I'm dismayed at the continued market devaluation of product and the direction it has forced me to move to keep my business solvent, as I have written at length here on this blog before. In keeping with my studies of Objectivist principles and concepts, I have stopped merely hoping for the trend to reverse and/or following social pathways to bolster that value, and instead accepted the prevailing wind and done my best to sail with it.
In essence either a manufacturer establishes vertical brand reinforcement or they don't. Because so few do, my business has become more and more of a pawnshop now. I don't think a pawnshop is an evil thing, but it's not the business I sought to get into, as I wrote here earlier this year. It limits a lot of what I can do logistically and impedes my ability to surprise and delight my customers with cutting-edge software and infrastructure as the store was originally envisioned by myself and Girard back in 2011-2012. He and I had planned to build the Apple Store of tabletop and it's just not remotely feasible with the economics of the game trade today.
Our software situation is so frustrating that Girard threw in the towel last month and closed his store. I respect the sentiment, though I am not in a position to need to close at this point.
The ambitious expansion/merger announced here at the end of November ran into some snags, such as one of the inbound stores, Critical Threat Comics in Tempe, unexpectedly closing forever. Thus, the business plan is in flux and we're still working to nail down the particulars and see if we are even well-situated to proceed at all, and if so, to what extent. This is among the issues I will likely address in the next blog post. I accept that doing what is right for the business trumps emotional or personal considerations, such as what I wanted to do. Fortunately, part of the expansion plan coincides with what I was needing to do for my lease situation in Gilbert anyway.
I don't mind having to come forward and announce that the whole deal isn't going to come to pass as planned; not all business deals work out, that's life. However in the course of making this move, I got to see a lot of hate bubble to the surface that had not been as evident before. That's lousy. That's part of why the tabletop community in Arizona, from Magic to other subcommunities, is as unhealthy as it is. I've done what I can to set the right examples, deal fairly with people at arm's length, and in general to say what I'm doing and do what I've said. Not everybody wants to live that way.
Dovetailing onto #2. Not everyone has to be a dealer. The positive side of Amazon and eBay and Craigslist is that it has made it possible for goods and services to circulate more efficiently than ever before. Remember when you had to take out a classified ad in the newspaper? (Millennials: you'll want to look those words up on mobile Wikipedia.) But the negative side is that everyone wants to be a reseller now. Only a fraction of the community actually buys things to consume, use, and enjoy. Everyone else has resale or speculation on their minds. These bubbles have risen and popped before but nobody cares, they figure it won't happen to them, and meanwhile they drip poison into the well for everyone else.
We have become a world of things, not people and experiences and happiness. I can't point the finger because I enjoy things sometimes too. But if there's one positive I can take out of having to deal with sharps wasting my time every day with their competing business interests, it's that I will achieve the maximum Expected Value out of all my personal purchases and possessions if I buy what I actually want for myself, and keep it. As Tyler Durden taught, we work hundreds of hours to buy things we don't need, and our things end up owning us. I think I enjoy my games a lot more when I buy them expecting my bookshelf to be the end of the ownership chain. Consistently my happiest customers are those who sell to me infrequently. Not necessarily "never," because everyone sometimes has stuff to trade in. But where it's a rare occasion. Those people are doing it right.
Dovetailing onto #3. Not everyone has to open a store! We had 12 store closures in metro Phoenix in 2016, and yet we are somehow ahead by a net plus two stores since then. I'm updating the Mega Article this week to take that into account (and to include some deep background that some helpful folks sent me regarding the stores currently on the article). Having said that, it's a slowdown compared to the booming explosion of stores in 2015.
I see a new store in the area, especially one run by a neophyte, and I have no fear for my own viability, because I know they will go through the same trial-and-error learning process I did in years past, and they don't really affect my ability to reach customers anyway. But their arrival absorbs up a lot of low-hanging fruit that we incumbents have worked hard to harvest. If the game trade were an MMORPG, they'd be kill stealing.
So if you're a newcomer wondering why you sometimes get a frosty vibe from the established stores, that's why. It's not that we aren't willing to have you in the community and be good neighbors, and it's not that we think you're actually going to put us under (as I've written in the past, it is very, very difficult to do that, unless the existing store is already in rough shape). It's that you crashed the wedding party without an invitation and you went right out to the dance floor and started hitting on our daughters.
Loot crates and their imitators. Come on, people. They're leftovers and closeout product sweetened up with a designed exclusive here or there. You're being suckered. Don't be a sucker.
[End of list]
I've been on a lot of down notes lately here on the Backstage Pass, basically ever since the big up-note of the expansion/merger from a month ago. And I don't want to set the tone that it's always doom and gloom because the reality is that it's not. So after airing five grievances above, I think it's only fair that I air five times five things that are good and make being a part of the game trade wonderful.
- My employees are absolutely outstanding and have cultivated a deeply positive store culture.
- Every day people come to my business to get away from the grind and enjoy themselves, and I love the fact that they get to have fun because of DSG being here.
- I have people who started off as customers and have genuinely become friends at this point, more people looking out for me than I ever realized or expected, and I value them tremendously.
- It feels great to be back in the video game business for good. Everything from experiencing some of the newer stuff for the first time, to some of the great buys I have been getting on rare or older or unusual gear, to the upside potential of repairs, video mods, and like such. I love it.
- I get phenomenal support from my distributor reps at GTS and Alliance.
- There are professional retailers in the industry doing strong things with their stores and businesses and they have given freely of themselves and their guidance to show me their ways.
- There are professional publishers in the industry who fully recognize the landscape we retailers face and tailor their product vectors to ensure that the stores who promote their games in good faith are in a position to compete and thrive.
- There are neighbor stores and owners right here in my metro that are excellent establishments and excellent people, whom I am proud to know and to whom I am proud to make referrals.
- Supply issues notwithstanding, it's nice to have products so nuclear hot that they sell out at full price the moment they hit the shelves. Final Fantasy TCG, Star Wars Destiny, Pokemon 20th special sets, and so on.
- Accessory manufacturers are getting better. They are figuring out what we need and want almost before we need and want it. There has been at least one new accessory every month or so that as soon as I saw the solicitation, I knew it would be an evergreen product for us.
- Miniatures, the category that caused me headaches earlier this year, turned sharply positive and started punching its weight this month. Our store's miniatures community has been increasing in quality at a noticeable rate.
- Magic: the Gathering content is at an all-time quality high.
- More young players are enjoying the Pokemon TCG than I have ever seen.
- FFG is on a hot streak for general content quality between Destiny, the current Netrunner cycle, and games like Mansions of Madness 2.0 and New Angeles.
- Even as I prepare to move away from it, the comics category continues to churn revenue. It didn't hit the metrics I needed, but it is still a draw, day in and day out.
- Christmas sales got good. It took until the week before, but they got there.
- Every now and then, not often, but once in a while, I make a buy in good faith on what I believe to be a fair payout, and then upon digging into it I discover jackpot value. Sometimes I have to work for it a little further, whether repairs or what have you, but still. Just gotta keep making solid buys and let the law of large numbers send those my way.
- I love when I see our players putting a lot of time into modeling and painting up an army and it comes out looking terrific. The entire process from seeing them painting away an afternoon to seeing the troops and vehicles spread across a table is really healthy, they made that game an expression of themselves, and you can see the payoff in their smiles.
- I love it when one of the long-time players from the trenches prevails and wins a qualifier, especially when they have to win through the hardest-bitten grinders to do it. Score one for the good guys.
- I have close allies in the trade who have helped me in my hour of need or opportunity and I look forward to a chance to make good on that for them.
- It is a genuine blessing to have a livelihood where I am able to leave on a moment's notice in case something serious comes up or I am otherwise needed all of a sudden.
- I have a ten-minute commute, if that. Not a negligible thing as the brutal downtown commute was a significant part of what made me want to leave government service.
- I am getting the best support ever from my family as I prepare to undergo the process of getting back into the legal industry in 2017-2018.
- I am having the best time ever seeing my kids enjoy the fruits of my labors.
- Every day I get a great photo of Jeff Goldblum in my Facebook feed.
Have a wonderful holiday weekend, everyone!