Insert Coins Someday Soon

Our niche industry has been hard-hit by the COVID pandemic, particularly board game cafés and stores that heavily allocated focus and resources to organized play.  The cafés have already been massacred to some extent and the ones that are still open right now and haven't failed yet are either those who were able to raise some tide-over capital or those with a rugged backbone of orthogonal revenue of one kind or another, such as retail.  DSG has been fortunate to have a strong video game business and a strong Magic singles e-commerce business, because in-store sales of general tabletop have cratered deeply since March.

The sector that COVID has just utterly murdered, though, is the industry of coin-operated amusement machines and vending, or just "arcades" or "coin-op" for short.  As ABC 10 San Diego reports, coin-op routing in particular has been choked to zero, with no revenue and unavoidable layoffs, and hulks of equipment sitting inert in the back corners of restaurants, bars, and in storage.

It has been much the same for DSG's Vintage Arcade.  We recently added all kinds of amazing gear, including a bunch of modern Japanese candy fighter widescreen cabinets and a bunch more sit-down racers, and they've all been taking up square footage and earning nothing for six months.

If people can't (1) congregate and (2) touch things, well, it's difficult to see viability for the coin-op business.  We are fortunate somewhat in that the powers-that-be have determined that COVID's spread by surface contamination is not a serious vector, whereas aerosol and droplet transmission remains significant.  Moreover, we are fortunate in Arizona that the summer finally did its number on COVID, with an assist from more widespread mask usage, dropping our death rate to statistical insignificance and our spread rate to chalk.

That provides hope that perhaps the arcade can re-open soon.  Across the continent, COVID stats vary, so this may not be true for coin-op businesses everywhere.  But in Arizona, the numbers really do suggest that we've reached a point of relative safety for this.

Re-opening our entire game room is not going to happen until, at soonest, the expiration of Wizards of the Coast's sanctioned play suspension.  This currently is set to end in late September after the At-Home Prerelease Event for Zendikar Rising.  We can't 100% forecast what the COVID stats will look like overall by then, so it may transpire that Wizards extends the suspension, and we will be fine if that is the case.  Arizona's stats might also worsen sharply, which would have us hold off until a later date.  In any event, we are quietly preparing for a possible re-opening of the game room at the end of September or early October, at a deeply reduced capacity.

Taking what we know in the previous two paragraphs, we're about ready to turn the arcade back on, most probably to occur in time for Labor Day weekend.  There are some final upgrades and maintenance we want to take care of first, and we're going to move some of the equipment to take advantage of excess floor that won't be needed anymore for tabletop events.  We will be paying attention to control panel cleaning, there will be more space between and around machines than arcades typically provided in the Before Times, and we'll finally get to use the new ceiling lighting profile that keeps reflected panels out of the way of game screens.  I do not expect throngs of people to show up to play in the arcade initially.  But it will be nice to see it start up again and I'm sure there's some pent-up itch to throw down a few Street Fights, hit the shooters, get our retro on, and slam some silver-ball.

On that note, there is a subtopic that I don't want to overlook.

We've had six months to gather data and observe the landscape, and we've had to draw a conclusion.  Dungeons & Dragons at DSG is, alas, over.  The D&D player community has adapted to COVID splendidly, with software-enabled remote play, in-home play among people with a reduced exposure profile, and so on.  Reduced sales have tracked these changes, and D&D is in a gradual liquidation status right now at the store.

In essence, D&D as a game evolved in a way similar to comics, where the market compressed to where the only necessary independent brick/mortar retail presence is the tier-1 FLGS that utterly masters RPGs, and the majority of buyers will get what they need another way, either having it shipped to them or buying digital assets in the first place.  Now, I've loved D&D since literally the 1983 Basic Set red box and B2 Keep on the Borderlands, but I don't have the deep expertise in the RPG category that local stores like Imperial Outpost have, or that the late Gateway Games had.  As it was with Warhammer in late 2019, this is a situation where I cannot provide a best-in-class experience to the D&D player, so I need to get out of the way.

This is one of those categorical seismic shifts we knew would happen one day, and current events simply nudged it very hard such that it happened sooner.  A bit of an acid test of our decision on exiting RPGs as a category is, will players have a substantially worse experience in their games as a result of what we're doing?  It's difficult to argue that they would.

We have D&D product still inbound for a couple more months for sourcebooks, dice, accessories, and so forth, because of ordering lead times in distribution.  Because of this, our players will be able to enjoy some sweet deals and offers as we price those last few things to move.  Pending manufacturing timelines in China for various accessories, we think the last D&D item at DSG will be the Icewind Dale sourcebook and custom dice set.

We are also liquidating board games other than those that are tied to video-game licensed IP.  COVID really did nudge things, and what I think it did in the big picture is just skip us a few years ahead to where the market was going to be anyway.  Your FLGS that masters general tabletop is going to have to master just that, because it won't have mastery of Magic the way the specialist stores like DSG do, and vice versa.  I can imagine a further future convergence where general tabletop stores split off from wargaming even more than we've already seen; most major competitive metros now have independent FLGSes that are "Warhammer stores" and do little else.  Obviously in the rural areas, multi-classing fighter/mage/cleric will still be viable for independent game stores.

An inconvenient truth I have been staring down is that it will probably become correct within the next two years for DSG to split its Magic and video game categories into two separate businesses.  I'm probably going to be late to that decision as well, like I was to the separation of comics, wargames, RPGs, and board games.  But one thing I learned while working in government is that it is often best to let things play out a little longer or further beyond the point at which I would have preferred to make the call.  The clarity gained goes a long way toward galvanizing the decision and putting the business on firmer footing for its next steps.