Tuesday, July 28, 2015

An Open Letter to Strip-Mall Solicitors

Dear Solicitor,

Yes, you.  The working guy or girl with the clipboard who just walked into my business to attempt to sell me something.

You need to stop.

Seriously, there is so much wrong with what you are doing, that you need to pass the word up the chain to your source company that the very method by which you work is unacceptable.  You need to leave, possibly, and get another job.  There's no such thing as a "lousy job," but there are jobs where you are set up to fail, and yours is one of them.

Someone, some manager or suit or whatever in an office, decided he or she would send out legions of solicitors to strip malls or office plazas around the area to sign people up for gym membership, or push a credit card interchange plan, or sell cologne or flowers, or what have you.  This was likely done without thinking it through, other than to say, "I have a sales force and they need to go make sales.  Get them out there and have them make sales."

And that's why you are in my store today.

I am not going to buy anything from you or your kind.  Not ever.  If I need the exact thing you are pushing, I will buy it from another vendor.


Well, first of all, this is the Year Of Our Lord Two Thousand Fifteen.  When we want to buy things, we use the Googlenets.  And we determine whether our objective goods can be procured locally, and if so, from where; and if they aren't, we check to see whether it's on Amazon Prime.  At no point does our rationale become, "I sure hope a traveling peddler walks in and offers to sell us this!"  Door-to-door sales are an artifact of history.  They're done.  Over with.

But let's say for a moment that we did not have all the knowledge of human history contained on devices in our pockets that we use to look at photos of funny cats, and let's say that we did embrace the spontaneity of being hawked at by the shopkeeper of an ever-migrating bazaar.  What you are doing is still abhorrent to the owner of the small business upon whose premises you have just trespassed.

You see, I pay the rent on this store, so I get to say what sales happen here.  And the only sales that are going to take place on these premises, are the sales that feed my business.  Customers buying my things, or customers selling me their things to turn into inventory.

If you want to sell in my store, pay my rent.  That'll be five grand a month.  First and last will be accepted up front.  You may set up a table and push your gym membership to whomever visits.

It astounds me that your employer can be so callous and tone-deaf to basic business ethics that he or she actually thinks it's okay to freeload on the existence of my store.  But it doesn't mean I have to accept it or condone it.  Ustedes no tienen mi permiso.  Begone.

If you're selling perfume and such, it's even worse.  This is my store.  Not your store.  You want to sell goods, go open your own store.  You don't get to sell in mine.  You can't even pay the rent; I have the exclusive on "being a store" in this building.  I'm not offering subleases.

If you are pushing credit card interchange, I have even less benefit of the doubt for you.  At least the gym membership guy is pushing a service that might be of benefit to human beings who wish to improve their physical fitness.  At least the cologne and flowers guy is pushing a physical good that you can buy and use to produce pleasant aromas, seemingly on command.  Their offerings, unwelcome as they are in my building, actually possess utility as advertised.  But what you are offering has no value, and is something nobody needs and wants.  As in, really nobody.

See, the credit card interchange thing is a sucker play to prey on the uninformed and gullible.  None of the interchange plans are actually providing the service.  They are resellers, and they merely take a "rip," or commission, percentage of swipes from accounts they sign up.  The interchange is all done through Authorize.net or one of the actual transaction conduits, and the banking is handled by the customer's credit card issuer and the merchant's bank.

I am a reseller of entertainment goods, so I don't have a problem with someone being a reseller as such.  The problem is that the value add is nothing, because the banks themselves offer interchange in full.  Indeed, with no middleman, the banks can undercut all rates being offered by the plan resellers.  And every merchant already has a bank.  Often several.

So no thank you, we are all taken care of.  Yes, we are aware of chip-and-PIN.  Yes, we will have it when the time comes.  No, the rates we are getting are better than whatever you are offering.  No, you can't see a rate sheet.  Let me see your rate sheet.  Oh, I can't?  The sleaze goes beyond your offering and infects your methods as well.  Please depart.  Door's over there.

If you're here for a charity, I do respect that you're promoting a cause, but honestly, I'm trying to work here.  You need to go fundraise in the community, not on the private property of a business that's doing its damnedest to make sure it never misses payroll.  We do make charitable donations every single year, and not once have we ever thought, "You know who really deserves our consideration?  The charity whose rep chewed our ears for 20 minutes while we were trying to get that order put away before the evening's customer rush."

All of the foregoing would be in my open letter regardless of the industry I happened to be in -- whether I was selling electronics, greeting cards, hardware, antiques, or enchiladas.

But as it happens, I sell comics and games.  I am in the hobby entertainment industry.

And that makes your visit all the more misguided.

Because what on earth gives you the mistaken idea that a business like mine has any money?

Michael Bahr, Administrator

Tuesday, July 21, 2015

Magic Origins Release Post-Mortem

I've written articles like this for Fate Reforged, Dragons of Tarkir, and Modern Masters 2015.  They are some of the most heavily read and linked articles on this blog, so it sounds like there is interest in this.  Works for me!  Here, then, is the DSGCW's experience with the release of the "final Core Set" of Magic: the Gathering: Magic Origins!

First of all, a quick bulleted list of what Magic Origins gave us:

  • Flipwalkers!  There are always planeswalkers in the Core Set and so far always five of them.  This time, they are five legendary creatures that can be transformed into planeswalkers, reflecting the "origin stories" of five of MTG's more popular characters: Gideon Jura (Kytheon Iora), Jace Beleren, Liliana Vess, Chandra Nalaar, and Nissa Revane.  The stories of how these characters turned from mere mortals to powerful planeswalkers provides the entire thematic basis for Magic Origins.  The transformation mechanic on those five cards is the central gimmick of the set.  The Flipwalkers get further credit for being playable as Commanders in both the titular format and in the new offshoot Tiny Leaders.
  • Some standard "push" mythics that should see meaningful action, provided a deck arises by the weekend of August 8th, when the pros tell the hopefuls what cards to play.
  • A few cards that are good enough to make the list of 99 in well-developed Commander decks.
  • A handful of meaningful reprints, primarily Goblin Piledriver from way back in Onslaught, Sigil of the Empty Throne from Shards of Alara, Sylvan Messenger from Apocalypse and every Elf tribal Commander deck anyone ever built, and a respectable encore of the Apocalypse painlands we saw in last year's Magic 2015 Core Set.
  • Once again, a good limited format.  And,
  • Ten planes' worth of references, including two "new" ones the main game had not yet explored.  The events of Magic Origins take place in Theros, Bant Alara, Vryn, Ravnica, Dominaria, Innistrad, Kaladesh, Regatha, Zendikar, and Lorwyn.

So, is Magic Origins good, in terms of gameplay and design?  Yes and no.  Wizards of the Coast already described on the mothership how the set had to be redesigned extensively on a short time-frame.  I believe the set may not age particularly well because it's a bit shallow, perhaps because they had so little time left after pulling up the floorboards.  There is the planeswalker origin story quintet, and that's all this set is.  The ten planes add a bit of beef, and the production value is very high, but players will explore this one out in short order.  If this expansion is a success at retail, it will be because the execution on the marketing side excelled.  We got:
  • A San Diego Comic Con exclusive "black" Planeswalker box set, featuring double-sided black-and-foil Flipwalker cards that have to be seen to be believed.
  • Five different cover arts for the Fat Packs, one for each planeswalker, adding differentiation for the first time to the Fat Pack packaging.
  • A fantastic Clash Pack with excellent contents at a solid value level.
  • Great prerelease promotional foils.
  • Near-perfect fulfillment at retail.  And,
  • A new Deck Builder's Toolkit to pair with new intro decks, new demo decks, and a special two-demo-deck packet designed to be given to new players.  This entire facet of Magic Origins was assembled and delivered better than anything that has come in previous Core Sets in terms of providing a jumping-on point for prospective new players.

Conversely, we did not get:

  • A particularly "sexy" land reprint or new print.  Lands are fundamental to what Magic is, and the quality of lands tends to sell the set -- just look at Khans of Tarkir if you don't believe me.  The best lands in Magic Origins have been in Standard for a year already.
  • Sufficient critical mass of Standard-impacting cards from the get-go to prompt competitive players to pre-order boxes en masse.  This item might be a copy-and-paste from my Dragons of Tarkir review.  And,
  • Cards with significant implications in Modern and Legacy, other than Goblin Piledriver.

So, we know this set was meant to bridge us over into a new Standard consisting of triads of two-set blocks.  It's a one-off in many respects, and doesn't quite fit into the grand scheme except as a sorbet, to cleanse the palate.  The real rodeo comes on October 2nd when Battle for Zendikar brings us back to a plane that players have been salivating to rediscover.  The set must, of course, reprint the five enemy fetchlands that first appeared in 2009's Zendikar expansion: Arid Mesa, Marsh Flats, Misty Rainforest, Scalding Tarn, and Verdant Catacombs.  We can surmise with some confidence that WOTC will make these reprints -- they put the shocklands into Return to Ravnica on purpose, after all, and the Onslaught allied fetchlands were the cleanup hitters in last autumn's Khans of Tarkir.  The baffling lack of Damnation in last summer's From the Vaults: Board Wipes notwithstanding, I cannot imagine that WOTC allows this grounder to roll by them as Bill Buckner once did.

Thus, WOTC knew they had a blowout autumn expansion on the way that would make a big impact on tournaments and the metagame.  Magic Origins only had to get us there without completely crashing the barge, and this was the perfect window for them to do something overwhelmingly "top-down" and all about flavor.  That is exactly what they did.  The set won't have serious implications on gameplay, and will mainly exist as a fun respite in the ever-grinding history of the product.

The negative implication of the above, of course, is that without a lot of urgency to push competitive players and hopefuls to buy in, pre-order numbers at stores will come in shallow, leading to something of a muted launch at retail.  Given the scale Magic enjoys in this industry, I'm not sure their "worst" launch is actually all that bad in absolute terms.  A typical product release of most other games is probably a rounding error against a "failure" of a Magic set.

And still it might not matter: Dragons of Tarkir had some of this same problem, as I wrote, and yet it led to a glorious and fulfilling gradual burn of strong product sales over the course of months.  I would take that any time over, for example, the initial blast of the Magic 2015 Core Set that led into a very slow period once the initial enthusiasm waned.  This may be exactly where WOTC intended to go all along.  Cater to the casual gamer primarily, to the competitive grinder secondarily, and watch the product flow normalize and behave, well, more like retail.  And again, it's a Standard-legal set, and competitive players aren't going to be able to just sit out.  They will need some cards from it.

The prerelease for Magic Origins probably could have broken even our record from Dragons of Tarkir, except we were only allocated 340 player packs (260 + 80 growth), rather than the 360 we got for the previous event.  This was a result of the Origins number triggering off our Magic 2015 attendance -- the WPN allocation email was in error stating it was based on Dragons, I checked with my rep -- and considering our M15 final was something like 260 players, that number makes sense.

We ended up seating 334 of 340, a slightly better mark than the 352/360 from Dragons by a tiny fraction.  Still an effective sellout.  I really hope to get allocated strongly for Battle for Zendikar, because I still had to cancel our Sunday evening event due to running out of product.  I had one additional flight scheduled originally that was meant to be played "competitively" with a top 8 draft and so forth, but WOTC informed me that it was not permitted.  I was embarrassed about that because usually I ask before trying things like that, and it goes to show that when you're a store that plays by the book, you get a friendly warning and you get to avoid violations before they happen.  In any case, I won't even consider stretching the bounds again in terms of event formatting for future prereleases.  DSG may do some creative things external to the game to drum up interest and get people immersed in the event, but none of that will carry over to the card tables unless I am given explicit instructions that I can do something.  As long as everyone has to play by the same rules, I'm on board.

We kept the reduced price of the prerelease at $24.99 plus tax, whether paid in money or store credit.  Prize pools consisted only of the two boosters per player provided by Wizards of the Coast.  Online preregistration worked perfectly once again.  And I continue to get a strong signal from players that, regardless of what else they say, their behavior indicates that price is the primary concern for them in making a buying or attendance decision.  This is not a good or bad thing but simply an observation of customer behavior.  It is not up to the customer to behave as the retailer might like or prefer; it's up to the retailer to adapt to how the customer behaves in reality.  That topic is an ongoing study for our ownership group this summer.  Of course all retailers would like all customers to spend wildly and indiscriminately like drunken sailors.  If wishes were fishes, we'd all cast nets.

This time around our singles strategy changed.  I opened three cases, then set our buylist to be an overwhelming percentage of the TCGPlayer Mid price (65%-75%) on the hottest singles, on the assumption that players would take their chances selling back right now while the environment is still in flux, and we would be able to keep stock.  For the most part this proved out.  Aside from some very strange chase uncommon activity (Shaman of the Pack and Sphinx's Tutelage) stock levels remained strong with few, and brief, outages.  And unlike the ~12 cases of Magic 2015 we opened, this entire routine cost me thousands of dollars less in the cost of meaningful cards that actually sell, rather than loading me deep with bulk.  There was some mythic variance again, but it was within norms.  Unfortunately, only a handful of good foils showed up.  They didn't last long.

We sell boosters at MSRP and boxes at 20% off MSRP, making off-the-shelf booster box sales about $114.88, or ~$123.90 after tax.  At this point, both boxes and packs are moving with excellent velocity and I am disinclined to tinker with those numbers in any way.

So that's it!  I am happy with Magic Origins generally, though somewhat less so than I was for Dragons of Tarkir.  I don't see any serious need to change our workflows.  We reduced pre-orders slightly on a hedge and it paid off -- fulfillment was available immediately for delivery the week after release both from WOTC Direct and our distributors.  Honestly, that kind of consistency is such an outstanding thing for our retail finances that it makes me comfortable continuing to invest our resources, energy, and attention into the game in a big way, reducing what I assume would have been a greater impact from the seemingly endless parade of stores opening or re-opening intending to poach competitive players by paying them to play Magic.  Instead, we just see the tide from that blue ocean of players washing in.  And every player remembers their First Store... and if they're happy there, they never truly leave.

See you next week either for some tradecraft or more pithy commentary on the biz!

Tuesday, July 14, 2015

Repost: Home Runs to Gem Attacks

I am at work on a bunch of stuff this week, including an article about store naming and branding and of course the postmortem for the Magic Origins prerelease (happened) and release (happens later this week).

So to tide you readers over, I'm going to take this opportunity to repost (with annotated comments) the last of the articles I did for Game Head back in 2012.  It's a little off the beaten path.  If you don't care about coin-op, skip this article entirely and I'll see you next week!

Home Runs to Gem Attacks: Converting an Arcade Game
by Michael Bahr
Originally published on Game Head, August 29, 2012.
[July 2015 commentary in brackets and italics.]

Greetings! I am the managing partner at Desert Sky Games in Gilbert, Arizona. My law degree and day job in government health care make my primary role with DSG as book keeper, but the role I enjoy most is curating DSG’s Vintage Arcade!

Back in the 1990s, I owned a “vending route” that at one point consisted of about thirty arcade games that I located in Phoenix-area game stores, laundromats, and other small businesses. The money was good enough for an unmarried, childless guy in his twenties, and the work was mostly great fun. By 2003, the arcade fighting-game furor had died down and the vintage retro fad was still in its infancy, so I sold out and headed to ASU Law. Still, I always wished and hoped to return to the arcade game craft. It requires both physical and mental aptitude. It lets you work with tools. It allows you to create and destroy. It allows you to be carpenter, electrician, luthier, and engineer. It gets unwieldy handling huge wooden cabinets weighing hundreds of pounds, and deadly electrical hazards lurk in every glitchy monitor tube, but it is a rare joy to take a non-functional cabinet and see it light up for the first time after restoring it – and that makes it worth it many times over.

Today, I will step you through a project I recently completed for the Vintage Arcade and that I get to do fairly often: converting an unwanted arcade game into a popular one.  [In the years since writing this, I have gained a greater appreciation for restoring vintage gear to its original state and preserving its value, but in the case of this piece, it was already pretty far gone and it would have cost more to restore than just finding an Ikari Warriors that was in better condition.]

DSG General Manager Mike Girard and I found a Relief Pitcher on eBay for a reasonable price. Relief Pitcher was an early-1990s baseball game that would not be a good fit for the Vintage Arcade. However, I noticed that this particular RP was installed in a late-1980s Dynamo cabinet, which in the arcade world is a very good thing. Dynamo cabinets tend to last a long time and have excellent accessibility, solid durability, and well-designed wiring and mounting features. We made the buy and picked up the game as-is, which is normal in the arcade hobby. I cleaned out about a dozen dead spiders and assorted crud from inside the enclosure, and then the true work began. Alas, I did not take a photo of the game while it was still working as a RP, but here it was after my initial disassembly of the marquee and control panel:
The first thing you’ll see is that the drilling of the cabinet is not similar to the “Street Fighter” layout of six buttons and a joystick per side. That disqualifies this cabinet from being used as a MAME multicade or home-use game for the most part. Instead, I needed to install some software that would be optimal with two joysticks and two buttons per side, with the option to make both sides play ambidextrously (identical buttons on either side of the joystick). A few games fit the bill, mostly puzzle games such as Tetris and Bust-A-Move. I happened to have a PCB (what you might think of as a “motherboard” or “game board”) for Capcom’s Super Puzzle Fighter II Turbo. I hoped that Relief Pitcher would convert directly to Puzzle Fighter with a minimum of fuss.

The RP control panel overlay, or CPO, was adhered to the metal and was a lost cause, as was the side art. However, most of the Relief Pitcher components were perfectly salvageable. DSG will likely sell the RP conversion kit on eBay for a modest price, as the game would have play value in somebody’s mancave/rumpus room or at a bar pub that it would never have in a more traditional arcade like ours. Here were the RP parts after disassembly:
The marquee, monitor bezel, game PCB, interesting three-sided buttons, joysticks, start button, and mounting hardware all survived in good shape. The manual was even sitting right there inside the cabinet!

Now it was time to get to work. With any arcade game to convert, the first and most critical element is the electrical system. If the game has a poor electrical system, it doesn’t matter what you do with it; the game will be constant trouble and you may even blow out PCBs or other critical components. Or, you know, kill yourself with an electric shock. Since the game powered up, I was not too surprised that the power supply was in good shape:
There are three main electrical components: the switching power supply (the top item in the photo), the isolation transformer (the block under it), and the filter/grounding wiring (next photo). The switching power supply is common in arcade games. It accepts A/C from the wall and passes it through to the monitor and marquee lighting, and then provides additional outputs of +5v for the game CPU, -5v for coin door mechanics and lighting, +12v usually for sound, and sometimes other voltages, such as +3.3v for newer games based on console architecture like the Sega NAOMI system (Marvel vs Capcom 2, Virtua Tennis). In most cases the relevant voltages are passed together to a single JAMMA (Japanese standard) wiring harness to the PCB. The isolation transformer helps prevent power irregularity from the A/C line from blowing up your arcade game. Here is the filter/grounding wiring, which looked to be in decent shape as well with nice, tight connections:
The green wire is ground and leads to the control panel. [From the power block, I should have mentioned.  The entirety of an arcade cabinet should be electrically secured to ground for maximum safety.] If you don’t have a good connection there, you could shock and kill a customer playing the game. Admittedly there are some customers you wouldn’t mind killing. But we try to avoid it in most cases so as not to be convicted of negligent homicide. You know how it is.

In modern PC AT and ATX power supplies, the isolation transformer and the filter/grounding wiring are contained within the metal casing along with the switching power supply in a nice, single enclosure. PC AT power supplies tend to run slightly hot on the +5v lead, but those that have +5v adjustment knobs are usually safe to run arcade games and save you some electrical hassle. Right now I have a PC AT power supply running DSG’s Street Fighter II Turbo: Hyper Fighting and it works perfectly. But for most games, the separate switching power supply, isolation transformer, and filter/grounding wiring are what you will see. If they are all in good shape and all the connections look sound, you can power up the game. If it boots, your electrical system is probably fine.

So the electrical system worked. As well, the monitor worked, which is a topic for an article all its own. It was time to strip this puppy the rest of the way down so I could build it back up again into a Puzzle Fighter. First, I needed to get all the baseball materials off the sides and control panel. This was significant work, actually, requiring some scraping tools and elbow grease. Look what I discovered:
Hey, that looks familiar! The gun, the grenade, the 60-degree joystick labeling – I recognized this! A little later the control panel gave up even more information:
It appears this game began its life as an SNK Ikari Warriors cabinet! I felt really annoyed at that point toward the person who converted it into a Relief Pitcher, because Ikari Warriors is a vintage classic and I would gladly have left it intact if I had bought it as such. But these things happen. I even saw a Pac-Man at Encanto Park in Phoenix that had been converted into a Street Fighter II! Don’t get me wrong, I love Street Fighter, but you can convert any JAMMA cabinet into that…it doesn’t make a lot of sense to ruin a vintage classic that’s custom-wired in the first place. But I digress. In any event, Ikari Warriors was long dead, I wasn’t going to be able to find the parts to restore it readily, so the original plan of making a Puzzle Fighter moved forward.

First up, I needed to install the Puzzle Fighter PCB and make sure it all powered up properly. Puzzle Fighter was released on the Capcom CPS2 system, which is an almost console-like arcade hardware standard that allowed operators to buy a single “A” board with CPU and connections, and swap out different “B” boards to change the game. Many games were based on the Street Fighter control panel scheme, so an arcade operator who owned a Super Street Fighter II could upgrade it to a Darkstalkers, then to an X-Men: Children of the Atom, then to a Marvel Super Heroes, then to a Vampire Savior, then to a Street Fighter Alpha 2, and so on, all the way up to the first Marvel vs Capcom game, by changing nothing but the CPS2 “B” board and marquee and leaving the cabinet largely intact. It was an ingenious way to offer arcade hardware because it kept games new and costs down, and featured somewhat beefier hardware specs than SNK’s similar Neo Geo Multi Video System that offered similar flexibility. Other versatile arcade hardware platforms followed, a stark departure from the early 1980s when every game had custom wiring and custom hardware from top to bottom, and conversion kits had to be designed specifically game-by-game, such as upgrading Atari Star Wars to The Empire Strikes Back. Here is the Puzzle Fighter PCB in place inside the cabinet:
The black half of the board is the “A” PCB with CPU, while the green half is the “B” board containing the game ROMs. All that wiring you see at the top is the JAMMA standard harness that connects the PCB to the rest of the cabinet. It contains the power leads from the power supply, a group of wires with RGB, sync, and ground for video output to the monitor, assorted contact switch outputs to the coin door and lockout coil and such so that the cabinet knows to give you a credit when you insert a quarter, and then contact switch outputs to the control panel. These are the simplest of all to understand. Every button, and the joystick directions act identically to buttons in this case, is connected to its own contact (signal) wire from the JAMMA harness, and then a common ground wire runs in a series through all buttons and switches. When the button is pressed, its signal wire touches ground, and the game PCB reads it as a button input. It is no accident that you see umpteen vendors offering custom-made MAME controllers and the like online and on eBay – they are very easy to assemble.

In fact, the control panel was the next thing to wire up. I used a black vinyl control panel overlay because I did not have any Capcom “metallic” CPOs on hand, and for Puzzle Fighter in particular it’s not as critical to the aesthetic as it would be for, say, Marvel vs Capcom. I laid out the controls in the ambidextrous format using the pre-drilled holes, and here is how it looked with nice new buttons and joysticks:
At this stage, I had to test everything to see if I had a mechanically functional Puzzle Fighter machine. All the remaining work would be cosmetic if that was the case. Fortunately, the PCB has a test switch on it that puts the game into service mode, and allows every input to be tested one by one for signal, as well as the sound, the monitor color and position, and the coin door. Once I was satisfied that every connection was working properly, I went ahead and attached the marquee inlay to the plexiglass panel at the top, switched on the marquee light, and fired up the machine in normal mode:
Great success! The black CPO sets off the white buttons well – I liked the clean and uncluttered look of it. The monitor, a CRT, was serviceable and the colors good – a fairly critical thing for a game that depends on color for gameplay! Even still, this game definitely is a candidate for an upgrade to LCD at some point in the future, because CRTs do wear out and you can get 19” 4:3 LCD panels that are electronically compatible with arcade PCB wiring and mounting.

All that remained was to install a monitor bezel and some new coin door locks. It probably goes without saying, but if you acquire an arcade game and intend to operate it in public, you should seriously consider discarding any old locks that might be present on the cabinet and installing your own. There are perfectly good shelf locks available at Lowe’s or Home Depot and you can use the keycodes to get them all keyed the same if you so desire – back in the day, an arcade tech was not usually given coin box access, but these days the tech usually does all arcade game maintenance. For home use, just remove all the locks – you won’t need them.

Here is the Super Puzzle Fighter II Turbo as it appears today at Desert Sky Games! It is available for public use for twenty-five cents per play, and is available to own for $699 plus sales tax, with delivery available within the Phoenix metro area.  [Epilogue: We sold it in 2013.]

I hope you enjoyed this look at converting an arcade game! Feedback is welcomed on what kind of other arcade topics you would like me to cover.

Original link:

That's it for now, thanks for allowing me this indulgence.  See you all next week!

Tuesday, July 7, 2015

Thoughts, Part 2

As with my previous article by this title, this is not a multi-part essay but instead a collection of my recent observations and happenings at the DSGCW.

June 2015 was, overall, our best month in the store's history.  This is despite a couple of so-so weeks toward the middle and end of the month.  We didn't hit our very highest gross, or our very highest net, or our very lowest expenses; in fact, overhead went up since May, mostly due to scale.  What we did see what the strongest combined finish so far.  Most of our high-gross months have been Magic release months, meaning our net was constrained by so much booster box pre-order discounting. Most of our high-net months (as a percentage) have been otherwise slow months in which we bought a windfall collection and quick-flipped it.  This time, we had a top-5 gross coupled to a top-5 net month.  Much of the net was inventory growth and not cash profit, but this tells us that our workflows are sound.

Year 2015 Quarter 2 was the best quarter in the store's history without qualification -- highest gross, highest net, lowest overhead as a percentage of gross (though higher in absolute dollars than in the early days, of course).  This despite April posting artificially bad COGS, because the sales of Dragons of Tarkir came in March, but the net terms came due in April.  In terms of business organization, Patrick and I are starting to flex our muscles in our better allocated roles.  He manages the staff and does a significant amount of hand-selling and public interaction.  I manage the business operations and for the time being also serve as our online fulfillment specialist.  As our various tasks become more systematic, we're able to do more, faster, and with less waste.  And the potential is still vastly untapped; we both have miles of ceiling room for improvement.

The Independence Day weekend behaved almost precisely as Patrick and I predicted: Everyone left town by Saturday, so we needed to move in hard with promotions starting on Wednesday the 1st.  Overall it worked: we had three monster days in a row, followed by a very, very slow Saturday and a middling Sunday.  The week's goals got there, where our sales would most assuredly have missed their targets if we had not had our foot on the gas mid-week.  Holidays are tricky things for stores in our industry.  The best holidays are simple days off from work or school that don't come coupled to ideal vacation scenarios.  On those days, we see a lot of shopper arrivals.  Columbus Day is a perfect example.  Nobody is going to travel in early October to do anything.  But if you don't have something specific lined up and a plan in place for Memorial Day weekend, you might as well stay home and grill hot dogs because you sure aren't going to have a busy sales day at the shop.

Games Workshop pulled a semi-reboot of Warhammer Fantasy, with new rules just released called the Age of Sigmar and a new starter box set due out next week.  On the whole, the content stands up. The new rules are free (they're downloads from the mothership or you can get them in White Dwarf magazine this week, along with an exclusive figure, if your store still has any left) and they scale from one model up to however large your armies happen to be.  There is ample opportunity for new players to jump on, while preserving a chance for the hardcore to engage in epic confrontations.  In fact, if Games Workshop could be persuaded to give retailers more than five hours' notice about new releases, by golly, they just might turn around and see some sustained resurgence.

The gross manipulation happening right now in the Magic singles market is beyond even levels I expected to see.  Every week, a new Modern card or cards are being bought out from the online aggregators, eBay, and Amazon, spiking the card's value and setting off a chain reaction of mostly pro players selling into the spike and live-from-deck-to-deck hopefuls stuck buying at the new higher prices.  I keep telling the hopefuls to stop pawning their cards over and over and just keep them, and they'll find it much easier to build the Deck of the Week if they plan to be competitive.  But they're not interested.  And as a result, the pros and speculators are making a killing.

The Magic Origins prerelease is next week, and the release is the week after that.  So far we have the lowest pre-order totals for both that we've had since the store opened, despite there being no price increases or anything like that.  I don't fully buy into the notion that Magic is in a bubble, because it's so hot these days overall that even a sharp downturn will take years to prove out.  Origins appears fairly decent, more promising than Dragons of Tarkir did, so Standard (and even Modern) players won't be able to sit out.  And this fall we're going to see bananas business from Battle for Zendikar in all likelihood.  But even still -- if sales come in shallow for Origins generally, that anguished gasp you're going to hear will be the sound of hundreds of Magic dens/clubhouses finding their cash flow pinched off like someone stepped on the garden hose.  They already had to dump the gift of Modern Masters 2015 at less than retail to make their bills a month ago.  I have no cause to panic -- through diversifying our product lines and audience, we weaned off the store's addiction to Magic FutureBucks over the course of the year so far -- but I'll be quite disappointed if Magic Origins ends up being a woofer.  I was hoping we could use surplus Origins revenue to springboard into our migration from Light Speed Retail to ComicSuite RMS.

I've been watching a lot of Pawn Stars lately, now that it's on Netflix Instant.  I know the bread-and-butter day-to-day "boring" transactions don't make the show itinerary, and I know the interactions they do show are "managed" -- the quasi-scripted norm for "reality TV" in which the participants aren't necessarily reading lines but are absolutely staging the scene -- but I am constantly impressed by the Harrisons' approach to the actual verbal bargaining.  There are good parallels to what we do at DSG when making collection buys.  Your typical Magic grinder who wants to buylist a couple of fetchlands doesn't really need much staff interaction to transact business, but it's a different story when a more substantial collection of anything walks in the door -- Magic, comics, Pokemon, whatever.  And it will be more so again when we go back to dealing in video games.  There's a qualification stage that an untrained buyer skips, and in doing so, the buyer loses an opportunity to lay the groundwork for a good outcome.  Notice I said "outcome," not necessarily "transaction."  In many cases there isn't going to be a sale, because either the merchandise is just in too poor condition or the seller has an unrealistic expectation of its resale value.  But with good qualification, establishing that rapport and leaning on some key phrasing, a buyer can be absolutely honest and transparent about what the store is willing to do and why, and put the seller into a comfortable place to take a realistic offer and feel good about doing it.  And if it's one of those times when there's no sale to be had, you can send the visitor away not feeling like they were shamed or belittled, possibly generating a more beneficial future arrival either from that individual or by word-of-mouth.

Well!  That's about all I have for today.  Two weeks from now I'll write a post-mortem for Magic Origins, so next week is another wild card.  I'm sure something will come up that lends to analysis.  Hope you're having a great summer.