General Announcement Regarding Reopening DSG's Game Room

QUICK AND DIRECT NEWS: The exact reopening date of the game room at Desert Sky Games will depend on CDC and AZDHS guidance for gatherings over the course of the next several weeks, and on Wizards of the Coast's decisions regarding the date that sanctioned play may resume.  The absolute soonest it will happen will be June 5th; we are not considering any dates before that.  We believe a more likely date is circa June 26th, the Magic Core Set 2021 Prerelease Week kickoff day.  However, it remains a moving target.  At this time we believe it is still imprudent for game stores to resume hosting tabletop gameplay, even though several are doing so.

RELEVANT AUTHORITY: Rumor has it that Governor Ducey will give us essentially free rein to re-open all aspects of our business on or around June 1st, to the extent that we don't have it already.  The CDC has already issued updated guidance that surface contact is no longer believed to be a critical vector for COVID spread, so we could in theory reopen the arcade at any time.  However, the CDC's same updated guidance re-emphasized that person-to-person respiratory spread is still considered a serious risk.  COVID is, after all, a respiratory virus.

EXPLANATION: Look, I have been a strong advocate of limiting the duration of the shutdowns and getting businesses back open.  I am a capitalist's own capitalist.  Nobody on this planet should think I'm making this decision from a standpoint of fear or an agenda to keep small businesses (including mine, apparently) stifled so I can, I don't know, enjoy quarantine or something?  I get that some people have taken advantage of this shutdown to enjoy a leisurely schedule of telework, if not an outright paid vacation.  And I'm enough of an anti-commuting advocate to appreciate how much some people may be enjoying the extra daily time.  But not all of us are lounging through this thing.  Obviously health professionals are slammed.  Everyone in food service has been working their tails off.  I've also been busy beyond all insanity since the shutdown began.  Turns out a couple of owners doing the work of ten staff members, or even half that, presents difficulty.

As I wrote recently, there is a very strong financial motive for DSG to reopen the game room.  It is going to happen.  Just not yet.  And the bottom line is we need to see the numbers continue to improve/flatten/trend_better before it seems prudent from a business standpoint to proceed, and even better would be that occurring in tandem with more favorable official guidance.

We're not a church, fortunately, because choirs were apparently early spread vectors, and basically rooms full of speaking or singing people are very dangerous, which is why all the concerts are still getting postponed.  A TCG tournament, however, is very like these things in terms of droplet emission, and a Dungeons & Dragons game is even worse so for its participants.  In-store gameplay remains an acute concern, while ordinary shopping activity at DSG is reasonably safe at this point by current reckoning.  And yes, we are buying Magic cards and video games and systems at this time.

Thank goodness, it's scorching hot outside already, and respiratory virii fare poorly under those conditions.  Once you come indoors, a sick person or asymptomatic carrier can still spread COVID via droplets, however, so we're not out of the woods yet on that count either.

Thanks to the CDC guidance update cited above, we will likely open the arcade in the near future before opening the rest of the game room.  We're wrapping up some upgrades and maintenance, and we're excited to let you all try them out.

Once we do re-open, the likelihood of us requiring waivers is high.  Unless the Arizona House's bill to shield businesses from COVID lawsuits, a bill that passed just before the chamber adjourned sine die, gets taken up and passed in the state Senate, we're forced to make all comers sign a binding contract indemnifying us from their own potential plague-ridden outcomes, which also means we won't be able to let minors into the game room without parental accompaniment, since minors cannot be bound under contract, which is what a waiver is.  I need the logistical hassle of running essentially a bowling alley but there's just the pro shop and no lanes, like I need a hole in my head.  So as you might imagine, even if we were not already inclined to wait for the health and protection of our staff and player community, we are also inclined to wait to give the legal landscape time to get dressed and compose itself.

I mentioned the Magic Core Set 2021 Prerelease Week above.  This is a tremendously smart thing Wizards has afforded stores the latitude to do.  The prerelease may be run as any number of events (not limited to nine) over the course of the entire week.  Stores that want to run a long series of eight-player pods, one at a time, to keep player counts low and reduce contagion risk, may do so, while still being able to sell through our prerelease product allotments and provide the prerelease gameplay experience our players enjoy so much.  DSG won't be re-opening the game room for this event in the direct face of strongly prohibitive guidance at that time, but if the coast is about as clear as we can realistically expect in today's circumstances, we will end up going ahead with it.

Thank you for your continued understanding and cooperation.

Returning to Cruising Altitude

I've been wanting to finish a couple of different incubating articles about broader industry topics, but I can barely find a few free hours these days.  Since so much plot is going by so quickly, I figured this would be another good opportunity to document some of what is happening.

We'll do this in no particular order.

The Governor's stay-at-home order for the month of April ended up lasting until just after the end of the month.  Most mass-market businesses never closed, so there was a real element of unfairness that I think we're going to see fallout from for years, in terms of how much the competitive table tilted against small businesses.

But in any event, on May 4th, small stores were allowed to open to shopping by appointment and curbside sales.  These were actually not permitted during the April shutdown in Arizona, but many stores just broke the rules and did whatever.  Given that none faced any penalties or consequences, it sounds like they guessed right.

Then, starting May 8th, we were allowed to open outright.  However, the 10-person-gathering limit is still in place, which makes it pointless to try to open the game room.  I am well aware that events can be run with as few as eight players, and that we would have two staff members at the front and shoppers wouldn't be near the players if we seated them deep in the room.  That calculus unfortunately misses the point that a game room is only cost-effective to have at all, if it is being filled and used with sales-driving events to a substantial amount of its capacity.  Even our reduced game room needs to see 20 to 30 people seated throughout a day to be worth opening and maintaining and so forth, and that's a scrape minimum.  So until we see significantly more lenient guidance on gatherings, our tables will remain off-limits.

Anyway, we started bringing the staff back on April 27th, the week before the re-opening.  Griffin and I had spent basically an entire month shipping online orders and doing store renovation projects, like upgrading our central video game merchandise "island" (photo above) and installing real cabinets for all the video game media.  The game room is smaller now but looks way nicer.  There are now color display cases on the racks for almost all cartridge titles, a subtle upgrade that adds tremendously to the shoppability of that merchandise.  The sales floor has been reconfigured to make more room for human beings during what we assume will be a prolonged period of social distancing.  The arcade has been under maintenance, but it's also not yet re-opened so that part isn't done.  And we have pleasant lighting effects added throughout the store with more still to come.  With the staff back on hand, we were able to restart most of the normal business processes and get ready to serve human beings on the premises.  That meant a bunch of quick cleanup of tools and materials and postponing a few upgrades for later.

Most of the staff was back in action by last week, and all our full-timers will be back by the start of next week.  Business does not support this staffing level yet, as one record sales day is unfortunately not a full offset to many very quiet days, so we went ahead and took the Paycheck Protection Program (PPP) loan.  It wasn't a ton of money, we could have survived without it, but the COVID pandemic absolutely had a substantial negative effect on our business, and with the loan fully forgivable if you spend 75% of it on payroll and 25% of it on rent, it was a no-brainer for us.  Our payroll and rent figures through June 30th easily exceed the PPP funding total.  It could end up being a bit of a mess when we go to have it forgiven, same as when we went through the process of getting it, but in the end it worked out on the front side, so hopefully the same will remain true when it comes time to close it out.

Many of my peers are taking the Emergency Intervention Disaster Loan (EIDL), and there is a business case that anyone who can qualify should take it as a gigantic hedge, particularly against the possibility of a late-2020 COVID resurgence.  I probably should be taking it too, but I really just don't want the debt.  Our balance sheet is pretty decent lately and should only get better as business returns to cruising altitude.  For the moment it seems like the funding has run out anyway, or is close to it.  If Congress reloads the trough, I'll reconsider pulling the trigger.

Distribution is finally like 90% of the way back.  We did get deliveries during the shutdown, despite that there wasn't a need to get some of that product, where the product in question is mainly meant for in-store discovery and purchase.  I would love to have gotten triple the video game consoles that were shipped in, but as it happens I'm glad we got what we got because it all has been selling quickly.  I wish I could say it has all been selling easily, but nothing is ever easy when you're a small business, and the shopper who has only ever bought from Amazon and Wal-Mart comes in expecting concierge service and abusable returns, all at impossibly low prices, and tends to end up unhappy with the experience that we delight our everyday visitors with.

Meanwhile, it has now been 90+ days since the last time anyone traded in a Nintendo Switch, Playstation 4, or Xbox One S or X.  Take that information as you will.  Have a great week!

Cinco de Money

The governor permitted small retail stores like DSG to re-open Monday on a limited basis, with appointment service and obviously still no in-store gameplay.  The public responded to the tune of triple the sales of a normal Monday.  While we have no illusions that this pace is sustainable, it does speak to pent-up demand and is a relief to see after the awful level of politicization of the COVID shutdowns that has emerged in the public sphere.  We could have opened the doors to a cloud of inbound hate, but nothing of the sort materialized, thankfully.

We have plexiglass, masks, wipes, and hand sanitizer.  The floor has markings every six feet from the register.  Online orders continue to come in at a turgid pace, which is still a strain to keep up with on a staff that hasn't fully returned from furlough yet.  But we're managing it.

One of the things I'm happiest about is finally getting to return to tasks that generate money for the front-of-house primarily.  I put all of that on the back burner when we closed, because we could not possibly benefit from it until we re-opened.  Stuff like processing video game buys, that sort of thing. As a result, gigantic piles of systems, games, controllers, and accessories built up in my office, unattended to.  I am now digging my way through those piles and getting stuff out onto the racks and into the cases just in time for people to come purchase it.  In one case earlier today, I wasn't even finished, a gentleman arrived asking for a particular Rock Band guitar instrument that was still in processing backstage.  I had my staff wipe it down, I added it to the system, didn't bother with a barcode and label, and we just took care of the guy.  There's a lot of such ad-hoc work right now, as we expected.  Our data mining will be imperfect, but I don't like turning down money.

My back-office staff will be at full-strength-minus-one starting next Monday, and that's a good thing, because the process of adding singles to stock was one of the things we just grudgingly accepted as being done less during this whole ordeal.  As a result, our singles stock has thinned.  It's good as far as getting some money for cards we've long since needed to see move.  It's bad as far as projecting abundance and the confidence of being a store with all the major staples in stock.  Once we've normalized front-end ops to meet the new reality, complete with our appointment logging, we should have a better idea of how much labor can be pivoted over to bridge the gap of big piles of bought collections that have fallen behind pace in being added to stock.  Griffin tried to keep the shiniest and most useful things we encountered in sorting available for purchase, but he could only do so much while we simultaneously worked on all the other maintenance, cleaning, repair, upgrading, and oh yeah, shipping out the daily torrent of orders that never really did slow down.

Today is the Cinco de Mayo that isn't.  There will be no fiesta, no margaritas, no tacos... well, actually, yes, those last two we will have.  But no fiesta.  And there's something fundamentally wrong with that.  But however much we're able to take part in, we are going to do so, in celebration of being able to get back to business.  The month with locked doors was a slog, and while I honestly think we seized some opportunities -- just wait until our photo spread with the extensive facelift we've given the store facilty -- it was also mentally straining, stressful, and stretched us thin.  Every morning right now, as soon as that first customer walks in the door, it's one little victory.

Now let's see what happens next week with Ikoria.