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Tuesday, January 27, 2015

MTG Fate Reforged Release Post-Mortem

I'm always happy when there is a new Magic: the Gathering expansion released.  Even the ones that are not well received by the public sell very well out of the gate.  Dealers and players alike grouse about Born of the Gods and Dragon's Maze, but both set records at the time for daily revenue for us, and I'm sure we were not alone.  The difference was that neither set had "legs" for various reasons.  (I have to imagine that there being zero dragon cards in a set called "Dragon's Maze" was a disappointment to some number of players.)

We heard all about how Fate Reforged was going to be bad, and then as with those earlier releases, it has sold very well to start.  Will the set have "legs" this time?  Probably not like Khans did, but look at what Fate gave us:

  • A colorless planeswalker, Ugin, the Spirit Dragon, that goes into something like 96% of all Commander decks and may be viable in other formats as well;
  • Five low-cost Legends with three-color identities for Commander and Tiny Leaders;
  • Clear Standard "push" mythics* in the vein of Falkenrath Aristocrat or Voice of Resurgence, this time Warden of the First Tree, Monastery Mentor, and likely a few others as well;
  • Special basic lands for which the foils will be in demand;
  • Special promotional alternate-art cards from the Ugin's Fate packs;
  • "Money" uncommons in Valorous Stance and Reality Shift; and
  • Fetchlands at a rate of about 1.5 per box.

How different is that from Khans, really?  Not very different if you ask me.

At the same time, it's true that less Fate Reforged product will be purchased in the aggregate regardless of card quality because:

  • It is a small set and fewer total cards are needed to complete it;
  • It will be drafted one pack per player, but at least that will occur for two set cycles just as would occur for previous small sets; and
  • It was released during a slow retail season, late winter.

Our prerelease for Fate Reforged attracted 268 players, beating our previous record for Khans of 263 players.  We were allocated 340 packs for both events, but for Khans we were still using our practice of doubling the prize payout by consuming pre-release packs for prize product.  With that stifling our ability to grow and WOTC's new policy prohibiting most of how a store might monetize leftover promotional foils, we believed it was time to do something different.

For $28.99, tax included (so really about $26.50), players received their tournament entry, pre-release pack, two boosters worth of prize support (provided by WOTC), and a random draw from our $3,000 Prize Vault.  The Vault was valued at retail and contained several jackpots:

  • A Duel Decks Anthology; 
  • A Star Wars Xbox 360 complete in box;
  • A bevy of booster packs and starter decks ranging from foreign 4th Edition to foreign Khans of Tarkir; 
  • Assorted playmats;
  • Assorted sleeves;
  • Assorted promo cards (this made up the bulk of the Vault).

We did this patterning after Pat's Magic Place in Austin, Texas, who pioneered the Prize Vault concept.  However, upon listening to player feedback, we discovered that players who received sleeves or better were very happy, while players who received less than sleeves (for example, a booster pack of foreign M14) felt like they had essentially received nothing.  This is a fair reaction and it was what we were seeking to discover.

Dragons of Tarkir has its prerelease in March and we're going to contemplate how to proceed in terms of pricing and prizing/benefits.  We will not be repeating the Prize Vault again; we don't think it had any promotional impact or lasting impression and it created disappointment where no disappointment needed to exist.  Discovering that players liked getting sleeves was huge, though, because truly we recognize that players wish to sleeve their prerelease decks and only the thriftiest of players keep a spare set of sleeves ready to hand for this, so most have to buy.

Accordingly, we have a gamut of options ranging from simply charging $25.99 (MSRP) for the event and prizing the two boosters directly, to keeping it at $28.99 and providing a complimentary 50-pack of sleeves.  It has proven prohibitive in terms of labor to do much else differently with prizing, and we won't consume pre-release packs the way we used to, because that constrains our future allocations.

Price-sensitive players would certainly vote for the $25.99 option, but we haven't really been getting those players anyway, at least in general.  There are stores in town that, for reasons of their own, discount the prerelease, in some cases deeply.  As Gary Ray wrote, this is a terrible idea and is devaluing one of the few "get healthy" goods or services a game store has in its cupboard.  If we are offering the same value as the other guys but for more money, our prospects of a sellout rest entirely on us having a cleaner and more comfortable store that is more pleasant to play in (and, for players who live near us, location convenience).  We do have a clean and comfortable store, but I'd rather not depend on that factor exclusively.  You never want to put all your eggs in one basket.

The argument in favor of staying "premium" on both price and benefit is that we already had players accustomed to paying $30 for the event, since as far back as when we opened.  Clearly we have an audience that has already made the decision that a premium event is acceptable.  If we reduce the price now, what does it tell them about the value of what they purchased before?  I don't think this is a tremendously critical factor and I am leaning toward not worrying about it and just performing customer recovery if I become aware of any serious complaints, but it's a factor I want to make sure we have considered.

In terms of the release itself, we did something a little different with our case breaks.  Usually we try to open a grouping of consecutively-coded cases to ensure that we receive as even as possible a rare spread.  We simply want to make par on our outcomes -- the risk of a poor yield overrides the benefit of a good one.  However, with a small set like this, a "jagged" yield of rares is less of a problem, and we wanted to see if there was any truth to the rumors that the collation in fat packs and prerelease packs favored higher-value rares or mythics.  We opened the pack equivalent of just over three cases, essentially ~640-650 boosters.  This was a very low opening total for us; we opened 15 cases of Khans of Tarkir because that's the typical par rate for a complete foil set with mythics.  For Fate Reforged, our mythic yield was as follows:

  • 08 Ugin, the Spirit Dragon
  • 06 Monastery Mentor
  • 09 Soulfire Grand Master
  • 05 Temporal Trespass
  • 14 Torrent Elemental
  • 10 Brutal Hordechief
  • 06 Ghastly Conscription
  • 06 Shaman of the Great Hunt
  • 08 Warden of the First Tree
  • 08 Whisperwood Elemental

We totaled exactly 80 mythics, averaging 8 of each, and had two wide outliers in our five Temporal Trespasses and our fourteen (!) Torrent Elementals.  The rest were within normal statistical variation. This indicates that there is really no difference in the pack collation regardless of source (booster cases, fat packs, prerelease packs) as long as you're opening enough to smooth out the yield.

Opening our singles in that way preserved several cases of boosters, and we are seeing brisk business on box purchases regardless of the supposed underwhelm of Fate Reforged generally.  Despite "shorting this stock" and ordering low compared to Khans of Tarkir and being cut in allocation slightly by my distributors, I am loaded a bit higher on inventory than I would like to be.  I have about 100 boxes remaining after release weekend and I am assured not to sell through before terms become due on the portion of those not yet paid for.  I am confident that it will turn at an acceptable rate and put us in a good position not to have to restock for a while, while maintaining efficiency of margin, but fortunately I will have enough spare cash on hand after achieving efficiency overall to front the difference and collect it over the weeks that follow.  We sell boosters at MSRP and boxes at 20% off MSRP, making off-the-shelf booster box sales about $114.80, or ~$123 after tax.

There we have it!  On the overall, I think the Fate Reforged release cycle worked out well for us and that we didn't create a lot of unnecessary waste and loss.  I think we had some misallocation of labor and promotion with the Prize Vault, but that's easily enough solved by moving to a different promotional framework for the next event.  I'm glad I bet low on ordering totals, but still had good sales as a proportion of those, and I expect to bet considerably higher on Dragons of Tarkir, especially if the other five fetchlands appear in the set as expected.

*When mythic rares were first released, Mark Rosewater promised they would be splashy, epic things and not standard staples that players needed in order to stay competitive.  To this day his integrity is depleted in my mind because of how much that turned out to be empty spin.  For the Alara block, the rule held almost true -- Elspeth, Knight Errant turned into a four-of, but mostly the mythic rares in that block were indeed epic, splashy creatures and spells that didn't force players to chase them down in order to be competitive.  The Zendikar block then brought Lotus Cobra, Vengevine, and Jace, the Mind Sculptor, among others.  Yeah.  After that we saw Mox Opal, Liliana of the Veil, Geist of Saint Traft, Falkenrath Aristocrat, Brimaz, Archangel of Thune, and ugh, the worst offender... Voice of Resurgence.  Fate Reforged unfortunately makes this state of affairs permanent, as many of its mythic rares appear designed deliberately as Standard "push" cards.  Far be it from me to tell WOTC not to make money where they can... just don't try to tell us that's not what you're doing.

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