I'm opening another location in about a week, west of my current store.
Burying the rest of that lede, I was surprised at how much my last article circulated. It did the highest numbers I've seen in a while. It looks like it got the attention of a fair number of people in the industry, and I got to meet some new friends along the way, which is always something you hope for.
I did see some consistent questions and feedback about my assertions in the last article, and some of them were reasonable queries that I figured I should answer.
The first and easiest response to dispose of is along the lines of, "Hey Bahr, haven't you been among the people clamoring for Wizards of the Coast to reprint everything? And yet in your article you say that the singles market is collapsing because of excessive reprints. What gives?"
I did and still do clamor for Wizards to reprint everything so that players can get the pieces to play the game. The difference is one of degree. I was a bit clumsy/inelegant in stating that Modern Horizons 2 was harmful to card values, because that statement lacks important nuance -- more on that in the next question. By far the larger overwhelm was the flood of Commander deck reprints coming out with virtually every booster product. Each deck, from among two to five per release, contained what added up to hundreds of cards in reprints at a cadence faster than bi-monthly at the very least. Booster set reprints aren't nearly as overwhelming, and if we look at things like the cards that showed up in the Double Masters sets, the Modern Horizons sets, and the Remastered sets, both the volume and frequency of reprints are much more sustainable. So. On balance I'd rather Wizards reprint more cards rather than less, but that dial got turned all the way up to eleven and it is proving too much.
But by far the most frequent article response I saw was players arguing about this:
"Singles like Vendilion Clique and Containment Priest are great examples of once $20-$40 all-stars that are now literal bulk dollar rares."
They don't see the "middle" as being a real thing or as substantial as what I described, on the basis that they believe Clique and Priest were already outmoded and the erosion of their values could be attributed purely to deck inclusion, and since I did not name-drop an exact list of other cards, there must not be any others. I agree that deck tech played a part for Clique at the minimum, and I contend that the reprint volume of Clique also played a meaningful part -- and the reprint volume of the cards that superseded it. And for those who want me to name-drop more cards, I am happy to. Look here.
More cards that used to be evergreen "chonk money," and have been reprinted to a fraction of value:
- Pithing Needle
- Thalia, Guardian of Thraben
- Meddling Mage
- Shardless Agent
- Celestial Colonnade/Creeping Tar Pit
- Goblin Rabblemaster
- Knight of the Reliquary
- Mishra's Bauble (which I'd agree it was silly for this one to become expensive in the first place)
- Scavenging Ooze
- Solemn Simulacrum
- Theros Temples
By and large these cards are still played, at a minimum in Commander and where optimal also in the sixty-card formats. That is also still not a comprehensive list, and I don't think it's necessary for me to deep-dive repeatedly for more examples; if you don't think the "middle" eroded, good for you, go on with your day. For those of us who buy lots of cards all the time and accrue large inventories, broad-based value decay is a real problem. Long-time expert MTG vendor Michael Caffrey from Tales of Adventure put it best when he said "I am not in the business of buying risk -- I'm in the business of managing risk." That sentiment encapsulates perfectly today's analytic outlook on our industry.
You may notice I omitted cards that were only expensive because there were like six copies in existence and once they got reprinted it became reasonable to get them at a power-level-driven value, such as:
- Grim Tutor
- Warrior's Oath
- Imperial Recruiter
- Jade Statue (Remember the outcry when this showed up in 9th Edition? It hasn't shown up since and nobody cares and it's borderline unplayable and it's bulk bin chaff.)
You may notice I also omitted some cards that have been reprinted to a fraction of value, but did so in an anticipatable manner, and should be expected to be reprinted regularly, such as:
- Fetchlands
- Shocklands
- Wasteland and derivatives
- Commander-relevant mana rocks
- Core 1CMC cards such as Brainstorm, Lightning Bolt, Dark Ritual, Swords to Plowshares, etc, at a lower value tier than the other examples.
I mentioned Modern Horizons 2 above and it reprinted the enemy fetchlands, which are all now the cheapest they have ever been since OG Zendikar was in Standard. This is not a bad thing! They are essential cards that will get played in any format they are legal, for as long as people are playing Magic. It is good that MH2 made Scalding Tarn not be a $80 minimum ticket. And for those who want to spice their collections up a bit, there are still original pack foils, BFZ Expeditions, and other super-premium printings now and again. Knowing this, as MH2 propagated, most stores (including mine) made sure we had throughput on cards like the fetchlands. But with a singles stock in seven figures of units, there was and is no analog way we can keep track of everything. We had to turn to algorithmic tools such as TCGplayer MassPrice, which provide a clear benefit to vendors while also unfortunately providing exploit vectors to collectors. The meta-struggle became keeping up with the exploits while letting the algorithm solve all the ordinary and mundane pricing concerns, which it largely does.
Note that I am not complaining or whining about the exploit factor; it simply is the way things are. In business nobody will make special allowances for dealers. It is up to us to adapt and make our adjustments. In the case of DSG, the big adjustment was to sell most of our massive singles inventory quietly in the manner I described in the last article. In the aftermath, as I hoped might happen, we've been able to rebuy up some beneficial tranches of cards, primarily higher-tier format staples, and we have been free largely to ignore everything else.
On a complete aside about that, I do believe that effectively fielding a comprehensive singles inventory (aiming for full coverage) probably requires robotic automation now, such as the Roca Sorter or similar devices. Labor and space are simply too expensive today to have meatbag human beings picking endless white cardboard bricks, searching for cards above the listing threshold. Caffrey, quoted above, was an early proponent of this automation and did some meaningful initial development of the process particulars for it; if you aren't already subscribed to his Patreon, I encourage you to consider joining me and many other satisfied members by doing so.
On a second complete aside. I am going to change platforms for this blog in the months ahead, time and opportunity permitting. I am still assessing which platform makes the most sense, as I hope to monetize the blog in order to make it more feasible to produce crunchier, extremely useful guidepost articles and deep analyses that game store owners and managers can better utilize to make money. For logistical reasons I don't think Patreon fits my content plans quite right, though I may discover otherwise as I learn more. The front-runner at the moment is Medium, but its monetization seems a little bit too byzantine for my autistic do-it-transparently brain to wrap around, so we'll have to see.
Enough with the asides, you might say, and that's fair. I kept you waiting. I will conclude today's Magic: the Gathering market thoughts by saying I am ordering roughly the same quantities for March of the Machines as I did for Phyrexia and Brothers' War, as the sell-through of Standard sets has been generally good since the policy change that opened up prerelease-week sales of all SKUs for WPN member stores. You love to see it. And now...
I have mentioned here on this blog now and again that it would eventually make sense for me to split my business between cards and video games. Hence, "A Cell Divides," the prog-metal musical basis of which I will explain in today's coda.
A funny thing happened on the way to setting up the split, however.
I had from the start expected that the split would be along categorical lines: Cards in one store, Video Games in the other. This seems sensible enough, after all. Do card players not seek out card-focused stores? Do video game collectors not do the same? Every impulse told us that this was the simple and correct answer, from branding and marketing prerogatives to the simple division of relevant stock, rack, fixture, and administration.
Something nagged at the back of our minds that this wasn't quite right. And, ever the analysts, we nourished that doubt to see if it would grow into something more.
A single blog article is too limited in scope to accurately trace the years-spanning evolution of that analysis. It might be something I embark upon as a long-scale project on the monetized future blog, I don't know. Suffice it to say I am skipping some steps here and not showing my work. But out of multiple key ingredients that led us to our ultimate answer, the breakthrough that made it all work was recognizing that our major categories have internal audience cohort divisions, and that those divisions line up across categories. And moreover, that they continue to exist even as we extend to other collectibles categories, and that they continue to line up. I realize I am being a bit abstract here. This epiphany aggressively resists comprehensive explanation, with an almost violent obstinacy. I'm punching it right in the sternum and it just keeps giving me the Ken Masters taunt.
"Fine, Bahr, whatever, just give me the answer." The answer is that our business is dividing along the lines of our customer psychographics' engagement objectives, which flipped around from DSGs point of view become our store's engagement vectors. Yeah, I swear I'm not just making words up at this point. This is a real thing. At least, I am gambling a lot of labor and overhead expense that it is.
Our existing store, Suite 12, will continue as Desert Sky Games. What is Desert Sky Games today? The primary engagement vectors are in-print booster boxes and packs of Magic and Pokemon at highly competitive prices, abetted by a second-to-none rewards points program called DSG Stars that is probably the single best promotion we ever initiated. The secondary engagement vectors are a wide selection of out-of-print booster boxes and higher-end staple singles, plus a selection of higher-end video games encompassing both rare/hard-to-find and common-but-highly-demanded. Did you know at less than $60, a copy of Mario Kart 64 lasts less than an hour on the shelves? The game is almost thirty years old and has more than half a dozen sequels surpassing it and running on more current hardware, and also they sold millions of them. And yet to this day it's one of the highest-demanded titles not just for Nintendo 64 but across all platforms, and it sells quickly despite being at a premium. Mind-blowing. Anyway, in identifying those engagement vectors, we came to realize how the split needed to work by recognizing what was left remaining.
Our new store, Suite 11, right next door, will exist for some amount of time as the DSG Outlet Store. This resembles in many respects our long-time eBay store "DSG Closeout," and in fact it commingles that inventory so anyone who wants to buy our eBay stuff in person can finally do it seamlessly at our Suite 11 location. However, Suite 11/DSGOS is not just discontinued or clearance merch. It is the culmination of an idea I got from happy memories of years ago when I used to be into video game tinkering and modding -- the internal name for the DSGOS project for years was "Tinker With Games" -- and it was reinforced when I learned about places like Seattle's RE-PC and Dallas's legendary Computer Reset, which stood for almost 40 years before closing after the passing of its owner, the venerable Richard Byron. While focused on computer hobbyists, both stores served console gamers as well. There was something here, it finally came into focus.
We realized that not only was there never a RE-PC or Computer Reset in Arizona that served the audience of console game tinkerers and modders, but that audience deeply overlapped the audience of "bargain hunters for video games and gear in general" -- and as discussed in last week's article, there was finally no more muddying of the waters within the bargain-hunting audience of the video game category because ultra-casual players who would have no interest whatsoever in tinkering or the collecting chase have largely moved on to subscriptions like Game Pass, PS Premium, and Switch Online, and no longer need video game retail of any sort. And, synchronizing the meridians, the product mix that this engagement vector demanded happened to be deeply overlapped to the inventory we were having the most difficulty presenting in a cogent manner in the context of pre-split DSG. Put a rare special edition Xbox One next to a PS4 copy of Stardew Valley next to a re-shell for a DS Lite next to a Sega Saturn that powers up but has a dead CD-ROM drive and needs an ODE installed... and what you get is a mishmash of product addressing high demand from four different audiences that have almost no overlapping interest in each other's target items. But it's all the video games category! Now, with a separation that's physical instead of just conceptual, we hope to serve each of those four audiences better.
Suite 11's DSGO, because it was already being used as our shipping office, will also serve as closeout space for discontinued TCG merchandise, so there will be bargains to be hunted for there. We're going to be emphasizing having as much merch as possible, presented at low prices with constant updates reducing pricing as needed. In fact one of the first big projects once we're already open is going to be taking the software inventory one system at a time and seeing how many games need to be tagged way down. A good example that came up during the build was Sea of Thieves for Xbox One/Series. For a long time the game held at the $35-$40 level. It has more recently slid down into $15-$20 range on Pricecharting. But the real value of this game as a functional thing is almost zero because it is free to play on Game Pass and it is targeted at an audience of mainly Game Pass or Xbox Gold users. So in terms of who wants this physical disc copy of the game? It's a small niche of collectors and archivers. In terms of who wants to play Sea of Thieves? Most such gamers can do so "for free." Splitting the difference, we're going to be taking each copy of the game and pricing it at $8-$10, significantly below the Pricecharting value. Collectors will buy them right up eagerly, and players weren't going to come in looking for it anyway. This is just one narrow example of how the customer psychographic objective distinctions work on a real-world piece of inventory in hand.
There's a lot going on in the DSGO that won't make a lot of sense to people at first glance, so we'll need to be on our "A" game in teaching and guiding. I'll have all the normal cables, adapters, and such for less common systems in the DSGO full-time to save room in Suite 12 for higher-demand inventory; it makes no sense to have a rack of Sega Dreamcast cables taking up space that could display another four colors of Dragon Shield. I'll have kiosk, RGB, and refit hardware on hand, as well as an abundance of cheap replacement parts and parts consoles, and mostly you either care about that stuff or you've never heard of it. I'll have movies from our old Suite 7 stock, dirt cheap, for those inclined to go physical rather than stream. I'll have game discs that are too scratched for us to sell, but for which we no longer have a disc resurfacer, also priced dirt cheap for those who can glean some value out of them. I'll have e.g. base consoles for XBox 360 Trinity chipsets for modders, and CECH-A01 PS3 mains that just need the revival process to become glorious backcompat daily drivers. I'll have merchandising material like posters and banners for sale, for those so inclined. We're going to sell off our custom cartridge cases now that Suite 12 no longer deploys stock in that configuration. If all of this sounds a little bit vague, you aren't imagining it. There is not a store offering quite like this in Arizona before now, and there has never been one in most parts of the country. It's a novel experiment to some extent.
I say the DSGO "will exist for some amount of time" because honestly we don't know if this is going to work, or if so, in what manner it's going to work; and we have internal prerogatives that make it possible to try without being locked into a multi-year burden to do so. (We didn't even have to buy a single piece of rack or fixture, since our Suite 7 assets were just sitting in storage.) And if DSGO is a complete flop, we've left open the lines of play where we just recombine the stores and do something different. That's the silver lining of opening the location one door's distance away from our current shingle, and that's the flexibility we get from cheap-as-free rent and low overhead and a stable financial position made possible by our big product wins from recent years, as discussed in recent articles here. We can kind of do what the f*ck we want. This is something we feel like trying.
The DSG Outlet Store should open by the weekend of March 11th, since that starts spring break for most students in our area. DSGO will be open Tuesdays through Saturdays from noon to 5pm. In a pinch we can fetch up stock from there after hours if you're visiting in Suite 12 and you know what you want. Labor remaining a constraint, I'll be running the DSGO by myself some amount of the time. There are no game tables and no public restroom and no buys in Suite 11, so a solo flyer can pretty much cover things.
Stay tuned for future articles where I migrate the blog to a new platform, and I wish all of you a very prosperous spring and a pile of money to be made on upcoming releases like Pokemon Scarlet & Violet and MTG March of the Machines!
Today's article title, theme, and concept, A Cell Divides, have been brought to you by Haken. (Rhymes with "Taken.") This mostly British progressive metal band is at the absolute forefront of the genre right now and is putting out some of the absolute best prog that has ever been. Haken's big breakthrough came with 2013's "The Mountain," and the band avoided any notion of sophomore jinx with the masterpiece "Affinity" in 2016. Both are highly recommended. The song A Cell Divides is from their 2018 album "Vector," which is doubly appropriate with how much I talked about vectors in this article. There also exist remastered releases of Haken's formative work from before The Mountain, and two newer albums have also released since, both awesome: early 2020's prophetic "Virus" and 2023's "Fauna." More top song picks include Earthrise, Carousel, 1985, The Alphabet of Me, Crystallised, The Architect, and Cockroach King.
Be assured that there is plenty for Haken to teach every entrepreneur reading this, as exemplified in Earthrise: "Evolve and we'll ensure our survival." With that, until next time, resolve to carry on, everybody!
