office staff will be at full-strength-minus-one starting next Monday, and that's a good thing, because the process of adding singles to stock was one of the things we just grudgingly accepted as being done less during this whole ordeal.  As a result, our singles stock has thinned.  It's good as far as getting some money for cards we've long since needed to see move.  It's bad as far as projecting abundance and the confidence of being a store with all the major staples in stock.  Once we've normalized front-end ops to meet the new reality, complete with our appointment logging, we should have a better idea of how much labor can be pivoted over to bridge the gap of big piles of bought collections that have fallen behind pace in being added to stock.  Griffin tried to keep the shiniest and most useful things we encountered in sorting available for purchase, but he could only do so much while we simultaneously worked on all the other maintenance, cleaning, repair, upgrading, and oh yeah, shipping out the daily torrent of orders that never really did slow down.

Today is the Cinco de Mayo that isn't.  There will be no fiesta, no margaritas, no tacos... well, actually, yes, those last two we will have.  But no fiesta.  And there's something fundamentally wrong with that.  But however much we're able to take part in, we are going to do so, in celebration of being able to get back to business.  The month with locked doors was a slog, and while I honestly think we seized some opportunities -- just wait until our photo spread with the extensive facelift we've given the store facilty -- it was also mentally straining, stressful, and stretched us thin.  Every morning right now, as soon as that first customer walks in the door, it's one little victory.

Now let's see what happens next week with Ikoria.