Chaos and Capacitors

I don't have a whole lot of time this week, so I bumped the articles I started weeks ago that I figured I'd be wrapping up around now, and I'm checking in here instead and we'll reach those subjects later.

It's a madhouse right now.  The entire industry, I mean.  All the more so for a month that's typically a bit of a slowdown.  Wizards of the Coast announced a bunch of Magic products, one of which we don't get to know anything about until players start opening packs at a table.  There was suddenly a new edition and new printing of Wingspan, and none of us have any idea from day to day whether we're going to have too much of that title or zero on the shelves.  Most of the attention in new video games is directed toward 2020 and the launches of the Playstation 5 and the Xbox... uh, Two, while the Nintendo Switch released a quiet version update and a less quiet Lite variant.  We continue to see digital storefronts de-list games that then become obtainable only by the original physical media.  And will there be tariffs?  If so, when?  Who knows?

For DSG's part, we finally finished building my back office and workshop, and we're setting up to have a three-phase revamp of the game room floor.  Getting all the shipping equipment and such out of the main part of the building is also part of our Wizards Premium Store application, a process that's finally almost finished.  The 1st phase continues after the removal of shipping equipment (and my workstation) to the back room, with a reconfiguration of the singles backstage area and my staff workstations there.  That opens up a few hundred square feet of floor and it will be shaped differently, so we get to adjust how the "big tables" for non-TCG games are deployed.  Phase 2 will enclose those table areas for privacy and admission gating.  Phase 3 will mostly be software, and swapping out some fixtures that we've been meaning to phase out.

Many of you have been following my biannual store closure articles here on the blog, where I list all the stores I've been informed about that have hung up their spurs during the six months prior.  The list for January 2020's article about the second half of 2019 is going to be a doozy, and includes multiple local stores, with more that I suspect will announce before much longer.  The closures track with some of the industrywide tectonic shifts that we've been seeing grow for years now, and I think in a couple of months we're going to have clarity on a few things.  On other things?  Foggier than ever, I am sure.

In the video game world, I'm approaching 20 or so Sega Game Gears sitting in back storage because none of them work, because all Game Gears are broken now.  They are all recoverable, however.  They do power up, but they need their capacitors replaced in order to have video and sound.  The Game Gear was an underappreciated system that lately is starting to stoke interest in retro circles, because its catalog was thick with rare Japanese-style RPGs and other genres favored by otaku more than mainstream gamers.  Moreover, it uses a common Genesis v2 AC adapter, so we don't have to chew through untold quantities of AA batteries or chase down a rare power cable, assuming we can get a working system in the first place.  Unfortunately, the necessary capacitor replacement, at least on a unit-by-unit basis, projects to a lot of labor time, and with parts and troubleshooting could add around $60-$70 to the cost sunk into one system, that would then be able to sell for, at most, $80-$100.  Thooooough... now some enterprising folks have been developing drop-in LCD replacement screens and other quality-of-life mods that push the viable resale price of a "maxed out" Game Gear to $250 and up, though with parts and labor sunk in of at least $150.  There has to be a way to assembly-line this and use some economy of scale to bring a bunch of these back to life cost-effectively, and looking around at eBay listings, there are already some guys doing this, so proof-of-concept passes muster.  I just need to do some diligence on that process, and until then, I'll keep buying the broken ones at $2 to $5 each depending on condition and stowing them for later.

Meanwhile we're smack in the middle of the craziest and most insane football season I can ever remember.  Even when we get to Sunday business, which is kind of rote at this point -- lots of buys, a short day, booster drafting, Pokemon league, and catching up on my admin work -- there's the backdrop of all the awesome football going on.  I've never been happier to have NFL Red Zone at the store, for as little as I get to sit and watch it for more than a few minutes at a time.

Gingerbread

The Throne of Eldraine prerelease came and went, and we found ourselves celebrating ~400 players worth of attendance while simultaneously bemoaning being over 100 players short of a sellout.  The early release booster boxes sold well both on pre-orders and during the weekend, which salvaged much of the difference.  A good time was had by many, and that's a win for sure.

My initial impression that this set would be a hit came with some reservations.  I thought with no dual land cycle and no spicy reprints, many players might sit Eldraine out.  Standard players would buy the singles they needed, and 60-card eternal formats would largely ignore the set.  There's something for Commander players in every set these days, because Hasbro likes money, so that was certainly going to be a selling vector.  But sure enough, Eldraine has some innovative new card capabilities and pushed mechanics to play with, and players in general are enjoying the theme.  Perhaps all the more because we already know it lasts only one set and not a full block.  (Maybe we can finally revisit Kamigawa now that we know it isn't going to eat up a year of Standard for us to do so.)

I am quite happy for the return of masterpieces, to the extent they did.  At a nice low hit rate, regular booster packs serve up full-art foil Planeswalkers, gorgeous foil storybook cards, and assorted other goodies.  The special collector boosters were known to be value faucets, but it was nice to know any pack on the shelf could offer a jackpot.  Players notice these things, even if they don't open them very often.  I think this set's overwhelming extension into gimmick cards is a bit much, but I guess they figured they'd go big in order to learn whether they had to go home.  Which is fair.

We sold out of the early booster boxes paired to the collector pack at $139 on the day before the prerelease, and then as I planned all along, I made the booster box price with just the Kenrith buy-a-box foil (along with the rest of the new Standard's booster boxes) $99+tax for the weekend.  Sales activity was heavy.  We didn't quite run out, so a few lucky customers on October 4th will get the bonus card with their box purchase.  I'm not enthusiastic in a general sense about $99 booster boxes when that's not even close to a sustainable markup, but we're in a position where we can do this for a while and maybe exert significant pressure on the local market.  Each of the $99 boxes are available to me in essentially infinite quantities from my combination of distributors, DSG cleared the last of its bank loans back during the summer and thus has pretty good cash flow these days, and I hear all kinds of grapevine chatter about one store or another getting close to a lease exit option and possibly bowing out, leaving players scrambling for a new waterin' hole, and potentially looking our way.  If Eldraine is in short supply on release, I'll have to adjust the box price to market for a bit, and then I can go back to $99 when it's more abundant.

Speaking of other local stores, I didn't expect so many local competitors to be underselling the box+collector-pack-bundle as aggressively as they did.  But whatever, ours all sold, so apparently my guarantee that anyone who bought in on that deal would absolutely, positively, no question about it, get the collector pack, was appealing to consumers.  One other store tried to one-up us by also guaranteeing the pack at a lower price, but then they ran out and in fact their guarantee was not a guarantee.  I heard this from players who had been on the receiving end of the scenario.  It would have been nice for them to call out that store on social media, but nope, that store gambled that they would only grumble verbally and accept being screwed, and that store somehow gambled successfully.  It's disappointing but here we are.

For those stores that didn't guarantee anything, I think they have undervalued certainty.  For the player with a full-time job and perhaps a family, they don't want "bonus treat included only while supplies last," they don't want to line up for four hours to save $25, they don't want maybe kinda coulda woulda hem haw.  They want the thing, no excuses.  Here is money and now you will please provide the thing.  The end.

That's one example of a long play I've been working on, of steering the store's cone of influence toward a narrower range of things, so that we can more often "have everything" and then craft an offering that is increasingly "no excuses."  I think "no excuses" plays stronger than resorting to gimmicks, even if consumers aren't as conscious of it when they choose.  Price will always matter to some extent, but price is either inert or impotent if you don't have the goods, which is still the gold standard.  So I'm most engaged these days in products where DSG is already strong and presents scale beyond what most competitors can approach, or where DSG's range of resources is enough to put us there.  An example of the latter would be the Final Fantasy TCG.  We hosted a huge tournament for Square Enix, and we had the budget to boost our stock of demanded boosters for the event and afterward, and after buying up a few collections and breaking some packs, we have become one of the larger and best-stocked sellers of FFTCG singles on TCGPlayer.

In terms of what to cut in the narrowing effort, nothing is on the chopping block at the moment.  I know I wrote recently that I'm looking kinda sideways at Dungeons & Dragons, the problems of which are bimodal and overlapping: Hasbro refuses to do anything to mitigate Amazon dumping sourcebooks at near or below distributor cost, and there exists a significent cohort of the player population that wouldn't spend a dime in a game store if their lives depended on it, whether from poverty or having bought from Amazon already or whatever reason.  This wouldn't be as bad except that a table full of D&D players takes up a lot of square feet of floor whether it's an engaged group that shops the store, or an unengaged group that doesn't.  One day I'll have upgraded the game room enough to gate it for pay in a "no excuses" fashion, and then we'll let the tale of the tape decide what happens to D&D.  In the meanwhile, the release schedule isn't too taxing for the line, so I'm at liberty to leave things alone for now and see what happens.  But if I had to cut a category today, it would be RPGs.

This is the "between week" so while you're reading this, the DSG staff will be opening Throne of Eldraine boosters (and Brawl decks) for singles and setting up for what we hope will be an enjoyable weekend.  I've got the kids for the next two weeks mostly to myself because Steph is on an adventure to Scotland, so there's a fair to decent chance I will take next week off from writing, or else put up a quick blurb about something.  Meanwhile, enjoy the story and live happily ever after!