Take Hold of the Flame

On the afternoon of June 19th, we were having record sales for the fifth day in the last ten, with a house full of players for the Modern Horizons 2 release weekend, in a 6k+ square-foot store that was approaching end-of-lease.  If you had told me at that moment that the store would be closed for the rest of the month, I would have laughed at you.

Less than 30 days later, we re-opened in just under 2k square feet, in a gorgeous fully-renovated suite on the other side of the same building, where our lease is renewed through 2025 at an occupancy cost so much lower that it's practically operating for free (and for the short term, "practically" is more like "actually").

But wait a minute.  Hadn't I posted right here on this blog that I was 95% confident the store would remain where it was through 2022?  (Amusing that in that same article, I forecast a "pandemic" as one of the "apocalyptic" scenarios that might throw all assumptions out the window.)

So what happened?

Fire.  Fire happened, and a supportive landlord who was willing to work with us to turn a loss into a win.

For a week in mid-June, a heat wave blasted the Phoenix area that was so onerous even we locals were hatin' life.  DSG had HVAC interruptions, brief outages, and other unpleasantness.  We even shut down the vintage arcade for a few days to try to reduce the power load.  Sometime around 7pm on June 19th, the heat blistered our external power junction assembly, and a bad connection arced many amps of power into ignition.

We cleared the store of guests and nobody was harmed.  It is testament to the great construction of our building and the safety measures therein that the other power phases continued uninterrupted despite a literal electrical fire burning inches away from their connection points.

Alas, the fire destroyed the entire junction, and replacement took weeks of parts procurement and installation, followed by weeks of city and utility certification before the suite could be used again.  (As of the publication time of this article, it was still not done.)  DSG faced a potential business outage right in the middle of our hottest streak in company history.  In fact, despite being closed from June 19th to the end of the month, June still came within a few percent of being our biggest month ever, and instead sits in second place behind March 2021.  The stakes could hardly have been higher.

To our immense fortune, we had already been working on our exit plan from Suite 7, which was approaching end-of-lease, as I mentioned earlier.  The other partners and I had spent months sketching out the branches of our potential site scenarios.  Through this preparatory work, we had already reached a provisional agreement with the landlord to move to Suites 11 and 12 for our lease renewal, but it was supposed to happen months into the future, closer to the Suite 7 lease terminus.  The landlord already had an inbound tenant signed on for Suite 7 who was ready to start construction whenever we happened to be out of the way.  We all figured late 2021 or early 2022 would be Go Time.

When the fire occurred and we learned how seriously it was going to disrupt business, we were able to amend the agreement with the landlord to just proceed with the move immediately, and give the inbound tenant a chance to get started and pass through Permit Hell sooner.  The inbound tenant was thrilled.  I can't disclose their business since that's not my information to share, but the entire DSG crew is looking forward to it being there, and we will be eager customers.

Moving immediately meant doing things on a tight calendar and some extra expense from not being able to slow-walk some of the renovations, but thanks to this spring's stimulus boom, we were positioned sufficiently well to proceed using cash on hand, and insurance is going to defray some of that cost later.  And we sharply minimized lost time.  I cannot stress how different this move has been from the last one, which ran way over calendar and way over budget and required us to borrow an inordinate amount of money at lousy interest rates.  This new move required us to borrow zero dollars and zero cents, and on top of that, again, insurance reimburses some of the expense.

So there it was.  We had a plan already in place, and what the electrical fire let us do (or forced us to do, depending how you look at it) is start before we were ready, and finish before we had preferred to, but ultimately move forward right away and reap the long-term benefits of that.

The MTG Forgotten Realms prerelease stood as a pretty hard calendar milepost that we didn't want to miss.  Under the original plan, we'd have hosted that and one or both of the Innistrad events from this fall in Suite 7, and then we'd shift all activities to the new suites seamlessly between major dates.  Instead, after coordinating with Wizards of the Coast and getting the appropriate permissions, Forgotten Realms became the first event in Suite 12.

We know the new location is smaller.  I've been telegraphing pretty heavily here and elsewhere that something like this was going to happen, so it's worthwhile for me to give some insight here on the business aspects of reducing our store footage in this manner and the business reconfiguration that goes along with it.

Having the largest store in the Valley was fun, but in many ways it was overkill, and it absolutely was not cost-efficient.  We had a huge and happy player base, and Suite 7 was certainly big enough to accommodate them, but during the long slide of tournament indifference that preceded the COVID pandemic, we discovered that it wasn't necessary to have that kind of capacity, since that river almost never ran bank-full.

Indeed, even at our fullest, we never even reached 50% of our imputed maximum occupancy.  Over the years, I had to get really creative to monetize surplus footage, and that's part of why Warhammer and D&D lasted as long as they did despite the organized play deployments for both categories failing to perform sustainably.  I had more space than I could fill, so things that were using that space inefficiently got a partial pass.  That partial pass finally expired when growing business components started making more beneficial use of that space, such as our TCG singles processing office.  It started to make sense to take those categories out of the equation if we were not situated to be top-tier in them.

That said, we are still positioned to serve the lion's share of our everyday player volume from before.  Obviously it will be a bit of a pinch at prerelease time, since we routinely seated double or triple our typical FNM player counts for that.  We've got about a 48-player max in Suite 12, and we can stretch that from time to time to about 64 players using additional space in our section of the plaza, including parts of Suite 11, once we've had time to set that up.  (We only need seating for 32 players to host WPN Qualifier events, if those ever resume.)

More importantly, we are poised to do a far better job serving our players than we did before.  Suite 12 has been fully renovated, from newer LED ceiling lights to awesome stone floors, and it's beautiful and comfortable.  Our WPN Premium application is already on my itinerary.  We hit a jam with the new tables we had planned, our understanding was that they were about three inches wider than needed (good) but it turns out they are three inches narrower than needed (not good).  But we still have the eight-footers in place with sweet covers and comfortable space around.  And obviously our HVAC system will have fewer cubic feet of space to cool during the hot summers.  Meanwhile, singles processing in its entirety takes place in Suite 11 and requires no additional steps from the player.

We have been telling the regulars who ask, that there is a long term plan in progress and it will make sense as the final pieces fall into place.  We're definitely at the 80%-85% completion level now, with only a handful of major moves (each containing its own array of sub-moves) remaining to get DSG to where we believe it should be.  It should all be starting to make sense now to those of you who have been observing all along, though you'll gain even clearer insight as we push those last few building blocks into place.  The recent "Great Narrowing" of DSG's focus from full-spectrum hobby gaming to just video games, Magic, and Pokemon, explained at length in various articles here, was a prerequisite condition to a broader structure of efficient facility deployments, starting with the one we've built now in Suites 11 and 12.  We've been working on, as I put it in a previous article, "steering the store's cone of influence to a narrower range of things, so we can craft an offering that is increasingly 'no excuses.'"

Before the move from Gilbert to Chandler, we had maxed out a 2400 square foot suite and had our Tempe location also on lease wind-down at just over 3k square feet.  The 2017 lease for Suite 7 was cheaper than both Gilbert and Tempe combined, and also larger than both of them combined.  It seemed like it was a complete win on all fronts.  Instead, we found ourselves out of position.  We had been running a Mario model that suits rural and mid-major areas well, spreading a wealth of categories and play space to cast as wide a net as we could.  While we were busy with steep efficiency challenges in an attempt to be better than a jack of all trades and master of none, in our major metro region, laser-focused smaller stores took leaps forward and proved to be running the better structure.

In fact, the Bahr Haters out there now get to experience the one thing they wanted the least: a DSG with near-zero overhead that can exert tremendous competitive pressure on them through pricing, supply, and our ironclad reputation for doing everything above-board.  Feel free to throw in the towel and close up any time you're ready.  (This is especially sweet after how some of them stoked the rumor mill during our closure suggesting that we were done for.  Yeah, you wish.)

Since the impetus for our big move forward amounted to us essentially seizing an opportunity provided by a fire, I couldn't resist the reference to Queensrÿche's masterpiece "Take Hold of the Flame."  Indeed, fire or no fire, it was time for DSG to make a definitive move, to hard-shift from the store we thought would be pretty good for many in general, to a store we knew we could make excellent for those who wanted what we were focused on doing.  We took hold of the flame; we had nothing to lose, and everything to gain.  And so that you can enjoy it in all its glory, here is the best metal vocal performance ever filmed.

DSG Events Resuming Questions & Answers

Welcome back, everyone.  We've missed so many of you.

There is more to say than a quick social media post will cover, so we're going to have a quick info dump first and then I will address some questions that we know will (or already have) come up.

(For those of you who have never read The Backstage Pass before, it's our business blog related to the comic and hobby game industry.  Most of the articles here are meant to be business-facing, but everyone is welcome to read on if you're curious about the inner workings of DSG and stores like it!)

EVENTS AND OPEN TABLE USE RESUME FRIDAY MAY 28TH

NEW STORE HOURS: OPEN MON-WED 12pm-7pm; OPEN THU-SAT 12pm-10pm

EVENT SCHEDULE:

• Thursdays 6:30pm Draft, 7pm Legacy;
• Fridays 6:30pm Draft, 7pm Modern;
• Saturdays 1pm & 6:30pm Draft, 7pm Standard and Pioneer;
• Pokemon League Saturdays 3pm-6pm;
• Special events will typically pre-empt the Saturday 1pm Draft;
• Booster drafts and constructed sit-and-go events will be available on demand as capacity and clock permit;
• Commander play is available any time the store is open but may have space limits during paid events.

OTHER CHANGES:

Facemasks are no longer required as of May 28th.  The science says once you're in a room for half an hour with someone, you have aerosol saturation and masks no longer help (in either direction).  This means if the tables are open, facemasks become a matter of personal preference rather than business policy.  However facemasks are still permitted and we will not tolerate any harassment of visitors or staff for opting to wear a mask.  Some folks have immunovulnerable family members or other circumstances where they may wish to have every last grain of potential benefit.  We at DSG respect this and we will insist upon this courtesy at all times on our premises.

All sanctioned events require Wizards EventLink registration (for capacity management) and we will waitlist players in-store when events are full on EventLink.  Any EventLink registered players not present at the start time of the event may be dropped in favor of enrolling a player on the waitlist.  Note that this means you must have a smart device or phone to play in sanctioned events.  Wizards's rules, not ours.  You receive pairings and enter your results through your device.  We are new to this too, so bear with us as we all learn together how this stuff works.  Wizards Event Reporter is defunct now and there are no more DCI Numbers.

There is now a venue fee.  Event entry covers the venue fee as it is a component of the entry price.  Admission to tables without entering an event (i.e. Commander open play or Pokemon League) costs $9.99 per day (after tax) OR ONE DSG STAR per day.  (The cost to acquire a DSG Star is essentially $2, as you are awarded one for every $20 in purchases, and ten DSG Stars may be redeemed at any time for 10% off any purchase.)  DSG Stars are our electronic reward system that is automatically maintained by Square, our credit card processor and point-of-sale system.

The venue fee won't go into effect until June 1st.  Holiday weekend fun!  But also a chance for everyone to return and get used to the new event layout and let us shake out any glitches.

Events will get priority seating.  With our seating reduced to 36 (regular) or 48 (high capacity), paid events will be allocated reserved tables, and open play will have capacity limits going into event times.

Event entry fees are changing.  Booster Draft entry is now $19.99 after tax, including venue fee.  Constructed daily event entry is now $9.99 after tax, including venue fee.  Special events will be priced on a case-by-case basis.

Tables are exclusively reserved for Magic, Pokemon, Final Fantasy, and video game play.  We are no longer supporting in-store play of any other games.  Nothing against those games, it's just not part of the DSG business plan moving forward.

REALLY GOOD NEWS STILL TO COME:

We have some awesome special events coming up.  In addition to the official stuff like the Modern Horizons 2 prerelease week, the Chilling Reign take-home prerelease, and the Forgotten Realms prerelease week, we are setting up even more fun events: DSG stowed a lot of surplus product during the pandemic so that we could all play formats that never had a chance for in-store play.  Time Spiral Remastered drafts, Zendikar/Kaldheim/Strixhaven Prerelease sealed deck events, and more!  Stay tuned for scheduling on these great experiences!

QUESTIONS & ANSWERS:

That's all the news for now, so if you learned what you needed to know, you can skip the rest of the article.  Below, I will set out some additional details and some of our rationale for these decisions for those who are interested to know.

Q: Why only three evenings of events every week?

A: We think there needs to be time to ramp back into full operation.  Also, before COVID, events early in the week often did not fire, while events later in the week generally did.  We don't know if that trend will continue, and we will be monitoring event results over the months ahead to get a sense of the player community's mindset.  If we do have to make a change later, it's far easier to add events than to take events away.  And for things like prerelease weeks, we can still run pods earlier in the day on Mondays through Wednesdays, for those players who aren't at work or school.

Q: What's with the venue fee?  I want to hang out and play Commander all day for free!

A: We expect a certain amount of unhappiness on this because a thing that was free is now not free.  However, this is the new reality.  We learned during COVID that the "sea of tables" game store business model is just flat-out worse than the shopping-only model.  The old way is labor-inefficient and space-inefficient and makes it more difficult for us to provide a good customer experience in a multitude of ways.  But we are players too and we always intended to bring back in-store play.  It just can no longer be a promotional expense now.  

This change is also extremely overdue in the tabletop world.  Venue fees are commonplace in e-sports and nobody even thinks about it anymore.

We deliberately crafted a venue fee structure that is effectively free for players who do business regularly with us -- many of our long-time customers have hundreds of DSG Stars on their accounts, and are often event players anyway who will not incur a separate table charge.  By contrast, the venue fee might be cost-prohibitive for players who do not typically transact with us, whether buying or selling, and who do not enter paid events.

Q: Can I use store credit to pay the venue fee rather than earning and spending a DSG Star?

A: Yes, of course!

Q: Can I use store credit to pay event entry and have it still include the venue fee?

A: Yes, of course!

Q: Have you considered a membership plan rather than pay-by-day?

A: We did evaluate this extensively.  We found that, on balance, memberships look like a bad value for most of our players.  The biggest problem is what happens when life gets busy and you don't get to come in very often.  You feel like you had to pay (often on an automatic credit card charge) and didn't get your money's worth out of it.  Feelbads, plain and simple.

And let's face it, there are too many subscriptions dripping each of our credit cards every month.  We don't want to encumber you with yet another recurring bill.

Membership timing also sets up bad incentives, like if you have final exams this week and summer break starting next week, you don't want to start a membership right now because you don't get to really use it until afterward... but what if the night you REALLY need a break is TONIGHT?  Or if you are about to change jobs and you don't have a firm schedule yet, it's a major feel-bad to pay for table time you might end up unable to use.

With the DSG Stars option for venue fees, it's a breeze.  Your DSG Stars don't expire for a year, so you can wait to use them, and the system automatically keeps track.  And you can always just redeem them on purchases if you go a while without needing any for table admission (or you are mainly playing in paid events anyway).  Talk to our players who have been using the ten-DSG-Stars-discount regularly, especially for booster box purchases and pre-orders and such.  It's an ongoing discount that keeps renewing.  It's a reward to everyone who keeps coming back to DSG.  It's probably the single best thing we've ever done in terms of successfully setting up win-win incentives for doing business with us.

From a logistics perspective, using DSG Stars for venue fees works great because we have a star redemption in the system showing who paid for open play table access that day.  So we will be able to verify pretty quickly if someone tried to sneak into the play area.  (Don't do it.  The rope and stanchion is there as a polite way of deterring this.)  We don't have to keep lists or anything.  For busy nights we ordered up a bunch of wristbands we can use, like at a concert.

Q: What if I pay my admission into the 6:30pm draft at 12:01pm?  Do I get table access all day for no additional cost?

A: Yes.  We will watch to see if this presents any issues, but we don't expect it to.

Q: What if the draft then doesn't fire?

A: Your draft admission will roll over to a future draft.  Event admissions are non-refundable (and always have been at most game stores, so this is nothing new).  Seriously, though, we're not jerks.  We want you to get your money's worth.  In the unlikely event drafts continue to come and go without ever launching, we will figure out a make-good transaction for you.

Q: OK then, what if I pay my DSG Star for table access and then decide to enter the draft that night and it does fire.  Do I get my star back?

A: Yes.  Again, you really don't need to worry about these kinds of things, but we've already been asked by people who we discussed the changes with and these sorts of concerns were in their feedback.  We get it, the first worry is whether something basic like this is going to become a problem.  

Like I said, we're not jerks.  We have no need to double-dip, and the venue fee plan is intended as a cost that will only apply once per day per person.  Whatever we might have to do to reconcile that if some weird circumstance comes up, we will take care of it.  We got you, fam.

Q: Did you upgrade the tables?

A: Yes!  We ended up doing it a little differently than planned, though, because we are less than two years from end-of-lease now and we wanted to make sure the tables we bought would work at the prospective locations we are already evaluating.  (Most are very close to where we are located now.)  The long and short of it is that we went with heavier-duty tables that are eight feet long, so that standard capacity at three players per side was comfortable, and max cap at four players per side was no worse than max cap before.  Multiple spots we've surveyed lay out very nicely with eight-footers but would be too crowded with pairs of six-foot tables per section, and not have enough seating with single six-foot tables per section.

The boutique tables we originally planned to bring in didn't look like they were standing up to wear and tear very well in the stores that had them already (in other parts of the country, not local competitors).  Based on feedback from those store owners and their experiences, we decided to double down on ruggedness and let tablecloths and table mats provide the aesthetics.

Q: What's up with the game exclusivity?  No more Dungeons & Dragons?

A: I'm afraid so.  In fact, D&D is already being phased out from DSG, including this week's enormous dice sale on most specialty dice and dice packs, and soon the last of the sourcebooks will be sold off and not restocked.  So 2021 is the end of the line for RPGs at DSG; we've enjoyed having them (and I have been playing since 1st edition and the basic red box) but the pandemic accelerated the market's move toward virtualization, remote play, specialized play venues, and other market segments DSG just isn't in.  Even discounting the books hasn't mattered.  And as a matter of course, we're not supporting gameplay for TCGs we don't carry.  We see the appeal of new hotness like Flesh & Blood and Digimon, but right now we're focused on continuing to improve our Magic and Pokemon offerings, and we keep Final Fantasy TCG around because we have a special relationship with that player community and with the publisher, Square Enix.

Board games are basically gone except for a small remnant that are video-game licensed or related; we moved away from general tabletop in 2020 when it became clear that our Amazon sales of board games etc were far higher than our in-store sales of them would ever be, and labor constraints and publisher channel restrictions made it unfeasible to continue in the category even as a local/online hybrid.  We discontinued miniature wargames in 2019.  We discontinued comics in 2018.

This years-long process is something we internally have been referring to as DSG's "Great Narrowing" and it's something of a controversial move in the industry where diversity of product is promoted as axiomatic.  I believe that approach works in different markets, especially smaller metros and rural areas where high labor efficiency can couple with a broad product spread to create a strong unified hobby offering.  In Phoenix, a tech-heavy major metro with high competitive saturation, I think an independent store is best positioned if it dominates a single category.  In 2022, DSG will be splitting into two companies, one for trading card games and one for video games.  (I have been foreshadowing here on the blog that this split was coming; it's just a matter of timing now, and is likely to be the major shift at end-of-lease as I discussed above in the answer to the table upgrade question.)

Q: Why are you still closed on Sundays?

A: That decision is subject to change later but it has been an enormous quality-of-life improvement for our staff and ownership.  We do like money, so it's possible that as business ramps back up to full power, we will find that being open on Sundays is unavoidable.  And as with the event days in the first question, it's a lot easier to add an open day later than it is to take one away.

Q: What will you do if the venue fee plan doesn't work?

A: That depends on what's "not working" about it.  For business purposes, empty tables during non-event times are preferable to having non-monetized open play taking place.  If we experience significant problems with logistics, enforcement, or other aspects of venue-fee-supported open play, we will probably close the tables except at event times.  As players ourselves, we consider this an undesirable step and we don't want to move in this direction.

Q: Where are you getting your facemask science?

A: I saved this one for last because there's a lot to say here.  But first, credentials.  DSG's managing partner, yours truly, worked for almost a decade at the Arizona Department of Health Services as a senior analyst.  I have extensive familiarity with public health, epidemiology, and health policy administration.  Our decisions throughout COVID since the very earliest days of the pandemic have been close to flawless in terms of reading the data, assessing the news, reading the trends, and making the best decisions for the protection and safety of visitors and staff.  Long story short, we know what we're doing and we stand on our record.

Moreover, the CDC has released guidance within the last week that vaccinated people can cease masking indoors.  We're not going to police peoples' vaccination status, but if you're genuinely worried about catching COVID... well, you should probably get vaccinated.  Just go to CVS, it's call-ahead or even walk-up in most cases now.  I took a chance on a walk-up a few weeks ago and missed an open service window by minutes, and they just had me come back the next morning for the shot.

Small businesses spent the last year getting a great deal of public pushback against facemask requirements, regardless of whether those requirements were imposed by state or local laws or orders, or whether they were put into place by the business owner.  We required facemasks at DSG from May 4, 2020 (the day we were allowed to reopen the doors) to May 27, 2021.  Over a year.  We took a lot of heat for it even though for over 11 months of that time, the policy wasn't even our choice, but was a governor's executive order, and then a City of Chandler municipal order.  For the last few weeks we have continued the mask requirement as a business policy on our own decision, because we follow the science and there was still a non-granular health benefit to being masked with the tables closed and most visitors being in the building only a short time.  The negative response in recent weeks has been significant and reprehensible, including a visitor bullying one of our staff members over the matter.  (If that person returns when I am in the store, they are getting a lifetime ban from DSG.)

So now that the long year of facemasking at DSG is over, we hold everyone who harassed us about facemasks in absolute contempt.  This is a private business on private property; respect our rules or don't come in.  Is that libertarian enough for you?  DSG has been, from the very start, a politics-free entertainment space.  No harassment.  No bullying.  No discrimination.  No proselytizing.  I shouldn't have to say this but I just spent a year having the public prove to me that I guess I do have to say it.  No matter which jersey you wear, park your politics at the door, and then come in and play some games.  Let's get back on track.

For those of you who showed immense support during these last 14 months of uncertainty and upheaval: Thank you.  Thank you so very much.  We see you.  We remember you.  Moving forward, the decisions we make and our efforts to make DSG better, are done with your enjoyment in mind.  Yours specifically.  We specifically want this place to make you as happy as it reasonably can.  We want it to be the place that was worth you going the extra mile to make sure you would get to enjoy again.  Hopefully we will live up to that commitment.  You are awesome.

See you all at DSG!  Shuffle up and draw seven!