Desert Sky Games is approaching the ten-year mark in business, and most processes are approaching the point of being solved by now. However, the market still moves and shifts as it likes, and it's up to us to adapt to that, or not. We think we've adapted in a rather brutal fashion, and in the meanwhile moving forward behind the scenes, skating to where the puck is going to be.
Shortly after the success of Magic's Kamigawa Neon Dynasty release to start the year, we decided to plan our shots with what looked like a saturated release schedule. This was before knowing Unfinity would appear in October, or that Warhammer 40K Commander Decks would delay from August into October also.
We loved the deco-noir motif of Streets of New Capenna and we expected (and got) shard triomes, so we expected ordinary business with that set. Normal ordering volume. In practice, what happened was that the set landed a little on the soft side, but it was within what we could afford and we saw only middling distress from the weaker competitors out there.
Commander Legends: Baldur's Gate (CLB) was something of a wild card at that point. Collector booster boxes of the original Commander Legends set (CL1) skyrocketed in price and remain to date the only source of extended-art foil Jeweled Lotus, Vampiric Tutor, and various other cards. At the same time, the main set would be in print for at least a year and we knew we could come back to it. It made sense to go heavy on CLB if we didn't have anything else to be ready for, or risk missing another CL1 scenario. Stores that were hurting from New Capenna were doubly vulnerable.
Of course, you all know what happened after that. The very next release on deck, July's Double Masters 2022 (product code 2X2), projected as a runaway hit even that far back. For August, the Warhammer decks were fixed (not a booster product) so would be a minor spend in all likelihood, and we have a 10th Anniversary celebration to be ready for as well. We set our sights on Double Masters as our big "play" of the year, long before CLB ever came up for distribution number lock.
So, every store ordered 2X2 obviously, but we suspected most stores did not take our deliberate approach to it. Knowing we wanted to be in and out of CLB quickly, we halved our expected quantities for what ended up being the flop of the decade thus far. Stores around town are, even now, absolutely choking on Baldur's Gate, which landed sparse on power and missed at least one obvious reprint in Dockside Extortionist, which appeared instead in 2X2 where it wasn't needed to sell the set. Meanwhile, we had no particular issue clearing CLB ahead on money, even though our hedge was still not enough, and we do still have quite a bit of excess stock. It will be fine in the long run as the set becomes the Ancient Dragon Lottery for customers, but let me be very clear when I say CLB is the worst-received product in modern Magic history, since at least Global Series Mu Vs Jiang, and the worst-received booster set since Born of the Gods or maybe even Saviors of Kamigawa.
Looking ahead to 2X2 then, in addition to ordering low on CLB, we tapered down our general restock volume and started hoarding cash in advance of what we expected to be a large spend on Double Masters. We wanted to be able to buy absolutely every last box we could. Even after how well things went, I wish I had requested twice as much.
The final secret sauce was not taking pre-orders. Most stores float from release to release on net terms, whereas since last summer's sudden store move settled out, we had managed to normalize cash flow to the point where we could be paying cash up front every time if we had to. Your usual store will take pre-orders to make sure they can cover terms, and if business has been soft enough, they'll pay existing expenses from pre-orders and count on later transactions to cover open terms invoices. Lord knows during the doldrums of 2018, I ended up having to do that a few times. People love Rivals of Ixalan now, but nobody loved it when it first arrived, let me inform you.
Not taking pre-orders also let us avoid the inevitable race-to-cheaper optics war that happens out of the gate before spoilers, where the people willing to give a game store an interest-free loan the soonest, get to lock in low pre-order pricing relative to the set's release demand/market. There isn't much risk to the consumer because if the spoilers suck, they can just cancel the pre-order. The risk to stores is that the set won't be popular or will get overprinted, or on the other side, that the store will give up a bunch of revenue in order to have fast cash up front. Based on the previous Double Masters set's success, we did not expect a bad product, and we didn't need the cash advance.
So there we were, all expenses paid and money ready going into July, and sure enough, the market price of 2X2 climbed to where we could offer best-in-town pricing and STILL make $100+ more per box than we would have at the beginning of pre-orders. There it was, the gold ring we were grabbing for: setting up to make this release as beneficial as possible, using the power of patience. Friday, July 8th set a new store record for daily sales before we even hit the 90-minute mark. We ended up more than doubling the previous record. Then Saturday, July 9th hit the top 5 of all time. Then the following weekend we had two ranked days, an accomplishment that gets harder every time because the threshold to be on the rankings goes up. We have fun plans for that revenue.
Even now as most local competitors have sold out of 2X2 product and are scrambling for fundraising schemes, and even as we enjoy fantastic release-week sales, we sit atop a massive hoard of 2X2 and it's all long since paid for. We will be selling this stuff for months. Longer, if we have our druthers. We will ride the market price all the way up to the moon as we go. Every box and pack we sell will be better than the last. And when the cupboard is dry in the metro, only the behemoths will still have stock: DSG and probably Amazing Discoveries and Play or Draw.
The MTG price hike that goes into effect with Dominaria United in September isn't going to make us blink, and based on the logistical success of our 2X2 play and the colossal labor savings from doing it this way, we are going to come out of the gate for DMU with best-in-town pricing and no pre-order requirement. Plenty of product will be available, just come in and buy what you need. We hope to cause further distress to competitors as local players cancel pre-orders with them (or force discounts) knowing they can get their boxes from DSG for less on prerelease day.
Lest this blog article sound too gloaty, I should really explain the context. For a number of reasons, not the least of which is my autistic personality that is the exact opposite of the gregarious extroversion more ideal for store owners in this industry, DSG has long been the local easy target, the store that gets no benefit of any doubt, no leeway for any mistake, and maximum pressure from any competitive move. It got pretty onerous as time went on, and surely embittered ownership toward certain specific antagonists. One of the lessons you learn in law school is that if you're going to punch someone back, do it hard enough that they will have a difficult time getting back up. We took that lesson to heart throughout these years of scuffles and skirmishes. Rather than simply fighting tit-for-tat, DSG turned inward and changed our position so that we could win outright, sustainably, on the exact aspects of business where our adversaries thought they could most easily crucify us, and were themselves the most vulnerable to reprisal. This is not an unprovoked or unilateral attack by us in the great ongoing war of Business. Rather, this is reprisal, a delivery of comeuppance. It is a sort of justice. They threw the first punch, but we intend to throw the last.
Probably the best part of all this, is that most of our current business initiatives are not externally visible, and are the greater part of what's really going on. Our entire 2X2/DMU operational shift was just one of many things, and yet it has been so visible and so successful and so effective that I can even state right here in print that it is not that important in the grand scheme of things, and it doesn't matter! Competitors cannot ignore it in the analytical calculus regardless! That is OUTSTANDING strategic positioning. It's a play-action pass on first-and-goal from the 1-yard line. The defense cannot play both the run and the pass effectively, and is overwhelmingly likely to be scored upon.
Thus derives this articles title, Double Agent: our hat tip to the wonderful and profitable Double Masters, but also to how we've managed to set this up to achieve both goals of succeeding on its face, and disguising from competitors most of what we are really doing. We wholeheartedly recommend the Rush song by the same name for your listening enjoyment.
