Tuesday, September 10, 2019

Welcome Those Whom Your Adversaries Disregard

I am sympathetic toward PepsiCo over the Coca-Cola company, because of a bit of history between the two that I think is illustrative of what happens when a business calcifies its thinking and a smart competitor swoops in to pick up the money that's being left on the table.

Among the specific expressions of my sympathy toward Pepsi is that DSG only carries Aquafina bottled water.  Never Dasani and not the house brands unless Aquafina is unavailable.  Not only is Aquafina good, but it's bottled a bit more ruggedly than most other offerings, and thus provides something of a "higher-end" experience.  But more importantly, I like supporting (with dollars) a brand with a business that includes such an admirable bit of history.

Dr. Richard Gunderman wrote a great article in Psychology Today about how Coke and Pepsi fought for business over largely racial lines in the 1940s and 1950s.  Naturally, the Atlantic turned the story into clickbait, but it's no worse a story for being thus utilized.  I highly recommend reading Dr. Gunderman's article in its entirety, but the summary is this:

Coca-Cola was based in Atlanta and had little interest during that era in catering to black-owned businesses or customers, mainly because its decision-makers were typical southern racists.  The company had even endorsed a segregationist's re-election as governor of Georgia.  This is before the Civil Rights Act, at a time when restaurants and hotels would openly Wuher black customers out the door with a "We don't serve your kind here" or worse.

Meanwhile over at Pepsi, executives saw the statistical growth in what was then called "the Negro market" and observed Coke flipping those potential customers the bird, over and over again.  The light bulb went on, Pepsi remembered that it liked money, and the company put together a "special markets division" and tasked them to develop a marketing campaign that has to be seen as one of the all-time against-the-odds successes in all of advertising history.

Pepsi tied high-profile black endorsers to positive family-and-community imaging in its marketing to black communities.  While other companies utilized negative stereotypes about blacks, Pepsi went the other way.  We should caveat that Pepsi was no bastion of noble purity throughout this; plenty of Pepsi's own employees were as racist as the next guy during that time period, and gave the "special markets division" short shrift and little respect within the company even as it was succeeding in its mission.  Pepsi also took care not to push too hard on the special-markets campaign within earshot of "conventional" markets, in fear of upsetting white audiences.  It's dismaying that they hedged their bet in this manner, but supposably that was the reality of the time.

Well, we all know how the story turned out.  The good guys won.  Black communities saw that Pepsi was catering to them, and they reciprocated that with business at the register.  Pepsi's sales increased dramatically and they rose from an economy brand to the solid second-place market position ever after.  And the efforts of Pepsi's "special markets division" became a case study for a business finding and embracing a niche audience and turning it into something much more.

(As we entered the modern era and both companies became megacorporations, they ultimately shed any reluctance to exploit any market they could possibly find and identify.  Coca-Cola in particular courted the urban minority youth market hard with a basketball-focused brand makeover for Sprite that ran for years.  But history hasn't forgotten their Old Shame.)

So, this is the point in the blog article where I want to be careful not to hit the ham-handed cliches.  Surely it has been discussed ad nauseam how awful the hobby game industry is when it comes to dealing with anyone who isn't a cis straight white male.  Yes, there has been progress.  Yes, there is a general progressive attitude in the more professional networking circles.  And yes, stores like mine who are in it for the long haul found ways to roll out the welcome mat to... non-males, non-cis, non-white, non-straight, etc, gamers.  But we're not fully there yet, as an industry.  And any time some LGS disregards those audiences or aligns with those who impede that audience's ability to enjoy games, that's an open opportunity for every competing store that likes money and isn't aligned with bigots or bullies.

But I'm not writing this article to virtue-signal and I'm not writing this to earn a pat on the head.  I want to challenge myself, and the rest of us, to find out who we aren't bringing in, but would otherwise be reaching, and whom our competition is disregarding.  And I mean more than just competition in the form of other hobby game stores.  Online is our competition, the mass market is our competition, other forms of entertainment are our competition.

A few that come to mind, that I think are food for further thought:


  • Visually impaired and hearing-impaired gamers.  I don't think any of us would not want to welcome them, but wishing does not make it so.  We have a blind D&D player and I was initially at a loss as to how to facilitate his gameplay.  Fortunately, my store manager had some military training on that and he knew right away how to provide movement guidance, environmental guidance, verbal and otherwise auditory cues, and so on, so that the player could get into the game and fully participate.  I don't even know what I am going to do if a deaf player joins a booster draft, for example.  I imagine writing would work, but would be slow and cumbersome.  Nobody in the company knows sign language.  At DSG's scale, it's not a matter of "if," but of "when."



  • Younger gamers, especially those barely of age to learn how to socialize in a tabletop or role-playing format.  Most conventional FLGSes are utterly unprepared for the particulars of this audience.  The trailblazer in this regard is surely Rob Gruber of Good Times Games on the west coast of Canada, whose paid-admission all-ages immersive roleplay experiences have been polished to a shine and have his business punching well above its weight class.  Follow the Good Times Games feed on social media if you want to learn about an orthogonal approach to the hobby game world that just might be the most unscratched surface left in most markets (including my own).



  • There are gamers I've mentioned here before who are avidly and assiduously determined to consume only G-rated or PG-rated entertainment, such as the LDS (Mormon) missionaries who already frequent DSG during their free-time days.  I suspect that this potential audience is both deeper and more multifaceted than any of us realize.  I'm not even sure what this audience is called, and I don't think it's limited to Christian or similar communities either.  And I would imagine this demographic probably has reasonable disposable income... that they already aren't spending on a lot of pop culture entertainment offerings.  There was a business called CleanFlicks that used to edit DVDs and VHS movies to reach this audience, and they were doing well until the movie studies sued them for creating derivative works.  They re-opened purely as a curation service and thrived for six more years after that until streaming killed the video rental biz.  I don't think an FLGS would want to actually edit the games we sell, but curation and filtering might have some serious value here.  In fact, the more I write about this, the more I want to try it.  I doubt Magic: the Gathering would make the "clean" title lineup, so we would start with unambiguously family-friendly fare like Ticket to Ride and build from there.  I am also not religious, so I would have some homework ahead of me to understand the audience and tailor the offering.



  • Spanish-speaking gamers, or potential gamers, and you can substitute in a linguistic minority that is more pertinent to your locale if you have one.  Almost two million people out of the five million living in metro Phoenix speak EspaƱol, and just by the law of large numbers that suggests hundreds of thousands at least who speak Spanish primarily, and may speak little or no English at all.  Major games like Magic: the Gathering and HeroClix are available in Spanish, and Asmodee and other board game publishers include multilingual instructions with most or all titles.  Most modern video games play in every language based on console settings.  How many of those people would shop at Juegos de Arizona if I had a bilingual staff and opened a location in the heart of demographically Latinx parts of town?


That seems like a very short list, and I'm sure there are obvious ones I am missing.  Who else could we be reaching?  Who might be on the outs of the bar-and-club social scene, and not even know the tabletop hobby is a thing?  Who might be ill-situated to live and breathe social media and e-commerce, but still enjoy strategic challenges?  Not all of our stores will be in a position to capture all of these "fugitive resource" audiences, but at the scale of small business, just doing an excellent job developing one such niche market might be enough to spell economic success and a substantial first-to-market incumbency advantage.

Tuesday, September 3, 2019

Throne of Eldraine Collector Booster Pricing

For the first time, there will be a "Collector Booster" offering with the new Magic: the Gathering expansion, Throne of Eldraine.  This booster will basically be chock full of value; more on that in a moment.  In fact, I am pretty excited to get my hands on some even though I rarely play these days.  I think it's an awesome idea and I hope that as they iterate, they will polish it to a brilliant sheen.  In the meanwhile, though, we all get to be beta testers for this, and that means some bumpy roads ahead in a few more weeks.

The collector boosters will come in boxes of 12 packs, and those boxes are expensive as hell from distribution, let me tell you.  MTG Design Director Mark Rosewater famously estimated a "$20-$25 store price" for the boosters and he needs to shut right up because that's barely over wholesale and players have assumed (justifiably, given MaRo's authority) that he is telling the truth and any store pricing to market is just greedy.  For a normal booster product he would have been quoting a short-margin estimate.  And this is no normal booster product.

Market value on collector boosters is going to be more than $20-$25.  We don't really know how much more yet.  The TCGPlayer lowest offer as of right this moment is $36.98 shipped per collector booster, which seems like a reasonable guess.  I expect $45-$50 and up to be the norm once the dumb stores undersell their tiny allocations of it and the limited supply in the wild exerts upward price pressure.  That's right, supply is constrained severely on this.  Ratios of booster boxes to collector booster boxes from distributors ranges from around 12:1 to 20:1 on the purchase, though I've heard of outliers in both directions.  I'm not going to discuss the ratio I got, except to say distribution took good care of me.  But even with that, and even with DSG's order of literal hundreds of booster boxes of Eldraine, my collector booster allocation is very small, and so is everyone else's.  Remember these are twelve boosters per box, not 36, so it's even more limited than it sounds.
And the collector boosters are a one-shot print run.  Which means it will be out of print immediately and subject to market demand immediately.  It also means thousands of collectors will buy collector booster boxes to throw in their closets for years to come, further shrinking the circulating supply and exerting even more upward price pressure.  I'm not just imagining this, it's very easy to look at how the market has behaved with other highly demanded, limited-print products and assume this one will work similarly in many respects.  Ultimate Masters and Commander's Arsenal, for example.

If collector boosters had been an unlimited print run, MaRo's $20-$25 number might have made more sense, though based on our cost, I expect most long-run stores would have opened at $29.99 and probably done something like 4-for-$100-tax-included as their special splurge bundle deal.

By the way, what booster pack could possibly be worth that much?  Well, the wholesale price is so high it's tough to say if it really will be worth it, but the menu certainly promises a lot.  Each collector booster contains:

  • 1 rare or mythic rare with extended art;
  • 1 foil rare or mythic rare or special-frame card;
  • 9 foil commons/uncommons;
  • 3 special-frame cards such as showcases or borderless planeswalkers;
  • 1 ancillary card that ordinarily appears in non-booster product; and
  • 1 foil token.

That's... that's a pretty impressive yield even at a high price range.  It's a riff on those neat all-foil Alara block boosters that came in big art blisters.

Moreover, this product configuration is ideal for what stores would want to break for singles, except we don't dare break many (or possibly any) of these for singles because we're barely going to have enough to serve the sealed-pack demand we expect to see from our players, and selling players what they want is a tremendously high priority for me.  So as always we'll have thousands upon thousands of bulk commons from regular boosters, which are now being given the moniker "draft boosters," as we open cases of them to fill our release day stock, and we mostly leave the collector boosters alone.

Honestly, I hope the collector boosters are such a huge hit that Wizards just makes them unlimited prints.  I don't care that the price will go down.  People see me talking about a high price and assume I'm out to push them for as much money as I can get.  That's not the case.  I make money just fine doing business normally day in and day out.  I want people to be able to get the pieces to play their game.  I am perfectly happy to do that by means of a maximally accessible market.  Unfortunately, the market in reality is full of limited prints and out-of-prints and both genuine and artificial scarcity and I have to use tools, including price, to manage the provision of those wares to my clientele.

"BUt bAhR Wut if UR wrONg & CoLLectOR bOoStErS R chEEp fOr a LOng tIMe???"  Then who cares?  I'll have too much stock and I will need to either be willing to sit on it for longer, or follow the market price downward to join the herd.  I do this all the time to items where the market price drops.  It's just not noticed as much, because if market price is going down, usually that means the card or product is not in demand, which means nobody is asking for it, which means nobody is observing that we're reducing the price on it.  Read your Frederic Bastiat already, people.  Educate yourselves.  Sometimes the most impactful economic effects are unseen.

I'm pretty sure I'm not wrong about this, though.  You might say I'm betting my livelihood on the soundness of my judgment.  That's not arrogance or conceit, it's confidence in what I've learned with years of experience.

You know who doesn't have years of experience?  A lot of game stores that I see already underselling Throne of Eldraine, both the main set, the collector boosters, and the prerelease.

I don't think I have to talk much about the prerelease, it's a literally not-outsourceable experience that should command a premium and stores that chronically undersell it tend to fail and close.

The pre-order boxes that are available at the prerelease for Eldraine include a collector booster this time, while supplies last.  The supply we've been allocated is slightly over half of the number of early booster boxes we have to sell, which means not everyone can even take advantage of the promotion.  DSG gets well over 100 booster boxes for the early release, and we were allocated only enough collector boosters for the early release to pair with fewer than 100 of those boxes.  That's not a very large allocation.

A store that's only getting 48 or 60 booster boxes allocated for early sale is going to have, what, two or three dozen collector boosters to pair for the promotion?  According to Wizards, they could have as few as 12, or one display full.  And yet they undersell that, because that lets them take players' money now, and make excuses later when early release day comes and many pre-order customers don't get the collector boosters.  I'm sure they will tap-dance a promise to make good with a collector booster and maybe an extra couple of packs a week later at release, and some players will be OK with this, while others will remain angry.  As a player, I'd be offended if a store took my pre-order money up front, knowing they weren't going to have enough collector boosters to cover the early release orders.  I would feel misled, deceived, lied to (by omission).  I guess we'll all see how things shake out in a month or so.  Players are smart, they usually figure out when they've been had.

For DSG, we're not going to take a single pre-order that can't be paired to a collector booster until those have sold out, and there will be full disclosure at that time.  I suspect the non-paired boxes (that still do get the buy-a-box foil card) will mostly sell during prerelease weekend.  To me this is basic integrity, and I see most reputable stores setting things up similarly, including many competitors.  Most of us know Throne of Eldraine is going to be a firecracker hit of a product, and we are perfectly content to make great sales on it in a straightforward manner.

I've rambled enough about this for now.  It's exciting when a big change happens to Magic as a product, especially where substantial sums of money are involved.  It's a chance to look at the landscape and draw some inferences and make some decisions and see how they play out.  I guess I'll know in about two months whether and how much those decisions were fruitful.