There was an error in this gadget

Monday, June 26, 2017

Avoiding Catastrophic Failure In Your Absence

It seems like only yestermonth that I observed how badly I needed a vacation, and I finally took one last week, driving with the family out to the balmy climes of Anaheim for a day of merriment at Disneyland California Adventure.  The girls had been to the main Disneyland Park five years ago, and Greggles had never been, so we chose the alternate and enjoyed a day of Radiator Springs Racers, California Screamin', Ariel's Undersea Aquarium, and the rest.

As I predicted in that earlier article, having Griffin on hand to cover eventualities worked perfectly; he was available to write checks for overlimit buys where the seller didn't have PayPal, and he ended up not having to do so.  He was available in case of critical customer service failure, and we had none.  No physical plant problems came up, no serious supply outages occurred, and only two special orders failed to get put in, and I got that done when I returned.  Our two store managers, Chris and Jake, largely had continuity handled, and my online store manager, Tanner, proceeded virtually unchanged from a normal work week.  The main thing is to make sure the managers and staff know the fallback plans, even if they are not invoked.  Confidence that you know what you're doing goes a long way toward ensuring strong execution.

Business continuity is a dry subject that most store owners don't want to spend any time on.  I love dry subjects that everyone hates, so here we go.

Internet outages
Every store uses internet connectivity for at least its credit card processing, and often uses it for all TCG pricing on both purchases and sales.  An instance of the internet going down is no joke.  There must always be a backup plan other than "stop making money."  Fortunately, mobile hotspots are available from a variety of carriers, and depending on the store's scale, it may justify having its own service for these.

Credit card processor outages
There is no real excuse for this in a world where both Square and PayPal Here exist.  Whichever one is down, use the other.  I used to use Chase Paymentech until I learned that their chargeback protection was awful.  I had iPayment for a while and the service is both good and cheap, but you are forced to use antiquated equipment, basically the cheapest possible Ingenico chip readers.  That is my in-store backup system now, relegating the PayPal Here chip reader to third place.  Fortunately, it can use the same iPads as our Square terminals.

Water outages
There's no real answer to this one other than closing the restrooms until your municipal water provider gives the all-clear, but be prepared to do so and have a process in place so your employees know how to do it when an owner is not there.

Power outages
There's not much you can do about this and for about ten months out of the year there is not anything my stores can do about it, due to the desert climate.  If the power goes out for more than a few minutes, the store must close.  Have a process in place for your crew to know the drill.

Crime situations
Fortunately, most people understand how to call the police, and you should impress upon your staff that you approve of them doing this.  Have the local police general response line posted where your staff can see it.  You don't want them calling 9-1-1 unless there is an actual life-threatening emergency.  This will require your followup when you get back, but a competent manager can generally interact as needed with the police in situations like this, and will get better as more such occurrences take place.

Staff mutiny/Store fire/Building safety incident/Natural disaster/etc
Tell your staff to close on up until you get back.  There are things you simply can't have them handle without you.  But these should be outlier events that don't happen often, perhaps ever.  And you should have insurance that covers employee misconduct, not that you hope ever to need it.

Those are some examples of things that threaten your ability to keep doing business.  There are other issues that can keep you from doing business well.  Those also need to be addressed.

Cash shortages
Prepare before you leave so that someone in your stead can run to the bank or else there is enough currency in your safe to continue normal operations.  This is especially critical if you do a lot of buying from the public.

Staff no-shows
This generally falls within your manager's purview.  If you don't have a manager separate from yourself, you probably aren't taking a vacation yet.  Or if you are, you don't really have business continuity independent of yourself.  This is also an empowering authority for your manager, because it is a very simple issue, very well understood in any industry, and gives your manager a chance to follow the disciplinary process you wrote into your employee manual, sharpening his or her management chops.  You did write an employee manual, didn't you?

Supply outages
Staples charges like eight times more than U-Line for toner drums or receipt paper rolls, so take care of your supply situation as best you can while you are still in town, and if you end up out of a mission-critical supply, just accept that your manager will have to take cash from the safe, go to the store, buy the thing at a not-good price, and leave the receipt for you, your administrator, or your accountant to add to the regret ledger.  Live and learn.

Credit card interruptions
You're on vacation on the Island of Saint-Marie, 3270 miles away from your store, and your manager messages you that he can't charge postage to your store AMEX because it was flagged as stolen after being swiped a bunch of times... on the Island of Saint-Marie, 3270 miles away from your store.  You check your wallet... and your store AMEX isn't there.  Uh-oh.  Or even if it is there because it's your own AMEX you happen to use for the business, not recommended but many stores still do this, and it was flagged as a security precaution, you still have a problem.  This is one of those situations where you need a multi-pronged continuity plan in place.  Your store should have multiple credit card options even if you don't use them all, and separate accounts for the business and your personal use are a must in any case.  When I fly somewhere I don't even take my keys with me.  For the store, prepare cash, PayPal, checks, and if possible even alternate means of paying for business operations in your stead.  For example, we can ship from eBay, from Crystal Commerce (Endicia Postage), from PayPal Ship Now, or at the end of it all someone can go to the post office and get that parcel out on time.  Most of your distributors should be getting paid by ACH, so as long as you have a way of managing your banking remotely, that should hopefully suffice.  Have a backup for your backups and a way to put any funds where you need them, and make sure you contact your credit card issuer before traveling.

Overlimit buys
This won't apply to all of you, but if your attorney checks into it, it may apply to more of you than you think.  My municipality limits cash buy totals before triggering pawn sequestraton and reporting requirements, and many other localities have similar "know your customer"-style laws, regulations, or ordinances.  In my case, paying with an audit trail (business check or PayPal) can be done without limit.  Without a limit other than your available balance, obviously, which if you leave town you want to make sure is as high as possible.  My staff knows they can always dip into PayPal for an overlimit buy, and I make sure another owner is available in case a check is the only way to proceed.  I want those buys.  Buys are crucial to running a healthy business.  My staff knows they are at liberty to spend every dime on the premises if we are getting the right merch for the right price.  We just have to follow the legal requirements.

Product outages
Ours is an industry with stockouts every day, but there are outages (K-Wings, which nobody can get right now), and there are outages (the store ran out of Amonkhet boosters).  Planning ahead should stave off all but the most unexpected of these situations.  You do not turn away the customer with cash in hand who wants to buy you out of matte black Dragon Shields.  But it is an economic reality that stores cannot always stock ultra-deep on everything.  Have a plan ready.  In my case, my staff uses a shared cloud notes app to jot down anything we need ordered, and any critical orders in detail. My manager has the authority to put in orders from some of my suppliers, and they check with me before firing off, but even that might be more protection than we need.  In a pinch, another owner could also do this.  End of the day if your plan is simply that your vacation gets interrupted for the length of a phone call or email to your distributor rep, and they send the goods.  If it's Friday morning and you just ran out of Magic boosters going into the weekend, congratulations, you suck.

Obviously, the foregoing is not a comprehensive list of issues that can interrupt business continuity or impede business effectiveness, but it should serve as an ideal primer and something that every owner can look at and be sure they've covered.

I am far from perfect, and in no way should this article be construed as braggadocio.  At one point or another, I have learned the lesson of most of these problems the hard way.  You'll end up doing the same at least once or twice, and hopefully your business survives to open another day without such problems.  Fool me once, shame on you.  Fool me twice, won't get fooled again.

Tuesday, June 20, 2017

Curves and Lines of Grand Designs

So, E3 (the Electronic Entertainment Expo) came and went for 2017. The announcement that won the show? It depends whom you ask. But the company that won the industry? Right now I have to go with Microsoft, even though their current mainline console, the Xbox One, is not even winning the current generation. I think Microsoft has won console video games by ending the stair-step progression of hardware generations, leaving only software (gaming platform/OS) generations remaining relevant -- and that's where they are years ahead of Sony and Nintendo and iterating further.

Microsoft came into E3 aggressively with the Xbox One X, formerly known as "Project Scorpio," and a lineup of pretty decent looking titles, in particular the "MechaDestiny" shooter Anthem, and my own highlight of the show, Ori and the Will of the Wisps, complete with live accompaniment on piano by soundtrack composer Gareth Coker. Sony mostly phoned it in with a few high-profile games everyone will have forgotten about within a month of release, but they aren't exactly playing defense these days, so they had that luxury. Nintendo made a splash with new Mario, new Pokemon, new Splatoon, new Metroid, another new Metroid... plus a bevy of sweeteners to build momentum behind the Switch. And I was happy to see Hyperkin announce an HD clone player for Atari 2600 cartridges.

Right after the Ori trailer concluded and we got to wipe away our tears of joy and catharsis, Microsoft Xbox team chief Phil Spencer made an announcement that got big cheers -- and, if my guess is right, was worth even bigger cheers from even more people once we recognize its full meaning and context. The announcement was that the Xbox Compatibility Program would expand to support the original Xbox from 2001. The Program currently offers Xbox One and Windows 10 gameplay of Xbox 360 titles, with just under 400 titles supported at the time of this writing, over a third of the system's worldwide catalog (so far). There are likely always going to be a few corner cases from past systems that won't emulate properly, especially if they require special controllers, and there are games where the rights have expired out and they cannot be licensed forward. But it seems likely that essentially all past Xbox software will at some point soon play on the Xbox One and Windows 10, and that's where things get interesting.

Spencer has been banging the drum for a while now on the Microsoft gaming platform software, which is now branded as Xbox for both the X-Bone and Windows 10. The X-Bone, in essence, is really just a turn-key Windows 10 PC within the context of running games and official apps. The software supports "Play Anywhere," meaning if you own a title on the X-Bone or Windows 10 platforms, you can play via stream from one to the other. It's not seamless portability of login yet; there's some hoop jumping to do with e.g. disc games that I don't think they can solve in this generation, but it's remarkable that they've essentially there. Cross-play for online games is up and running as well.

Microsoft caught some flack for games like Anthem and Ori being "Xbox One and Windows 10 exclusives," as though that meant that the X-Bone could be ignored by gamers and they could just play on their PCs. What they failed to see in the big picture is that Microsoft has no problem with that now. It doesn't matter. The PC is the X-Bone. The X-Bone is the PC. Commodity hardware is just whatever rig you need to run the software. The software is the ballgame. The Xbox unified platform is about the software. New hardware will show up periodically but it's just spec bumps like the S and X. They don't really care how you play the games, as long as you engage.
And now, the Xbox unified platform is (almost) all Xbox games ever. Or it will be once they've caught it up, anyway. If you've ever bought an Xbox game, setting aside those corner cases, you can sign in on whatever generation of box you happen to own and just play it. From now on. Without needing to own and maintain legacy devices.

That's huge. Like I said, they've been intimating this for a while now, not exactly hiding the strategy, just giving us high-altitude generalities about where they were going here, but only in the last year or so have we seen enough that we really believe it, and recognize it taking shape.

And yes, the Playstation Network has Playstation Now, letting you subscribe to play previous-generation Playstation games, but it's not the same pitch. They're not promising extensive backward compatibility with the previous generation, and they're not promising software continuity moving forward across devices and generations. It's basically a rental. It's Netflix. The PSN functionally is somewhere short of the new Xbox scheme but ahead of the horribly shortsighted Nintendo Virtual Console that is not continuous between the DS series and the Wii series. Bought Mario 64 for the Wii VC and now you have a 3DS? Too bad! Buy it again on a cartridge! To credit Nintendo, at least the Wii U had near-perfect support for Wii games, and the Wii near-perfect support for Gamecube games, natively. Nintendo gave gamers one step worth of backward compatibility gratis. And with the Switch we're seeing a revamped scheme that looks promising. But Microsoft is still ahead in this game because they've been iterating on Xbox Live for 15 years now.

Look, Playstation 4 is winning this console generation. None of what I am saying suggests otherwise. Microsoft pissed everyone off in the X-Bone pre-release cycle with their "no used games" misfire and the $100 Kinect forced bundle and all that, which paradoxically is in line with what the Xbox software platform is doing now, it's just not what the public was ready to be told at that juncture. The 360 had beaten the PS3 but Sony took back the momentum from that point forward. The Japanese market embraces Playstation first anyway. All the major Japanese games not made by or for Nintendo are made with the PS4 in mind. The fighting game and JRPG genres have set up camp with Sony now and aren't budging.

But what Microsoft has done here is a forward-thinking process that I have to admit is impressive to my core and wildly exciting to me as a gamer, even as it poses an existential threat to my business. And I think that despite letting this generation get away, MS is setting the stage to be an unstoppable force in the future, because again, they don't need hardware generations anymore. New hardware is just a spec bump like the S and X when it happens. The key to the platform is software, the gaming OS, and the software is being made immortal.

For gamers, it's all upside, because it allows anyone on the unified platform to move past the physical properties of previous hardware now. Technology marches on and interoperability changes. Right now, people are ditching 1080p and moving to 4K UHD TVs. Not all that quickly, because a decent 1080p TV is cheap and tends to last a while. But that's the direction the market is going. And with each successive iteration in televisions, we're seeing more and more legacy connectors deprecated. S-Video is basically gone now. DVI is long gone. Composite video is now a shared port with the green connector on YUV component, if even that: I saw this year's TVs at Costco and the component connectors have been deprecated to a break-out box with a stepped connector. These TVs even do away with the customary VGA port. It's all HDMI all the time, with USB ports for flash drives and to power peripherals, and high-end models offering uncompressed digital audio outs. That's just in hardware; image processing and upscaling is built-in as cost-effectively as they can make it, and you can't spell "upscaling" without "LAG," which is what you get when you plug an old game system into a new TV that doesn't have a non-processing Game Mode setting. Bottom line, to play video games on a modern display, they have to output that display's native video signal.

Microsoft's timing has more to do with where their particular console project began than the state of the technology, but it just so happens that the Xbox 2001, Playstation 2, Gamecube, and Dreamcast are just now on the cusp of becoming difficult to connect and play on those modern displays. The X2K1 does have component out with the proper cable, but that's the next connector set starting to disappear from TVs. The PS2 maxes out with component as well, for now. The best connector for Dreamcast is its native VGA outlet, which some TVs still have but 704x480 looks like garbage on a 4k screen. The Gamecube Component Cable is an absurd rarity commanding prices over $250 on the secondary market, so it's a good thing the modders finally figured out how to install an HDMI output or we'd be stuck watching the 'Cube die with composite and S-video. It's true that you can just use a white Wii with component, but not all GCN games are compatible, and the Gameboy Player is not compatible, and so on and so forth and oh my God I'm cross-eyed. The Switch is supposed to be adding GCN games to its Virtual Console, so assuming Nintendo ever unifies the VC and eternalizes it like Microsoft is doing, we'll be in an interesting and encouraging situation there. But right now we're not there, I love Nintendo but their gaming software platform is five years behind Microsoft's.

Moving backward from that generation, it's basically a near-complete break at this point. The Playstation 1, Saturn, and Nintendo 64 are all but unplayable on modern displays, when they can connect via composite video at all. Maybe money is no object and you buy an XRGB Framemeister and connect them that way. Maybe you go with my plan and find a PVM RGB monitor and play in 240p as the console was originally designed to work. In either case you're not playing natively on a modern display. Oh, and this was the last generation with the old phosphor-triggered light guns, so you're not playing Virtua Cop, House of the Dead, Time Crisis, or, well, Duck Hunt on your modern display at all. Not unless you're using a new console with accelerometer controllers, e.g. Wiimotes, as your "gun" for downloadable classic games.

Before that generation? Now you're in full-on retro territory if you're an autistic purist like me, placing flux to solder and physically modifying the hardware to get the most out of it, or else you're doing the cost-effective thing and playing on a nice cheap Retron clone console, or you're buying the games on Xbox Live Arcade, PSN, or one of the Nintendo VCs, or you managed to find a NES Classic for less than half a grand, or else you're emulating and you're a dirty, filthy pirate, matey. Seriously though, no judgment from me on that, because there's some stuff you'll just never be able to play any other way, and emulation comes with compromises purists abhor.

What the Xbox unified platform is promising is so much simpler and more straightforward, and takes the equipment out of the way and just makes it where you get to play the games. And that's the value add I've been touting for Apple for years, the computer just disappears and it's just the user and what they're creating or enjoying. We also get to avoid the indecent spectacle of being in the year 2026 and having a craving for 16-bit RPG time and knowing there isn't a Genesis available for love or money or a display that you could connect a Genesis to anyway, and our ISP has blocked torrents so emulation is out, and so we're trying to get an old Xbox 360 to work so we can load up Live Arcade and find our purchase license for Phantasy Star II and give it a whirl. Instead, we can just turn on our Xbox Seven Q and it should be right there on the dashboard, as though it hadn't been 20 years since we bought it.

The business aspect is where there is some downside for specialty retailers like me, and I don't expect or require any sympathy on this because I knew this day would eventually come and I plan to make hay while the sun shines. Under the New Xbox Ecosystem, physical software media is in its last throes of being a required element. Right now they distribute blu-rays because it's a reasonably cheap and non-cumbersome way to transfer 45 gigs of data to an end user and there is some aesthetic/nostalgic desire for physical copies of games. But the two platforms growing the most, iOS and Android, have *always* been digital delivery only. So we can see what's coming and the necessity of a disc is an impediment now, taking us out of immersion and forcing us to move a plastic donut so we can play a game rather than just pressing the button.

And all that stuff eventually puts me out of business in at least the video game category. It's fine though. The goods will still circulate for a while yet, with millions upon millions of carts and discs and systems still out there. Price and access and nostalgia and purism and the collecting urge all still exist. I'll have plenty of time to wind down the category. But while I'm doing that, I think a lot of people will be playing games on their X-Bone/PC, whether that's instead of or in addition to a PS4 and Switch. And next go-round? If I'm right, Microsoft won't have to stair-step to it again, which means neither will we. It's just... already there. Every now and then we just refresh our receive-o-tron box to whichever iteration they're currently stocking.

Tuesday, June 13, 2017

Melodies of 1983 (I Said I'm Full)

It's difficult to get a true sense of the glut of product we're seeing in the hobby tabletop space right now, because even a diversified store only sees a sliver of it at any one time.  There is simply so much of it that attempting to sell any new title is like pushing plates of steak and lobster at diners who are already long since finished and have pushed back their chairs from the table.
Last year, 3,600 new board game titles were released.  Almost ten per day, though a third or so of that figure was clumped around the Essen convention in October.  And that's just boxed standalone games, as it were, and doesn't take into account other tabletop categories: Games Workshop releases new Warhammer product weekly; other miniatures product systems range anywhere from monthly to quarterly for the most part; and oh yeah, ever heard of trading card games?  On top of all that, accessories.  Sleeves, dice, playmats, and so on.  The sheer magnitude of product is far more than even the busiest and highest-throughput chain of store could ever possibly ingest.

So, there has been a glut like this in games before, and the result wasn't pretty.  The 1983 video game crash brought down once-mammoth companies Atari and Coleco, sent Mattel packing out of the category, and obliterated everyone smaller from publisher to retailer.  For a few years, home computers like the Commodore 64 were the only bastion of video games until Nintendo brought the Famicom westward and launched the Nintendo Entertainment System, with careful control of title counts authorized to market.

The bad news is that some key indicia from the 1983 crash are evident in 2017 for tabletop games.  The good news is that the biggest problem in 1983 isn't a problem today.

Video games were big business in 1982, breaking records upon records, and everybody wanted in on the action.  By 1983, companies like Quaker Oats and Purina that had no business publishing video games took any code they could come up with and blasted it into a ROM cartridge headed for store shelves.  The quality of titles fell off a cliff and the public was quickly turned off to console video games.  As garbageware titles failed to sell, toy stores and other retailers sought to return the merchandise, only to find that smaller publishers like Games By Apollo and U.S. Games didn't have any cash to pay back.  They and other publishers folded, and retailers had no choice but to dump that product, which in the pre-Amazon pre-eBay era of the early 1980s meant bargain bins so aggressive you'd think the prices had to be a mistake.  Forty-dollar titles were marked down to five bucks.  It was a bloodbath.  I was there.  This wasn't just a history article research discovery for me.  I remember being in grade school and buying up $5 carts by the bucketload, willing to take my chances on game quality.  Anyway, once much of the product base was discounted into oblivion, it became essentially impossible to release new product at full price onto those same store shelves, so the flow of product trickled to a halt.

Does any of that ring familiar?  The dumping cycle today is augmented six ways from Sunday by vastly improved retail infrastructure, both brick-and-mortar and e-commerce.  But it's fundamentally the same process that we're seeing happening.  Seventy-plus new titles every week, and if any from among that onslaught isn't a lightning hit right out of the gate on release, cash-pinched stores need to turn that merch now now now and the online dumping begins with fervor.  Once the pricebots have caught up to the dumpers, it becomes trivially easy for a player to find the game for cost or less.  It then becomes a difficult prospect for a more responsible retailer to charge MSRP for the game, so the retailer curtails ordering.  This becomes more and more true at higher price points where the discount delta is greater.  And as has been discussed here and elsewhere at length, even at MSRP, margins are not great.  Nobody is getting rich off tabletop COGS ratios.  As retailers curtail ordering, distributors have floor to clear and have to dump product through backchannels or in bulk deals to "Loot Crate" style reprocessors.  This further obliterates the market value of the brands being liquidated, and slams the door on any realistic chance of a title's recovery.

The good news is that the most crucial problem of 1983, low game quality, is only a fringe issue in 2017, and mostly only for the underbelly portion of crowdfunding.  For the most part, right now, tabletop games are the best they've ever been.  Gatekeepers are doing a splendid job of keeping their particular gates.  Game design is wonderful at the big publishing houses, and the dreamers can still publish with crowdfunding and catch lightning in a bottle if they don't botch the execution too badly.  Anecdata corroborates: I've learned to play half a dozen new games this month alone and every single one of them was fun, well designed, had good production value, and would probably have been a hit title if it had released into the doldrums of 2007.  But today?  They will be lucky to get noticed, and fortunate to turn a profit for publisher and retailer alike.  At least they don't suck, so if they do get noticed, it is quite possible for them to become healthy evergreens, or at least deciduous enough to turn for a while.

Product quality is mostly up, and yet we're still seeing some worrisome behavior that threatens to take our industry down a road whose destination we've seen all too clearly, and it ain't pretty.  By the time this article sees print, we should be two days into Wizards of the Coast's Announcement Week for the 25th Anniversary of Magic: the Gathering, the industry's flagship product.  Without having any inside information I am sure the new products are going to look great and I'm sure I am going to relish getting my hands on every one of them.  WOTC has been on a tremendous roll putting out awesome products one by two by three, some of the finest content they've ever made in this past quarter-century of business.  And yet we see Magic get dumped because an ocean of morons don't know how to run a retail business and a bunch of speculators are doing their best on the side to defecate all over the industry so they can buy in short.

So, what's the answer?  I can't realistically tell a publisher to take half their best ideas and just put them on ice until after the industry crashes.  That presupposes both an industry crash and the likelihood that it will be worth putting out class-A product in the wake of such a crash, feeding into a recovery where the best titles might not earn as much as the bottom chum does now.  Still, there has to be a cognizable threshold at which even a good game doesn't get added to the 3,599 already ledgered up this year simply due to the sheer odds that even if the game is utterly delightful, its passage might go unnoticed, drowned out in the static of so much other signal.

Other retailers have suggested that publishers might be better advised right now to narrow their offerings and go deeper with each big title.  There's some nuance there versus my suggestion in the above paragraph.  To wit, rather than putting new titles on ice indefinitely, maybe put them on ice definitely -- line things up so you know what your release schedule contingencies will be, so you know what's in the on-deck circle in case a major release tanks, and you know what can simmer a little longer if you want to give breathing room to a title that's punching above its weight class.  I'm not going to expound on this suggestion too much because I give credit where credit is due that most publishers, and especially most major ones, have talented staff working for them who already understand this situation better than me.  I am confident they have thought about these things.

All these signs, these shades of 1983, point to a contraction cycle at the very least, and with product quality where it is, hopefully a "crash" as such can be avoided.  But that correction should help thin the herd and raise the quality of everything that's left, from product to publishers to distributors to retailers, and ultimately improve the gameplay experience on the tabletop.  Pound-for-pound, everyone should get to enjoy games more after the tremors die down.

There will still be problems.  Good titles will continue to arrive and sometimes they will be dumped.  But as we've seen in recent weeks and months, industry stalwarts are starting to take steps to remove bad actors from the equation to the extent possible.  I am encouraged by these developments.  In the longer run, my plan is to hunker down, survive the storm winds, and be ready to stock my shelves with the lean beef that I know my hungry player base wants.

Tuesday, June 6, 2017

Thoughts, Part 8

The last few weeks have been a real experience in the trade.  I needed a vacation before; now I need a sabbatical.  And that ain't coming, so I guess I'll settle for continuing to see singles sales grow.

May was soft overall, expectedly so.  In the absence of a big-time release, like a Masters series set for Magic,  May is not generally going to be a high-performing month.  Students have finals and then they all go do other things to kick off the summer.  We saw a pretty big sales and attendance resurgence to start off June, so that follows the expected pattern.

Part of May that was soft but didn't have to be soft was our Phoenix Comicon sales.  With a drop of over 50% in gross despite a deeper product load, we saw no single product category underpunch its weight, but instead a lessening of overall volume.  After some numbnut smuggled an arsenal of real guns right past security, fortunately ending up arrested, the PCC leadership promptly overreacted by banning fake guns and weapons (cosplay props) for the remainder of the show.  The resulting security logjam kept people out of the convention for a healthy chunk of Friday and slowed things down for Saturday.  In short, PCC management ruined the party, and spending tanked accordingly.  Steampunkers stayed home, the 501st geared down, and even banana-wielding Deadpools were too late to lift spirits.

One good way to analyze the effect the prop ban was to look at the volume drop day-by-day.  Thursday was almost unaffected and to get into the event that night meant you had already pre-purchased an all-weekend pass.  The attendance decision happened before the gun incident ever did.  Friday was down a lot, and Saturday was a disaster, with both being the key days that casual fans will buy a one-day pass to attend.  In the wake of the prop ban and news of three-hour waits to get in, casual fans stayed home.  Sunday bounced back, the second-least-drop from last year, because the mix of all-event passes is higher and the shorter hours and fewer guest appearances tend to result in a smaller casual day-pass crowd.  So it's not difficult to use pure sales volume and an understanding of who attends and when to attach causality to the prop ban as the big blunder.

The greater danger of undercutting cosplay with a prop ban or anything else that affects that community more than others is that cosplay has been an enormous factor driving the growth of comics and comic conventions today.  It has been a jackpot benefit on virtually every level both economic and social.  It has bolstered sales of both core content and ancillary products, it has drawn women in droves to the hobby, and it has proven broad enough to reach everything from mature to family demographics, from indie to mass-market, and so on.  The "new normal" is held up by an artificial floor created by the engagement of the cosplay community, even though they don't typically buy the costumes themselves from the comic and hobby trade retail tier due to the cosplay emphasis on homemade gear.  If frustrated and marginalized swaths of cosplayers throw up their hands and move on, leaving the comic and hobby trade for other pursuits, look out below.

Uncredited image from Reddit

I was happy to see that hot board games still behave as hot products generally, despite the price sensitivity of my local market.  We've seen good sales of A Feast for Odin and The Captain is Dead, both of which have small numbers still in stock.  We easily sold out of our initial shipment of Dark Souls, without sacrificing a penny on the price tag.  There haven't been any recent shipments of other grabbers like Terraforming Mars, Gloomhaven, or Scythe, but on at least a shallow reload I have confidence they'll clear again.  It makes me wonder if the perverse incentive of the publisher to create scarcity, a la Nintendo, is actually something they can monetize out over several print runs before the dumping commences.  In a vacuum the publisher wants to ship X-1 units where X is the total demand that will ever accrue to the title.  Leave a perpetual micron of demand unmet out there, and get close to 100% efficient ROI.  But with market behavior this year can they do that?  The nuclear-demanded Final Fantasy TCG appears finally to have cliffed; Opus II is available at retail, and the reprint of Opus I that just landed has been soft enough that the eBayers are dumping it already.  And that's on a very short-margin item.  I'm dismayed to see this because Final Fantasy TCG has literally the highest production value of any trading-card-game product thus far.

Speaking of board games but also of miniatures and card games, the Asmodee North America group just announced exclusive distribution through Alliance Game Distributors.  This includes Fantasy Flight Games (all Star Wars, all Game of Thrones, Netrunner, Runewars, Arkham Horror, etc); Days of Wonder (Ticket to Ride, Small World); Z-Man Games (Pandemic, Shadow Hunters); Plaid Hat Games (Dead of Winter); Catan Studios; and some other small subsidiary imprints.  Asmodee, a subdivision of the megacorporation Eurazeo, represents probably a quarter to a third of the board game category right now in the hobby trade.  So this is a pretty big deal.  Rumor has it that Gamestop pushed for this as they already source through Alliance's parent company Diamond Comic Distributors for pop culture items and want to make a harder push into the analog side of games.

Alliance gets a lot of hate from the retail tier because they've had some prominent exclusives past and present, currently all of Mayfair and Da Vinci games plus Wizkids' HeroClix product line, and retailers who have run into indifferent sales reps or warehouse shipping issues felt frustrated that they couldn't take their business to an alternative vendor.  I've been on both sides of that fence, since my first Alliance rep from 2012 was difficult to work with, so I sympathize with retailers who have faced these issues.  My current Alliance rep is outstanding, and perhaps that will become more the norm if the company gets a lot of business and revenue growth out of the Asmodee exclusive.  And I hope that's the case and that retailers get used to it because I'm here to tell you that this won't be the last time we see a convergence back toward exclusive channel management.  If I had to place a bet on the next company to tighten the cords, it would be either Pokemon USA or Konami.

The reality is, there are bad actors in the comic and hobby trade these days.  There are resellers who are content to devalue a product into the terlet bowl as long as they can clear a quick single-digit margin basically acting as a freight forwarder for it.  And for as long as any product is multiply distributed, there is no practical way for a publisher to prevent this.  Any attempt to cut off a source simply results in the reseller pointing to another source.  With exclusivity, a publisher knows for a mortal fact exactly where a reseller got the goods.  Any publisher that is playing the long game of building a resilient brand and wanting their MSRP to be less of a suggestion and more of a consensus is starting to look in this direction now and see if they can take greater control over their product movement.  Apple did it, Nintendo did it, PING did it, LEGO did it, and now you're seeing it happen more and more in the hobby trade, with Asmodee's move following CMON Inc's consolidation to three distributors, Games Workshop's new trade terms, AEG's brand protection restrictions, and even smaller-scale early access for brick-and-mortar for products by the likes of Iello and Renegade.  Existing brand reinforcement by e.g. Wizkids, Mayfair, and Steamforged has some proven effectiveness at this point.

How hard is it really for publishers to control their product flow?  I've been asked this.  It's more difficult that it looks at first glance.  There are thirteen mainline distributors in North America and enough category specialist distributors in addition that we can't even keep track of them all.  That's a hell of a lot of sourcing that doesn't even include manufacturer direct purchases like we get from Wizards of the Coast, Games Workshop, BCW, USAopoly, Chessex, Broken Egg, Offworld Designs, and like such.

The mainline distributors, alphabetically:

  1. ACD
  2. Aladdin
  3. Alliance
  4. Devir Americas
  5. Diamond Comic Distributors
  6. Grosvenor
  7. GTS Distribution (merger of Gamus and Talkin' Sports)
  8. Lion Rampant
  9. Mad Al Distribution
  10. Magazine Exchange
  11. PHD
  12. Southern Hobby
  13. Universal


The category-specialist distributors, partial list:

  • Brybelly (publisher drop-shipping of cards, games, dice, toys)
  • E-Figures (miniatures)
  • Entertainment Earth (licensed pop culture merch, figures and toys)
  • Everest (specialty trade access to mass market product lines)
  • Golden Distribution (miniatures)
  • Hyperkin (video game accessories)
  • Ingram Group (books, games, gifts, video games)
  • Innex Inc. (video game accessories and licensed merch)
  • Japan Video Games (actually not a distributor of video games, mostly figures and toys)
  • Just Funky (licensed pop culture merch)
  • Synnex / Jack of All Games (video games and accessories)
  • Top Trenz (apparel and gifts)
  • Woodland Scenics (terrain elements, modeling supplies)


There are a few other online resellers who call themselves "distribution" or "wholesale" but they aren't really; they are just retailers who have succeeded in scaling up to that, such as Potomac Distribution.  A lot of your larger comic and hobby stores will have accounts with most or all of these sources, whether they are using them or not.  You just never know what you might need in a pinch.  I am one of those hermits who doesn't like to keep an account open unless I am using it.

Need Pokemon cards?  All thirteen mainline distributors have them and some of the others as well.  Need Magic cards?  Most of the mainline distributors have them; I think Diamond fulfills via Alliance but it's close enough.  Need some common board game like Dominion?  It might be easier to list the category guys who don't carry it, as most of the sources above do carry it.

So yeah, for most products, once they are shotgunned out there into channels, that genie is out of the bottle and whatever happens is whatever the market decides is going to happen.  With a product that isn't red-hot-omg-instant-sellout, a lot of the time that means the product gets dumped.  A first wave of retailers will buy it, not see quick turns, and clearance it out.  Wholesale orders slow down or stop, and now the distributors above need to clear some warehouse floors so they make deals with bigger retailers, aggregators like Loot Crate, or just burn it up via Amazon.  Everyone wants this product gone-gone-gone and turned back into money, even back into less money.  It quickly becomes worthless.  No publisher wants their game whose second printing is even now floating out of Shenzhen harbor to be worthless on arrival.  It doesn't take a genius to see why crowdfunding became a popular, if sometimes misused, tool for many publishers.  They don't have the clout that Asmodee has in being able to call these shots.

I was going to discuss another topic in today's "Thoughts" but after getting deeper into the foregoing than I expected, I think I'll hold that material for a future article.  Have a great week everybody!

Monday, May 29, 2017

Ocean Breeze Soap Will Get You Clean

In a classic scene from The Muppets Take Manhattan, Kermit the Frog stumbles into a frog-operated advertising bureau struggling to come up with a new product slogan.  He tells them his name is Phil the Frog, and they introduce themselves as Bill the Frog, Gil the Frog, and Jill the Frog.


BILL: We advertise for Ocean Breeze Soap.
KERMIT: I've never heard of it.
FROGS: We know!
GIL: Our jobs are on the line.
JILL: We need a new slogan!
BILL: How about, "Ocean Breeze Soap: For People Who Don't Want to Stink?"
JILL: Be frank, Phil.
KERMIT: I don't like it.
GIL: You don't?
JILL: Oh no!
BILL: How about, "Ocean Breeze Soap: It's Just Like Taking an Ocean Cruise, Only There's No Boat, and You Don't Actually Go Anywhere?"
KERMIT: Seems a bit long.
GIL: Oh!
JILL: Ohhhh....
KERMIT: Have you tried something simple like, "Ocean Breeze Soap Will Get You Clean?"
(the FROGS are stunned.)
BILL: Wait a minute!  Wait just a second!  You just say what the product does?  Well, no one's ever tried that!
GIL: Well, it's, it's crazy.
JILL: It's madness!
FROGS: WE LOVE IT!

After which Kermit promptly becomes the bureau's newest employee, and sales of Ocean Breeze Soap skyrocket.  There is a lot we can learn from a bunch of frog-shaped puppets, folks.

Advertising jumped the shark so long ago the shark doesn't even remember the impression of its passage.  It is as slick and psychologically manipulative as money can buy, and a moment later it can be as crude and rudimentary as the lack of money makes necessary.  Nobody beats Mitch!  There are tender moments amongst the crudity, as well: boundaries stoke creativity.  But they don't guarantee it, and I've seen enough zero-budget red-herring banality to know that integrity hasn't set up its tent at either campsite.

The head-shaking thing of it is, countless hours, pages, melodies, and pixels of advert copy are produced as tires spin in runny mud, because people naturally tune out manipulative or deceptive ads.  Yes, yes, I know the psychology: you'll catch some of the people some of the time.  But once burned you don't get that person back.  And in an emerging world when anyone can find out any information at any time with a device in his or her pocket, any remaining room for arbitrage between the time a pitch is delivered and the time the mark is made aware he's been conned has narrowed to the eye of a needle.  Nobody buys white van speakers any more, folks.  You have zero minutes to swindle that stranger.  As an exercise in cost-efficiency and ROI, surely it's now more optimal to steal their wallet outright than to engineer some elaborate scheme and drape it with a veneer of legitimacy.

And all along, seriously, just playing it straight is going to have a decent hit rate of selling any product or service worth its name. (Which, if true, suggests that any inferior product or service will surely have to be marketed deceptively, which, if true, suggests that the purveyors of perfectly decent products and services are even more foolish to cede the moral high ground of playing it straight, which, iiiifff trrruuuee.... OMG INCEPTION!)

Look at the top equity brands of the present moment.  In some order, Apple, Google, Tesla, Coca-Cola, Trane, Costco, Southwest Airlines; even if I've missed a few, those seven are surely amongst the top twenty, yes?  And across the board those brands build their equity with wholesome marketing.  Apple doesn't even talk about their products in their adverts, they show what people make with them.  Southwest sets up funny skits where the punchline is always how nice it might be to take a vacation.  Trane is even more basic, their "It's hard to stop a Trane" slogan feeds advert campaigns of their HVAC devices taking extreme punishment and chugging along.  One can make a legitimate complaint that Coca-Cola handwaves away the nature of their products, sugar-syrup drinks that will kill you with diabetes if the aspartame in their diet drinks doesn't destroy your circulatory system first, but their marketing is always an inclusive message about connecting people.  Or anthropomorphic animals, as the case may be.

One would think that the example those brands are setting would resonate down the chain.  And, with depressing frequency, that's absolutely not what happens.

I scarcely need to provide non-hobby-industry examples.  Basically all door-to-door sales, all telemarketing, every pop-up window you ever saw, and the vast plurality of adverts otherwise, are festooned with gross distortions, tricks, misdirection, deception, and outright lies.  This is, again, a big part of why people learn to tune out advertising.

Here in the hobby industry, here are some of the worst offenders I see.

PITCH: (Facebook photo of some guy holding up a money card) "These cards got cracked at our draft last night!  Where were you!  They could have been yours!"
MISLEADING SUBTEXT: Players at our store have better-than-normal odds of opening good cards in booster packs.
REALITY: Casinos love it when people are dumb enough to fall for this pitch, because the odds are merciless and never change.  The contents of every booster pack are Schrödinger-approved.  You will never, can never, know what you will open until you do it, and the laws of probability are the same no matter where you are or which pack you are given.  At most you could say that over given spans of packs you're likely to get a slightly smoother yield of rares, and that's going to be the same no matter what store you play at.  Moreover, that means that if you see someone open a jackpot card, due to the same mathematics, for a little while afterward that store is actually less likely to feed you a booster with the same money card.  Given the volumes involved at the FLGS level, the odds return to chalk very quickly.
MORE HONEST PITCH: (Facebook photo of some guy holding up a money card) "Thanks to everyone who had fun booster drafting with us last night!  Join us next time and it might be your night to open an awesome foil card like this one!"

PITCH: (Facebook photo of a bunch of big money cards) "We buy awesome Magic cards every single day!  Come to Grinder's Gulch where our inventory is the best!"
MISLEADING SUBTEXT: Our entire inventory is top-end stuff and we have a limitless supply of it. Other stores that don't are just holding out on you, or don't know what they're doing.  Don't go to other stores.
REALITY: Every store's card inventory is made up of typical ratios of glitter vs trash.  In fact, the larger that store's inventory is, the more variance is eliminated, making it in the aggregate strongly resemble actual print ratios both among expansions and within expansions.  DSG actively purges bulk and it still doesn't change the proportions much in the grand scale of things.
MORE HONEST PITCH: (Facebook photo of a bunch of big money cards) "Look what just landed here at TopDeck Paradise!  We're always buying great Magic collections so we can bring you the cards you want!"

PITCH: (Facebook photo of a room full of tables of players) "Come win boxes of Magic at our weekly Modern win-a-box tournament!"
MISLEADING SUBTEXT: You're probably going to walk away with a full box, valued over $100, after buying in for ten bucks.
REALITY: There's so much wrong with this shortening.  Disposing of the rarer case, for those stores that still do actually award the box to 1st place, only the winner gets that, and the store is exaggerating the likelihood of victory considerably by phrasing it to suggest that all comers are likely to win.  It literally cannot happen.  This is why lottery and casino adverts and such give actual odds and/or say things like "for entertainment only" or "player results and outcomes may vary" so as not to float an unprotected claim that showing up suffices to guarantee BIG WINNINGS.  In the more common case, the pitch is even more misleading, because "Win-a-box" tournaments these days usually just mean at least a box worth of packs is in the prize pool, and it will get split among top finishers.  So literally nobody can "come win boxes of Magic" at that event.  The pitch actually becomes a complete and direct lie.
MORE HONEST PITCH: (Facebook photo of a room full of tables of players) "Come test your Magic skill at our weekly Modern win-a-box tournament!  Booster box or more guaranteed to the prize pool as long as event fires."

PITCH: (Facebook photo of a pile of video games) "We pay top dollar for your video games!  Call us to see what your old video games might be worth!"
MISLEADING SUBTEXT: With our electronic tendrils planted deep in the hearts of our competitors' computers, we can top their offers every time.  And you're surely sitting on a gold mine; you need only pack it up and bring it all in.  What color Land Rover you gonna buy with all that cheddar?
REALITY: Everyone sells used stuff at market price and everyone buys at a ratio of market price that hinges on market demand.  Virtually every independent uses Pricecharting.  Even when you look at Gamestop, which is forced to buy extra low to support its massive overhead and pricey leases, they at least use the same ratio mechanism.  An independent can legitimately claim they outpay Gamestop, and they mostly will, though it's bad marketing to name your competition in your adverts.  But for one video game store to claim its buy prices are always better than another independent?  Unlikely.  They're banking on the fact that a typical person trading in or selling will unload at the first place they visit, and not want to truck their totes full of games all over town.  Moreover, they're going to quote a moonshot price on the phone and then walk it back in person by pointing out every tiny condition detriment to the customer whose goods are on the table.  The thing is, it's so much easier to earn that visit and make a customer happy without being a filthy liar.  Watch:
MORE HONEST PITCH: (Facebook photo of a pile of video games) "Bring us your unwanted video games and trade for new ones or walk away with cold hard CASH!  Always buying, no collection is too big or too small!"  And when they show up, certainly take condition into account, but just explain what you're doing in a matter-of-fact way and most customers will respect you being up front about it.

PITCH: (Facebook photo of a paint rack) "Painted figures roll better!  Get your paint right here at Bob's Game Emporium and blast your way to victory!"
MISLEADING SUBTEXT: If you buy enough paint, you'll surely have enough stored-up dice advantage to win your next game of Warhammer.
REALITY: Dice behave the same regardless of the hopes and dreams of the person rolling them.  This one isn't quite as coarse as the TCG pack odds pitches, but in being milquetoast enough to avoid any real objection, it legitimizes the lie.  That's a direction the otherwise-wholesome miniatures hobby ought not to go.
MORE HONEST PITCH: (Facebook photo of a beautifully painted army) "Get the job done and look good doing it!  Paint an army worthy of the Emperor.  All the colors you need right here at Tabletoppers."

Have I personally used some of the misleading pitches?  Despite my best effort not to, I'm sure I've fumbled some phrasings and let slip a questionable beckon one at some point or another.  I'm sure it was an exceedingly rare case, and I actively attempt to avoid doing so now and forward.  I don't want you to have to take my word for it.  P.T. Barnum himself warned about the perils of believing any merchant's own "humbug," knowing that in being observant about the entire market, the honest merchants would become evident.  One pitch at a time, I know if I am being reliable, the good reputation will follow.  Better to struggle to maintain that, than to allow misdirection and deception to ruin one's reputation so much more quickly and easily.

Come have fun playing games at my store.  Come browse my wares and find collectibles that tug at your nostalgia strings.  Come check out comic stories that will immerse and engross you.  Come buy games you'll enjoy, alone or with family or friends.  Come get cash for your unwanted games.  I'm always buying.  Come entertain yourself and let's see if I can amplify your ability to do so by means of my humble business.  Come enjoy your hobby.  Ocean Breeze Soap will get you clean.  Why should I ever want to lie to you about any of that, when the truth serves both our purposes so much better?

Tuesday, May 23, 2017

Substitution of Cases for Video Game Disc Media

In preparing to go large-scale with video games and especially on the expectation that some online aggregation system is likely a-brewing, I recently took a look at disc media cases to see what the outlook was for improving the condition of high-value games and making low-value games look better out of the box for general audiences.

It goes without saying that any marketplace-tied sellers are going to be expected to provide authentic cases.  However, what happens if the authentic original is generic, and no different from a substitute?  Well, let's take a look.

Here are empty cases, made in China.  Even if I never use them to substitute, they are still useful.  They can be used with printed liners as shelf proxies for shopping and you keep the real games backstage; I think this is ultimately their strongest use.  When you have a loose copy of the game, just having it in the proper color and type of case can make a good buyer impression, even if you don't have a liner.  But can they substitute?

First, let's look at Sony.  Here is an empty Amaray (DVD standard) case next to a Playstation 2 game.
As you can see, this will not substitute at all.  Most PS2 games use this case type with an offset-low spindle and a slot for the memory card that mostly never got used.  There are still things you can do here to add value; if you have a $500 Rule of Rose with a thrashed case full of dog bites, Gamestop stickers, and a broken spine, absolutely buy a $5 factory-sealed copy of some old sports game and swap the (identical, first-party) case over.  But there is zero substitution of standard Amaray cases to pass as PS2 originals here.
Not to mention the endless variations of games with multiple discs.  Even if you're going to swap authentic parts, you need a matching part.  Good luck with that.  It's still possible, of course.

PLAYSTATION 2: NO.

What about its successor?  Playstation 3 used a clear translucent blu-ray case.  Here is a generic version next to a real game:
 Uh-oh, what's that on the top band?
The Playstation logo has to be there on any game that was packaged that way, meaning no substitution.  A shame, because the interior was a dead-on match, including having no Sony-branded fine print or anything:
But wait!  Not all Playstation 3 games have the embossed logo on their cases!  Here is a factory-sealed game that does not have it!
And just to show it was no fluke, here is a factory-sealed, brand-new Greatest Hits series PS3 game with no embossed logo, though of course you'd need a solid red blu-ray case.
So for any PS3 title that does not have the embossed logo on its case, it appears the blank cases are fully substitutable without having any effect on authenticity.

PLAYSTATION 3: SOMETIMES.

What about the newest generation, Playstation 4?  The good thing was the case has no distinguishing attributes.  No embossed logo, neither on used games nor new factory-sealed games.  No fine print of note.  It should be possible to substitute here.  The bad thing is that these particular substitutes are actually made with the spindle offset low!  So if I can find better substitutes, we may be in business:
Can you believe this?  It's dead-on match externally.
 So this one is going to rate a green light, but you have to get the right materials.

PLAYSTATION 4: YES, PROVIDED THE SUBSTITUTE ACTUALLY MATCHES.

I looked into the Playstation Vita and unfortunately I did not have any used complete to test, only loose cards and new-in-box software.  No distinguishing characteristics appear on the outside, and I Googlenetted up some photos and there appears nothing on the inside.  I'm going to call this a qualified yes.
I'm going to call this a qualified yes.

PLAYSTATION VITA: YES, PROBABLY, CHECK YOUR ORIGINAL.
PLAYSTATION PORTABLE: N/A (I was unable to find a substitute case.)

Let's take a quick look at the Playstation 1, given that it used jewel cases for most of its system lifespan.  The early "tall boy" cases are clearly not substitutable.  But later?
There's a generic case, and now the inside of Vandal Hearts, where you can see a Playstation logo in the center and obviously we cannot use any substitute whatsoever for that.
Also, with many games in the PS1 catalog being multi-disc and various different jewel case configurations for single- and multi-disc games alike, I think we're not close here.
So we have a hard "no" for the granddaddy of disc-only console games.

PLAYSTATION 1: NO.

Those generic jewels might yet be useful for other systems, but we will have to evaluate it case-by-case and see how well it matches.  Turbografx is no good as they used custom cases.  Sega CD and Sega Saturn in the U.S. used "tall boy" cases.  But Saturn Japan, Neo Geo CD, and Dreamcast:
This one is not a match for Crazy Taxi 2 and I would not use it as a substitute.  But my guess is there was likely enough production variation that you will find exact and permissible matches from generic substitute cases for "standard CD" packaging.

SEGA CD: NO.
SEGA SATURN USA: NO.
SEGA SATURN JAPAN: SOMETIMES.
SEGA DREAMCAST: SOMETIMES.
NEO GEO CD: SOMETIMES.
TURBOGRAFX SERIES: NO.

Switching now to Nintendo, we have basically zero substitute ability across the line.  Here is a generic Nintendo DS game case.  Mostly pretty accurate, right?
Except oh wait, the embossed logo.  Well, so much for that.
It was a little clearer that we were out of luck in the 3DS generation, as the case has more differences (no "air holes" as well as the logo absence).
 Yeap.
 So I'm going to call these both a hard "no" for substitute cases matching authentics.

NINTENDO DS: NO.
NINTENDO 3DS: NO.

The home systems are just as inimitable.  Check out an Amaray DVD standard case next to a Gamecube standard single-disc case:
And that's an easy one!  Memory card slot, small disc spindle, official logo.  None of this is going to show up on a substitute case, so there's no substitution whatever here.
That's without even considering multi-disc games, some of which have a top/bottom spindle in a single-width case, a configuration not seen anywhere else at all.

NINTENDO GAMECUBE: NO.

How about the Gamecube's much more successful... successor?  At first glance, it looks good.  The substitute cases, aside from being excessively shiny, look very similar.  But oh...
It's an embossed logo, which is the end of that inquiry.  If your original factory-sealed game you are certain does not have an embossed logo, maybe you can substitute freely.  I am going to say that probably isn't happening here.
Nor is it happening on the Wii U, as you can see here on Breath of the Wild.
Nintendo, ever on lockdown, and no surprise here they do the same for packaging.  You need authentic original material, and substitutes will not do.

NINTENDO WII: NO.
NINTENDO WII U: NO.
NINTENDO SWITCH: N/A (I was unable to find a substitute case.)

Finishing up with Microsoft, we've got better news, but not right away.  As you can see, the Xbox One has an embossed and colored logo right there on the case top, and there is no substituting a blank band for that.
In this case the substitute didn't get the texture right anyway, so even without that logo I would not have felt comfortable subbing in a generic case for the X-Bone.

XBOX ONE: NO.

Not much luck with my existing generics with the Xbox 2001 either, except that there's no reason it couldn't be; the original cases have no apparent embossed logo, trademark text, or other characteristics that imitation cases would have to omit.  If you can find cases that match, you should be able to use them.
Again, for multi-disc games you're on your own, but as you can see, there's nothing strange going on here.
For the Platinum Hits series, you'd need to source the correct color of case, as you can see, but once again there's no infringing element to fail on.
So I'm going to call this a qualified "yes" like I did for the PS4.

XBOX (2001): YES, PROVIDED THE SUBSTITUTE ACTUALLY MATCHES.

The Xbox 360 is where we really hit paydirt.  You can't see it as clearly in the photo because the sub case is very shiny and there's no paper behind it, but it's very, very similar, close to identical.
Here is a closer look where you can see only some variation on the interior spindle, and even that may not be consistent across versions.  I'm not sure it stops a substitution here, for most titles.
Of course, you need to take into account multi-disc games with tabs...
And multi-disc games with a multi-disc spindle...
And you'll need grape purple for the Kinect games...
But thanks to the lack of embossed logos or marks and the apparent standardization of manufacture, most Xbox 360 cases appear to be the same as generics, and substitution is likely to be possible in many cases.  When in doubt, research the title!  But I feel good about a Mostly Yes here, which I'll downgrade slightly to match the PS3 that shared this system's generation.

XBOX 360: SOMETIMES.

Let's wrap it all up with our conclusions and I'll let that be it for the week.

IS THE ORIGINAL DISC MEDIA CASE FROM THIS SYSTEM SUFFICIENTLY GENERIC THAT A GENERIC CASE CAN BE USED WITHOUT LOSING AUTHENTICITY?

3DO: NO, MOSTLY ("Tall Boy" boxes regardless of CD jewel cases).
ATARI JAGUAR CD: I HAVE NO IDEA.
NEO GEO CD: SOMETIMES.
NINTENDO DS: NO.
NINTENDO 3DS: NO.
NINTENDO GAMECUBE: NO.
NINTENDO SWITCH: N/A (I was unable to find a substitute case.)
NINTENDO WII: NO.
NINTENDO WII U: NO.
PHILIPS CD-I: SHRUG EMOTICON.
PLAYSTATION 1: NO.
PLAYSTATION 2: NO.
PLAYSTATION 3: SOMETIMES.
PLAYSTATION 4: YES, PROVIDED THE SUBSTITUTE ACTUALLY MATCHES.
PLAYSTATION PORTABLE: N/A (I was unable to find a substitute case.)
PLAYSTATION VITA: YES, PROBABLY, CHECK YOUR ORIGINAL.
SEGA CD: NO.
SEGA DREAMCAST: SOMETIMES.
SEGA SATURN JAPAN: SOMETIMES.
SEGA SATURN USA: NO.
TURBOGRAFX SERIES: NO.
XBOX (2001): YES, PROVIDED THE SUBSTITUTE ACTUALLY MATCHES.
XBOX 360: SOMETIMES.
XBOX ONE: NO.

Hope someone out there found this useful!  See you next time here on The Backstage Pass.

Monday, May 15, 2017

Chasing Tornadoes

Talula, Talula,
I don't want to lose it
It must be worth losing
If it is worth something...
And I never cared too much for the money
But I know right now, honey
That it's in God's hands,
But I don't know who the father is.
-Tori Amos
In the "games" business there are products that go white-hot seemingly without warning, that become instant unobtainium, and then either just jump beyond reasonable presence, normalize and meet demand, or fade out into obscurity, their moment wasted and demand withered on the vine.

The Nintendo NES Classic has never been readily available on retail shelves for longer than minutes at a time, and that's reasonably mainstream.  Here in our niche we have games like Star Wars Destiny, Gloomhaven, and Scythe that never came close to meeting market clamor.  We have games like Dice Masters that went thermonuclear on day one and never caught a second wind because the longshoreman's strike kept reinforcements away for too long.

And then there are times when the stars align and something blows up in the mainstream market and crosses over into ours.  And it makes the NES Classic and Gloomhaven seem moribund by comparison.

Have you ever heard of fidget spinners?
These plastic ball-bearing doodads have blown up to the point at which any amount we can put on the shelves sells out within days or less.  China is already making them in staggering quantities, so for a brief and scintillating moment, we can order huge-margin items, wait with trembling hands as our crates cross the Pacific Ocean, and then turn that money into much more money as soon as customs is done with its customary striptease.

The fidget spinner, like its spiritual cousin the fidget cube, was originally developed as a sensory toy for people on the autism spectrum.  Autistic neurotypes are known for "stimming," short for "stimulating," making repetitive muscle motions such as snapping, flapping hands or fingers, cracking knuckles, grinding teeth, rocking back and forth, and so forth.  The self-stimulation actually has a calming effect, paradoxically, because it helps deaden the autistic person's high sensitivity to external stimuli.  Thus, it helps them focus, in the same way that closing your office door helps when you're trying to decipher a complex document.

Naturally, the neurotypical mainstream can't let anyone have anything to themselves, so ordinary kids who are hyperactive and accustomed to a high-stimulus environment have apprehended the joy and contentment of stimming.  Fidget toys then blew up at a rate that's staggering to behold: in February we started to see distributor offers from our various overseas factory sources; in March the first few stores to gamble were getting their boxes full and selling out; in April those box orders turned to cases, and in May those cases turned to master cartons.  And since my stores are like mediocre NBA point guards who can't create their own shot, it took until April before I was finally ordering them.  Within hours of their arrival earlier this month, they became the top selling items in the Toys & Figures subcategory.

And it's already over.  The Asian supply chain has already caught up to big box integration.  The spinners we readily sell for $10-$15 are showing up at Wal-Marts for half that (but disappearing fast enough that we still get business).  No carton or case or box of fidget toys that I order now is going to appear in time to get ahead of mass market entropy.  By the time I adjust to half the price, Wal-Mart will be at a quarter of the price.  And then they'll start getting container loads from Guangzhou for a tenth of what I've been paying, or less, and in half the transit time.  And then the public will stop caring and the fad will have passed.

I've got near-zero risk here with Phoenix Comicon and a slate of convention and movie release table dates coming up for the store, and there's no way we fail to clear a table of fidget toys at an event where we already sell out of every doodad we bring.  But for ordinary small specialty retail store shelf inventory purposes, the window of opportunity for these things opened, and now it is closing.  It was that fast.

It was incendiary hot for the shortest time you can imagine, and we were basically printing money at the speed these things moved, but now it's over.

This has been a good lesson for the hobby game trade because there was some money available on the table for anyone with the prescience to act quickly, but a store that simply stayed the course and focused on fundamentals probably did just fine and had less work to do and less uncertainty and less credit card balance tied up in a transoceanic supply chain.  A store that just stood pat probably ended up very close to breakeven with the stores that, you know, did anything with regard to fidget toys.

An ideal scenario is perhaps a full-line game store that plans to keep the fidget toys around regardless of the fad, perhaps to supplement an existing deployment of educational and construction toys.  They'll become like other products that the mass market has destroyed, where we have them in stock but most people gripe that our $9.99 spinners are $2.99 (by then) at Walgreens.  Our mainline distributors will have the really nice design-print spinners and cubes, at the awful margins we've come to accept, and they'll fit right in next to the 65% COGS Diamond statues.  We'll tell stories to new retailers about the margins we got for two brilliant weeks when the fidget spinner trend first exploded, and they'll call bullsh*t and won't believe us.

Chasing tornadoes, attempting to catch the leading edge of a trend, is something that feels very right and appropriate for a hobby game store, and especially for a comic store where trends and the product are often one and the same.  But it's akin to speculation.  It's something less than a "spec," while still being speculative.  It's like a steakhouse adding in a trendy fish entree to capitalize on publicity.  They may sell some, but the reality is they disrupted their menu and added process and created exceptions and did all this despite the reality that most of their patrons came in because they wanted steak.

Fundamentals.  Make sure you're still selling steak.  Make sure your steak-eating customers still get what they showed up for.  And if you think you have that mastered -- well, none of us do, but if you think you've got it under control -- then sure, be my guest.   The occasional dalliance with some market darling can be excused, but don't let a cheap thrill cost you your marriage.

EDIT JUNE 12TH: IT'S OVER!!!  That was fast.  Wal-Mart is under five bucks now.  We can still make some sales here but it went from worth-it to not-worth-it essentially.

Wednesday, May 10, 2017

Stabbing Westward

It's happening: Desert Sky Games: Gilbert will be moving to nearby Chandler!
We know this is a big announcement and will set off a lot of questions.  It's too soon for some of them but perfect for others:

Q: Where exactly in Chandler?
A: We are not at liberty to give an exact address until (I think) July 1st.  The destination space and the lease arrangement involve existing businesses.  We don't want to start off our relationship with our landlord by upsetting his tenants, who have their own location moves, upgrades, and potentially closures underway.  It is not far from the current store, and is close to the freeway.

Q: How much room will you have?
A: When fully built, the new store will be five times the size of the current store.  Our gameplay area alone will be more square feet than the entirety of each other store in the East Valley.

Q: When exactly is the move?
A: We have to be clear of the Gilbert location in just under six months, so we're aiming for a late-summer opening knowing it's likely to be more of an early-fall opening.

Q: So why announce so early?
A: An explanation is warranted.  The trendy thing right now is crowdfunding (Kickstarter, Gofundme, Indiegogo) when a store needs to expand, or move, or survive a downturn.  We don't believe in that kind of thing.  Panhandling just isn't our way.  We intend that our clients always get their money's worth.

Meanwhile, construction always costs more than expected, and we intend to fund this entire move out of operating capital rather than borrowing.  (And if we do end up having to borrow, we will still have that option open.)

Therefore: We are starting our MOVING SALE... NOW.

With the plan being that the sale will supplement the construction budget at this early stage.  This also gives us the flexibility to refresh the sale a couple of times every week as we go, adding new deals to give our customers something more to discover.  We have even more merch stored away that there hasn't even been room for us to floor, and now we can bring that out.  Doing all this meant announcing early was best.

Q: So, what kind of deals are we talking about here?
A: We are offering 40% to 90% OFF all items in the moving sale.  Look for the yellow tag.  Prices are good in-store only and are while stock lasts. We are not messing around.

Q: What kind of merch is included in the moving sale?
A: Almost everything, but especially toys and collectibles, board games, miniatures, CMGs, apparel, and accessories.  You know, stuff that takes up room and is bulky or fiddly to transport.  Deep sales on lines like Warmachine/Hordes and Guild Ball, HeroClix, Ultra-Pro, and Funko.

Q: Wait, are you getting out of those categories and games?
A: NO.  In fact, at the new location we're going to have more of them than ever.  It's a paradox of retail finance that it makes more sense to sell off an item, even at a deep discount, and reorder it at full wholesale six months down the road, rather than conveying it.  It's kind of like how you're better off holding a big garage sale before you move, reducing costs for transportation and/or storage.

Q: So you're not dropping board games?
A: Nope.  Keeping them.  DSG Chandler will have room to feature a huge array of board games, including a demo library for players.  The way we always hoped to do it.

Q: And you're not dropping WarmaHordes and Guild Ball?
A: Not at all.  Miniatures players will finally have room to roam at DSG Chandler.  And Warhammer is hotter than ever right now.

Q: What about HeroClix?  You canceled your upcoming events.
A: We are rebooting HeroClix this fall at DSG Chandler.  We saw two straight years without player base growth, which is atypical for a game that is successful at many stores nationwide.  This tells us our processes for HeroClix were not working and not serving our player community.  We're going to give all local Clixers a parting gift with this blowout sale, and then rebuild from the ground up later.  Meanwhile Clix is strong at Imperial Outpost and Game On Prescott to tide you over.

Q: What about comics?  Gilbert moved them all to Tempe.  In fact, what about Tempe?
A: DSG Chandler will have room for all comics, but that's phase two or three.  Phase one is getting DSG Chandler open as a replacement for DSG Gilbert.  DSG Tempe will continue to host the vast comic inventory in the meanwhile.

Q: What about Gilbert?  DSG has a lot of customers east and south of the store.
A: We're still going to be close with easy freeway access.  But this move also gives us an option we didn't have before, that East and South Gilbert customers may like.  The San Tan Village Mall opened its first leases in late 2007.  That means the next 12 to 20 months will see initial 10-year and 5+5 option leases expiring, which opens up an opportunity for a perfect DSG Gilbert branch location at the STV in 2018+. I'm very excited about this as it's a strong commercial property.  It's possible this supersedes the Superstition Springs plan.  We'll reach that question at a later date.

Q: Isn't it going to be weird having a bunch of empty aisles and racks?
A: We have it covered: Another purpose of the sale is so we can take some racks down and move them to Chandler ahead of time.  This will also allow us to open more of the room to gameplay, and make DSG Gilbert a little more comfortable in its final months.

Q: Sounds awesome.  Thanks for explaining all this.  But wait, did you... did you just...
A: Yes, I have been waiting to use that article title for years.  Had we moved in the other direction, I would have used "Eastbound and Down" from Smokey and the Bandit.  North and South weren't really in play because I wanted to stay close to the freeway.  But we're loaded up and truckin', and we're gonna do what they say can't be done.

That's it!  Hope you're as jazzed as we are to move forward into the DSG future with our enormous new hub location and headquarters!  In the meanwhile, we hope you will visit DSG Gilbert and take advantage of deals that, honestly, we will probably never be offering again.