And it's just as well we sold out when we did because last week broke the news that Mox Boarding House was coming to Chandler -- to a site three miles away from DSG, no less. You may recall I visited Mox's Bellevue, Washington location in December and I know a bit about them firsthand. Though Mox's branding is based on Magic: the Gathering, and their parent company is Card Kingdom, the audience their offering is tailored more directly is that of general tabletop and the "board game cafe" crowd. In fact, I had considered making this article a rundown of my research regarding Mox's arrival, which was surprisingly bountiful using only public-facing sources. But I've done the work for that and I want to enjoy the advantage of that information until somewhat later in their preparation timetable.
Mox's loadout for Warhammer is extremely on point. Palatial game space, maxed-out tables, separation from the card players, and deep stock of everything Games Workshop prints. In short, it is everything a Warhammer player could want, and is Tier 1, as I explained in the Horus Hiatus article. Even the Games Workshop company store to the southeast will be forced to ante up with the exclusives fast and furious to keep the player base coming to them. I mentioned my small-template discount wargames store model, "SWIG," as an iron-in-the-fire I would leave until such time as opportunity presents. Based on my research of Mox's situation, I don't see them hitting ROI for the better part of a decade, and that means they are in it for the long haul. I am discarding SWIG. I am just never going to do it now. The coast will not be clear until a future date sufficiently remote that I'm sure I will be doing other things by then. So if I wasn't truly out of Warhammer already, the arrival of Mox Boarding House in all its grandeur and excess has now nailed that coffin shut.
Now, about other general tabletop. I mentioned in the Warhammer article that:
"Board games are a bit more fluid, because players don't really need the store to have a place to play. We can accordion that category bigger and smaller at will and it mostly won't get noticed. Deadwood stock can be deleted from the racks quietly and sent to Amazon FBA, a process that has already been happening [...] I envision their departure from DSG happening without any announcement."Board game sales in Q4 2019 were below my expectations, while not actually being bad in absolute dollars. That is to say, evergreens performed. Despite DSG not being a board game destination, we sell upward of a dozen copies of Catan a month, for example. The base set. Like, who doesn't have that already? A lot of people, apparently, and I am more than happy to furnish the goods. In fact, we see just downright great turn rates on the likes of Splendor, Azul, Betrayal at House on the Hill, Munchkin (the base set!) and Dominion. This pace of sales emerged right around the time we experimented with dialing in modest discounts again, which was earlier in 2019, and I'm comfortable right now concluding that it's meeting a component of our local market demand in a way that market wishes to be served.
At the same time, the big fails we see in board-game-land are new releases that don't turn evergreen, such as Tapestry, new "hotness" that ends up being alphas-only like Oceans, and surprisingly, small-box party games have, ah, "nosedived" since this time last year, and now barely even register on the needle aside from Secret Hitler. Most of the party games are publisher-blocked from being sent to FBA, but let me tell you, I sold an awful lot of other titles that were supposed to be the next great thing, by means of large boxes trucked to Rialto, California. (That's the FBA hub nearest.) There are clearly board game consumers for these things. They just follow the pattern I explained in the Horus Hiatus article. They shop Amazon first, and sometimes only. They shop the mass market. And they shop the brand vertical. They may shop Tier 1 independents. They never make it in my doors, because I'm not Tier 1 for board games, so I should never have ordered that inventory, and it was stupid and wasteful for me to do so. I should have spent that money on Magic cards and video games.
Who are the Tier 1 independents in Phoenix for board games? Right now Imperial Outpost is definitely one, and I think it's safe to say Game Depot is also. To the extent that Depot's scale isn't absolutely off the charts, their laser focus makes up for it. Their customer base surely considers them Tier 1. Mox Boarding House will emerge from the birth canal at Tier 1, possibly even Tier 0. DSG doesn't have a trump card in hand for this. We're going to have to build into a working strategy.
So moving forward, here is the deployment I am going to try, including and continuing from recent adjustments that worked. It is going to have limited flooring and only in places or on fixtures where board games make the most sense. And it's going to have us on an exposure so minimal that I can push it all into a lake at some point if I don't think it's working.
Firstly, it will all be discounted. Most of this is already in place, as we started discounting tabletop on a gradual basis after the disappointing 2018 Q4 and with so many aggressive competitors entering the fray last spring and summer. If you should happen to visit and see that one of our board games is at full price (or higher than a publisher-imposed price minimum, which does exist in many cases), hang tight, we're getting to it. If the price never changes then it's probably at the allowed minimum already.
Secondly, anything that's licensed from the IP of a video game, or is clearly branded as video-game-chic, and is not a smoking crater in terms of quality, gets to stay. These titles have consistently sold for DSG, especially as our video game mindshare has increased. For example, Boss Monster, Fallout, and the Chocobo series of casual titles are all proven winners and they aren't going anywhere. I expect to do some reloads from The Op (formerly USAOpoly) to fill in this subcategory, though obviously there's enough saturation on those options that I can be selective. Stocking these, even when they don't sell quickly, amplifies the voltage of DSG's video game branding.
Thirdly, the heavy hitting evergreens can stay, though as soon as I see signs of a soft underbelly, off to FBA it goes. There are a reasonable number of these games, but not an infinite number. I'm going to stop taking the Asmodee Top 40 bonus games because I have no intention of stocking the entire required list anymore.
Fourthly, the party games are going to attrition out. Many of these are under strict publisher resale requirements and either I cannot discount them, I cannot FBA them, or both. You can still redeem DSG Stars, of course. I think the party game fad has run its course and board gamers are turning back to core fare, while casuals who never embraced the deeper hobby are flitting off to the next shiny thing that caught their eye.
Does this amount to DSG discontinuing board games? I can't prove it doesn't, but I also think the glut of product released into the category has made it possible to focus on a subcategory like "video game IP" or "evergreens" and be able to leverage sales out of the lack of any need to attempt every major new release and then clog a clearance table with the ones that fail to catch fire out of the gate. It blows my mind how much churn there is in the general tabletop category at brick/mortar and how much of it I ended up having to perform even at my lesser scale. Contrast that with the way that Magic and video games move at DSG: We bring them in, and they'll sell when they sell. No urgency, because for the most part, they gain value as they sit there. There are exceptions, but they are just that, exceptions.
In the meanwhile, let's see what happens when we lay out a spread of Greatest Hits, Everyday Low Prices, and plenty of room to shop them. It's a framework that has seen some success in the past for some business I heard of once.
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