Tea, Earl Grey, Hot

I've frequently asserted that we are three Star Trek technologies away from essentially saving humanity forever:

Replicators - ending starvation and poverty;
Transporters - trivializing the cost of transporting anything or anyone; and
Holodecks - allowing anyone to experience virtually anything as if real.

If you want to add a fourth, something like Matrix-style brain uploads, presumably to allow later re-download into a fresh "shell," that would effectively confer immortality as well.  Humanity would never again suffer for want nor lose our loved ones to the scourge of death.

I will physically die before these come to pass, and that's a shame, because I want to, you know, not die.  But I am comforted in some small measure knowing that at least one of these technologies is well into development, and by that I mean the baby steps being taken toward replicators, by means of 3-D printers.

This isn't an article about 3-D printers.  You can find out more about those elsewhere and honestly I don't care that much about them as I have only marginal use for their output.

This article is more of a quick riff on what 3-D printers mean for my industry, for the greater toy and game industry overall, and when we might feel that effect.  In particular, for miniature wargames, where they are seeing their first pronounced adoption.

First of all, I am reliably informed that the output of the best 3-D printers on the market is substantially lower resolution and quality than anything Games Workshop is squirting in Nottingham or what WizKids is freighting out of Shenzhen.  There is no threat to the meat of our current product offerings; available minis are simply better right now, and to replicate their quality would cost considerably more at the consumer level than just buying what's already in mass production.

However, 3-D printers are already highly relevant for terrain, necessary wargame components where resolution is less important than quantity and coverage.  Wargamers the world over are making copious terrain at the cost of electricity and filament and capital equipment depreciation and even though it feels like one of the "craft" elements of the category is going to get lost in the transition, the end result is more people being able to engage, which I favor.

It's only a matter of time before it goes farther.

Resolution is hardly essential for printing coarser toys aimed at younger audiences.  Right now such toys are typically produced in China for a tiny fraction of what it would cost to 3-D print them, so there's no urgency upstairs at Hasbro or Mattel, and there shouldn't be.

What about parts and hardware that are out of production?  3-D printers are starting to become a bigger and bigger deal in the pinball and arcade restoration hobbies, where there are parts that are literally antique and have not been produced since Jimmy Carter was still calling the shots in Georgia.  As tensile strength improves we're seeing the technology used for vehicle parts as well, though mostly low-impact hardware so far, and not motor components.  Yet.

This is setting up an eventual showdown in the world of intellectual property.  The cost continues to drop to make ever-newer objects via 3-D printer.  Nobody cares about the old pinball machine parts because they are (mostly) out of patent, out of copyright, and the addressable audience is niche.  What happens when some hot toy or game or gadget is being duplicated immediately, and not just in bootleg-producing factories in southeast Asia, but by consumers in their living rooms in a nigh-unenforceable tsunami of, well, piracy?

Has anything like this happened before?

Turns out...

So, here we are a decade and a half later and the music industry is changed forever in the wake of it becoming possible to effectively infinitely duplicate its copyrighted core product in an ordinary household using consumer-grade gear.

The situation was so drastic, so sudden, and so immediately obvious once the technology hit a threshold that was "close enough" -- by which we mean garbage-bitrate MP3s on peer-to-peer client programs -- that the number of people paying full price for the "real thing" plummeted and never recovered.

Unless your daily bread came from the music industry both then and now, I can't imagine you see things today as worse.  The consumer landscape for music (and movies, for that matter, which followed suit a few years later as computing horsepower and internet bandwidth caught up) has never been friendlier or more cost-effective when done legally than it is now.  I wrote about this recently here on The Backstage Pass; the value now is in being legit and letting someone else do the heavy lifting and bring the content to you.  It is a time of immense plenty even without piracy.

So it will be in the post-Replicator era.  There won't be as much money to be made in selling plastic bits as such, but they'll still find a way to monetize the Delivery Of Game Entertainment Content.  Maybe it will be some sort of analogue of music or movie streaming.  Meepleflix.  Muluu.  Amazon Prime.  Whatever.

Presently, my daily bread comes from the Selling Game Things Industry.  And if we reach that tipping point with 3-D printing where the toboggan ride down must inexorably begin and set off the chain reaction that will eventually resolve, well.  Let's be honest here, even if we're not talking about wargames but just focusing on regular tabletop: Printing up a bunch of meeples and a game board ain't exactly gonna be a challenge.  I know the outcome will ultimately be better for the consumer when the dust clears.  I just have to look out for that whole part where the floor falls out from under my livelihood.  Nobody wants to be the last person standing when the music stops.

Anyone who wants to get busy on the whole brain-upload thing, I'd appreciate it.

Getting Ready for Holiday Shopping

Last week, about a dozen game store owners from around the country gathered in Arizona for a business conference.  We had a delightful time touring area stores, enjoying lunches and dinners at great eateries, basking in a stretch of spectacular weather, and then, on the last day of the event, tearing down DSG's retail floor and rebuilding it to appeal to holiday shopping.

I am humbled beyond words that these friends and peers of mine would give so freely of themselves and their expertise and time and labor to help make my store better like this.  And make no mistake, it is better, even though it turned some of our process and routine on their sides.

We had some prerogatives to follow, based on the categories and how they performed over the initial year in Chandler.  For 2018, we need to see a good holiday season.  It will shape some of our decisions for years to come.  Every category has its own business attributes and objectives.  If we get to the Year of Our Lord Two Thousand Nineteen and we haven't seen the kind of results we need out of a category, it's probably time for us to move in another direction, because after six-plus years in business it's unlikely that there's yet another approach we should have been trying, and more likely that it's a product category that we are just not positioned for.  Market saturation, lack of expertise, branding, whatever else is causing the suppression, it's obviously here to stay and we're wasting treasure we could be using to make Magic and video games better.

Indeed, Magic and video games are proven at this point, nothing that happens is going to stop us from continuing to invest in those categories this coming year at least.  We're approaching a healthy spot with Pokemon and we're going to continue working with our event champion on that because he seems to have a really good handle on it.  Other TCGs are a mixed bag lately so we'll see what happens.  Living Card Games are dead, and it's a shame that they are.

We see comics, minis, and RPGs as categories that appeal to people who are already deep in the hobby, who mostly already know what they are looking at when they stand in front of a store shelf.  Developing those categories mostly consists of bolstering what we already have and making it easier to shop, so that's the plan.

But board games, that's where we reach into the vast blue ocean mainstream of visitors, above and beyond the devoted board game faithful.  That's where our greatest growth potential is, that's where the size and scope of our store have the best chance to make an impression.  Board games did reasonably well for us in late 2017 despite the store suffering a bit from the move and whatever other factors.  We let the category lie fallow for most of mid-2018 because the key new releases don't tend to hit until late in the year and it wasn't tough to keep essentials on the racks at maintenance stock levels.

Now that it's coming up on that time again for the year, board games is our opportunity to "take a level."  It's our best chance to take the folks who wander over from the mini golf place next door and make them gamers.

With those guiding objectives in mind, my retailer friends cut loose on my retail floor and recombobulated just about the entire thing in the space of one long afternoon and evening.  Here's what happened.

Right from the entry you can see clear through the entire area, to the D&D racks at the back.  This is also highly visible when the store is closed for the night, so anyone who missed us can at least instantly see a ton of what we do: board games, video games, minis, and RPGs.

We put the kid-oriented and family-oriented games together and adjoined the all-ages comics to create a corner of the floor that caters to youth players and readers.  It's also close to the arcade so it's where they are likely to be walking toward or through anyway.

Light-hearted board game fare appears together with familiar titles and styles.

Deeper strategy titles are easy to locate and right in the center of the floor.

Demo tables!  I have some specific titles coming in to fill in the tables that aren't prepped yet, but Splendor is a perpetual winner so we'll likely keep that one set up.  Our pace of business is such that teaching an entire game is probably not realistic.  What I hope to be able to do with staff is speak competently to how the game plays.  "You try to collect the right combination of gems, and new gem cards come in to replace them, and when you have the gemstones these four nobles are looking for, they will come to you and you score their points.  So you can focus on scoring gem cards, scoring nobles, or combining the two, based on what gems come your way."

I had art prints on one of the RPG racks and while I think those are cool to have, I don't think DSG was well positioned to sell them.  Those are making their way up to a friend's store in Colorado where he will experiment with them and see how that goes.  Our two RPG racks now are going to be spiffed up a bit to where one of them is all-D&D-all-the-time, and the other features other RPGs as well as comic trades and accessories (the comic section adjoins to the right).

We experimented with a combined paint rack tower and after a few Tetris attempts we realized it wasn't as shoppable as we thought.  But the rearranging got the paint out of a corner alley where it was even less shoppable, so we didn't want to put it back the way it was.  We found an answer right out of the old DSG Gilbert location: now that Warhammer and the D&D minis are spread out across multiple aisles, each aisle caps nicely with a paint rack.

Party games are one of the better-traffic categories we have for tabletop and they appeal to mainstream shoppers.  We found it possible to combine it all here in a mid-floor rack rather than having it off to the side blocking the throughway to the game room.

Anyway we have a bit more work to do to bring this project home, including bringing sleeves, playmats, and card storage out onto a gridwall rack that we didn't have before.

What did we lose?  That square footage had to come from somewhere.  With no prerelease on the horizon until January and the end of the PPTQ program for Magic, we took advantage of not needing as much event floor.  With some careful adjustment there we actually don't lose much seating either.  Basically the "gate" area between the main room and game room is still kind of a mess as we figure out the best way to situate everything.  In the long run, with two new stores opening for every one that closes, we need to add shopping strength more than we need to add event strength.  (Our event strength is also already pretty good, possibly wastefully so.)

It's October 23rd, and that means we have just a touch over two months to see what happens.  Already over the weekend we saw the sales mix get a little more variety, in what was otherwise a slightly below average frame.  We have a lot of inventory on hand already and more already scheduled to arrive in the weeks ahead.  It's go time.  Store looks ready.

Perpendicular

A lot of people already have the things I sell.  But they like those things and are looking for more things like that.  But, no, not really.  They aren't looking for things like that.  They're looking for more things that are that that.

Obviously that's not literally possible, but it's the shape of the inquiry.  They're hoping perhaps something new has arrived that's more of that that, and perhaps we've got it ready to sell.  And honestly, I want visitors to have exactly this mindset.  It's wonderful for us.  I myself have been that visitor many times.  I have been the guy who has walked into the store knowing what they have, and what I like, and knowing what they have that I like, and either I already have it, or already decided it's not for me, but wait -- what if maybe they have something else that is also that specific thing I like?

They probably already know about products that are parallel to what they know they like.  Sometimes parallel products work fine.  Everyone knows what's going on when they buy guild-themed sleeves and deck boxes for Magic's Guilds of Ravnica expansion.  I'm not even talking about licensed merch as such, but parallel merch implies that it has a direct tie to the reference product and is a natural extension of what you might buy if you bought or own the reference product.  The elusive D&D Spell Cards are another good example.  Technically not required for play, but many players want them.  It's also not a stretch to stock them, from a business perspective.

There's a marketing truism that you have a greater chance of success by making something a few people love, rather than making something everyone meh kinda likes.  The thing everyone likes may seem like a safer thing to make or sell.  But they won't feel the same level of excitement when they discover it, and that means they may not feel the same urgency to buy.  By contrast, make something that a few people utterly love, and they'll buy it the moment they find it.  And what's more, you've probably earned a happy customer.  People absolutely love the feeling that you had something just for them.  (Or for their tiny niche of fans, anyway.)

Of course, the challenge is finding such merch.  Merch that is not parallel, but perpendicular.

OK, that's a pretty extreme example... but wow, that PS2 aquarium is full commitment to the concept.

Loot Crate is an example of a company that uses perpendicular pop culture goods as the primary attraction.  If you've ever gotten their subscription box, it's not exactly filled with durables.  The pop-culture "exclusives" you get were manufactured specifically for the offering.  It's very much a Franklin Mint scenario, and an awful lot of it amounts to shelf junk.  But I tell you what, I got a loot crate secondhand and it had an Assassin's Creed scarf in it.  I don't live in a place where we need scarves very often.  And I'm only casually familiar with the Assassin's Creed series.  But I got it.  It wasn't even aimed at me and I saw why someone would be delighted to get this thing.  Some Assassin's Creed devotee got that month's Loot Crate collection and opened it up and saw this scarf and it blew their system right out.

I've made a few attempts in this space and will continue to.  More often, I am encountering the stuff as a consumer, because the possibilities are so vast.  One of my employees knew I was a fan of Metroid and Iron Maiden, and what do you figure he found?  Its licensing legitimacy is questionable, but hot damn, is that ever a cool thing.  I've bought Ori and the Blind Forest socks.  And who hasn't seen comic convention attendees sporting homemade riffs on Jayne Cobb's cunning hat?

Probably the coolest perpendicular merch I've sold has been solid-silver Jace coins and giant plush Triforces.  (In fact, I have the Triforces in stock now and my DSG price is lower than what you'd pay on Amazon, a phrase you might as well get used to because it's going to get more and more common as the ease of frictionless "press the buy button" continues to override price resistance.)  Also the WizKids D&D Trophy Plaques.  Who doesn't want a big wicked-looking dragon head on their game room wall?  Or a mind flayer head.  Or a floating beholder.  Even at a price tag of a few hundred bucks per unit, we've gone through several of each.

My biggest shot at this was one where I chickened out.  I had a black and hunter-green Acura Integra that I had bought just as a silly tuner car to commute with.  It had sweet rims, a turbocharger on the engine, and a tactile thrill to drive.  I was going to set it up as grand prize at the biggest tournament we could muster in late 2012, as "the Golgari car."  I would have had some graphics applied and gotten it cleaned on up.  I think it would have been a marketing home run.  I couldn't quite make the economics work; I had to clear $2k on the car to make it worth selling it, and my best tournament math had our likely direct take barely clearing that figure ($25 entry and 80 players to par).  And that would only have covered first prize, not the rest of the prize slate.  And when Wizards tried to award a Magic-themed Toyota FJ truck at the Pro Tour World Championship, they were hit with a raft of complaints.  I decided discretion was the better part of glory, and ended up selling the car the ordinary way instead.

Perpendicular merch is, by definition, tough to find.  Its very nature is that it's not the first thing you think of when you're thinking of the reference product it ties to.  But I want to keep my eyes and ears open and take better advantage of these opportunities, because even at the risk that I'm going to be sitting on it for a while, this kind of merch is going to be something somebody out there loves.  Possibly only one person.  But someone.  And that person is going to love DSG forever, and on top of that I end up getting dollars of money out of the deal.  This ain't rocket surgery.  Oh, it's difficult to pull off, but the decision to try it shouldn't be difficult in the slightest.

I'm keeping this scarf.  I'm going to wear it this week on a business trip to Prescott.  This is one seriously cool scarf.

Shoes Dropping Nonstop These Days

So, earlier this summer, Wizards of the coast ended direct distribution to stores.  I discussed it in an article at the time.  This was a significant shoe drop to independent stores, who would find themselves forced to develop professional relationships with distributors, rather than being ascended consumers who can treat Wizards Direct sort of like a gated Amazon Prime for clubhouse stores.

My rationale for Wizards' move was that they are finally positioned so that they can leverage the mass market and don't need to depend on flighty, unreliable independents to grow and nurture the Magic: the Gathering brand.

Then, the other shoe dropped. Wizards announced that the premium version of Guilds of Ravnica booster boxes, the Mythic Edition, would be exclusive to the Hasbro online store, and independents were shut out.  I discussed this in an article as well.

I didn't see this as the apocalyptic end of our sector like some did, and we still had early release booster boxes to benefit from, but make no mistake, this was a big miss for us.  The optics of the exclusivity, given the easily foreseeable demand for masterpiece planeswalkers that were included only in the Mythic Edition boxes, were significant.

Right after that, yet another shoe dropped.  Wizards decided to tell us they were selling direct to the public on Amazon's, Walmart's, and Target's e-commerce channels, and moreover, that they would not honor their own MSRP.  I discussed this in, yep, an article here on The Backstage Pass.

Wizards did some spin control, particularly via Mark Rosewater's weblog, insisting that the direct sales via Amazon were to help Magic reach audiences that were not served by independent stores.  That wasn't the part that was troublesome, and they know better.  Nobody minds direct sales to consumers by publishers, when the publisher honors its own MSRP.  Games Workshop, Fantasy Flight, Nintendo, Microsoft, and others already figured this out.  The problem was that booster boxes straight from the source opened at ~$94 on Amazon, a crushing discount from the putative MSRP of $143.64.  We've seen some regression to the mean since then, with boxes approaching $98 as of this writing, but it still leaves Magic as now being the worst-margin product in the comic and hobby game trade.

[Dukes of Hazzard narrator voice] By now you probably think them Coast Boys had gotten into just about as much trouble as they could manage.  But nope, you'd be wrong about that.  Turns out they was just gittin' started. [/narrator]

Sure enough, another shoe was in the queue.  The end of the most common form of WPN store participation in the Magic Pro Tour qualification system, announced during garbage time last Friday.

I'm not going to address the moniker "MagicFest" beyond observing that it's comically bad.  I'm also not going to address the ongoing issues with having the entire Grand Prix circuit operated by a single exclusive vendor, Channel Fireball.  CFB, love them or hate them, paid their money for that exclusivity and they have every right to exploit it to the hilt.  If we don't like it, our option is to stop playing at those events.  But when a GP is available within driving distance, most pro-tour hopefuls have all the willpower and impulse control of a homeless crackhead, so that's not going to happen.

The big blowout is that Preliminary Pro-Tour Qualifiers are going to cease.  You might think I am writing this article to complain about that.  I am not.  PPTQs are, in my view, a failed experiment.  In regions with competitive store counts like this one, they basically eliminated Saturdays from the event calendar to a degree.  Before PPTQs, back in the halcyon days of 2013, DSG used to attract fifty players to its Saturday nooner Standard event.  Now, when it's not our turn at the PPTQ wheel, we push our weekly double-stakes Standard to 6pm so that people who don't make top 8 at the PPTQ ten miles away can still make it, and we usually fire.  Usually.  It will be nice to come back to a landscape where Saturdays do as well as Fridays in terms of event traction and associated sales activity.

It also became something of a feelbad for players to win a PPTQ, sometimes against a reasonable player count -- stores like DSG as well as Phoenix-area mainstays like Play or Draw and Manawerx routinely drew 70 to 80 players or more -- only to find out that all they won was a chance to drive to the Regional PTQ in San Diego and hope not to get a bad draw in a single-round playoff where the top four finally, at last, qualified for the Pro Tour.  I still see it as ridiculous that Phoenix never got a single Regional PTQ.  I contacted Wizards and offered to host one for free, just for the prestige.  For whatever reason, we didn't meet their needs or plans.

That is where I worry the most about reducing qualification opportunities to single giant open qualifiers once per season or so in major cities.  I have no fear that my store is up to snuff -- we literally have the largest store in Arizona and can seat the most players, and one of our owners is already a level 2 judge.  What I fear is that for reasons arbitrary or unknown, we simply won't be selected for it, and won't know why we weren't selected.  That's how it was before PPTQs.  We had, at the time, the newest, nicest, cleanest, most comfortable store in town, and we got to sit there like chumps and watch PTQs take place in rented rooms with no air conditioning, hosted by competitors.  Not even making that up.  It happened.  And I can't fault that store for taking the event, it would have been foolish of them not to.  Because money.

And if I can't be sure of an opportunity to participate, with DSG's huge structural advantages, how can any large-scale store be confident that they will have a shot?  Will it be an old-boys club like the PTQs of old?  That's not how Wizards typically operates anymore -- as a progressive company in a progressive community, Wizards has been on the forefront of pushing greater inclusion in all things, and it's encouraging that they've been in the business of opening doors, not closing them.  But with the Shoevalanche cited above, it's easy to envision Hasbro not giving a damn and Wizards being forced to do things the cheapest and easiest possible way... and you know what's cheap and easy?  Relegating things to the old-boys club.

The alternative route being offered are invitational events that will be smaller and easier to qualify through for those who meet some threshold.  And for those events, our size and scale don't make any difference.  There are cozy ultraboutiques in town that look fantastic but really don't run deep into competitive Magic, and they may end up getting the call for this stuff because of the optics.  Do I spend a bunch of resources making my store prettier, in an attempt to cover our bases on this?  I try to make the store look a little better every day, but it's a hell of a lot more expensive to renovate 6400 square feet than 2400 square feet.  With an unknown and unknowable ROI, it's hard to make a business case that I should spend deeply into this sooner rather than later.

I've hinted before here, and discussed at length with other retailers in our private groups, that events and organized play have become something of a liability anyway, and maybe it's just as well that we're rendering all this to chance.  I firmly believe that some amount of organized play is essential to a store in our industry, because it adds significant value to games that have constructible-deck and constructible-army mechanics.  Even before you get past Magic and Warhammer, there's real traction there.  As an industry we're still groping and grasping at the reality that we have to find ways to monetize organized play sustainably, while not handing a blank check to the clubhouse down the street that uses cut corners to subsidize grinder play.  That is an entire unsolved equation inextricably tied to the economics of the products involved.

But with all these shoes dropping every which way from Wizards of the Coast and Hasbro, publisher of the biggest product in our industry and my biggest single revenue line, it's clear that the safe haven is going to be a shelter constructed of other, less turbulent revenue lines.

How many stores will even have the option to make such a lateral shift?