The Lemming and the Frog

Today I want to talk about existential threats.

Every big beast of a game is a rollercoaster. New players enter. Old players leave. Every new edition is a jumping on point, but it is also a jumping off point. You look at all those books or unpainted miniatures, and instead of happiness you feel shame.

Obviously I’m forty years shame free here, but still. One bad bill, one bad breakup? Who knows. Take stock, Marie Kondo style. People do it so often that the cable TV industry coined a phrase for it.

Churn.

If more subscribers jump ON than jump OFF, everything is rosy. If the opposite occurs, then a whole floor of TV execs are marched to the guillotine.

Technology is a strange bedfellow for the game store. I mean we are nerds, doing nerdy things. Avengers made everyone a nerd doing nerdy things. For the reasons we covered in the two part Selling Happiness series, face to face interaction will always be more inherent satisfying to our brain chemistry than the blinking red light of the modem.

But that doesn’t mean we shouldn’t worry.

The world’s biggest game has an online competitor. A huge relaunch a few years earlier took everyone by surprise. Suddenly everyone wanted to play. Suddenly every store wanted to stock it. Shelves filled to bursting with stock, and expansion followed expansion followed expansion. Playing was expensive – if you wanted to be ‘competitive’ – but more importantly you needed other people. Due to the magic of the internet these people could be anywhere, everywhere, anywhen. Whenever you logged on.

The year was 2004. The world’s biggest game was Dungeons and Dragons 3rd Edition. Its online competitor was World of Warcraft. We had opened Fan Boy Three six months earlier.

As part of our opening, we had made outreach to the local RPG club. Roleplaying was to be the centrepiece of our new store. I wanted to take Organised Play and expand it, in new areas. Few stores in the UK did anything in store – most activities were clubs, in pub function rooms and scout huts. But we had visibility. We had street presence. We had footfall.

Within a month we had ten tables of roleplayers on a Tuesday night. If your group had women in it, you played in the window. Representation matters. Visibility matters.

Six months later we were struggling to fill two. People would cancel to go raiding. Warcraft required no friends. No table. A minimal investment. No going out. No bad weather. No transport costs. No need for clothes. You could just sit at home in your underpants and simultaneously conquer Azeroth at any time of the day or night.

The Warcraft TCG pulled some of them back – as buyers, and we did exceptionally well with the OP for a while on the back of Spectral Tigers – but it was hard to compete. We remaindered all our Mongoose 3rd Edition books, and wondered what to do.

Four years later we had our answer.

Dungeons and Dragons 4th Edition was the perfect product to Warcraftify. Anytime you came in store, we had people to play with. They’d just come, hang out. You can see some of them in the Dungeons and Fanboys video on Youtube. With a constant on tap cadre of players, just rock up to Fan Boy three, ask about D&D and we had a game going in minutes. I ran Tyma 1-1 so many times I could probably run it by memory ten years later if you asked me to! I personally logged 350 sessions the first year.

There were big meetups every time a new module dropped. Private session zeros for our DMs. Random folks who had never ever played before were pounced upon and playing – and buying – and coming back – daily. Most things that Warcraft did, we did. But we did it with added Oxytocin. By the time Martial Power 2 was released, we were ordering more on launch than Amazon UK.

My one store. With no online presence.

For a year now, Magic has had its own online competitor. And its Magic.

On the plus side, this is great news for Wizards. It’s not the first time they’ve tried to implement the Magic experience online – Magic the Gathering Online ran fits clunky little engine along the track two years before World of Warcraft. But this is definitely slicker, and will have attracted 3 million players by 2019 with an expectation of hitting 11 million by 2021.

Many of those players are ‘paper’ Magic players.

When I was a Travelling Man we had four stores. One of the things I did was to model the potential spending power of a city. I did that by calculating the amount Travelling Man Leeds, Derby, Nottingham and York generated, then mapped the data onto the population aged 18-35. It was pretty consistent. You could essentially model the nerd pound. Nerds don’t ‘spend more’ because there are more things to spend on. They have rent, rates, food, transport, clothes, the cinema. The nerd pound was remarkably consistent across all four stores, so much so that we could use it to model Fan Boy Three. We knew that there was £450,000 of nerd pound gaming budget in the city before we opened.

But before you start booking flights to Seattle with pitchforks, there’s a few more things to consider.

In 2009 Wizards released Duels of the Planeswalkers for console. Unwittingly they had kind of invented app games before we had the phones to play them. Duels was light – just enough Magic to get you started, with a driver to stores if you wanted more depth.

It was an instant hit.

Soon there was an actual carrot in store in the form of a promo pack. Everyone wanted it, so much so that existing players bought the game on multiple formats to get multiple packs.

The players that bought Duels and played it had a pastime. The players who got Duels for the promo had a hobby. Hobby’s cost more, but they are more rewarding. You get more out. More Dopamine. More Oxytocin.

Here’s the thing. Players who played Duels who enjoyed Magic were the economic driver behind Wizards exponential growth in those years. Return to Ravnica. Huge FNMs. Huge PTQs. It’s not just individuals who get huge Dopamine spikes form hitting their goals, companies do too.

Like Warcraft, Arena is cheaper. There are always players. Games are faster. Arguably more ‘fun’. But a million virtual people in a room is still just you, and that will always be our USP. People. Community. Belonging. At its height Warcraft had 12 million subscribers. it has a fraction of that now. Hearthstone claims a hundred million. Candy Crush Saga 272 million.

Arena has three.

Warcraft changed the world. It turned a generation on to rolelaying. Sure, it barely benefited us at the time, but we all reaped its rewards. We weren’t just waiting for our D&D players to get bored and come back – we were waiting for their friends and their kids. Orcs, elves, trolls, gnomes – these are common everyday words now. We understand quests. We understand experience and levelling up. People gamerfied everyday tasks so we are chased by zombies on our morning run. Walk to hatch your eggs in Pokemon Go.

The secret is, you store has never been part of the retail industry. it was always the entertainment industry. Your competition was Netflix and chill, or Avengers, or Bowlarama. And if the Netflix Magic show and Arena turn 100 million folks onto how to play Magic, long term we WILL reap the reward.

But I understand that’s not what you want to hear if you can’t fire drafts and standard events.

Because Warcraft WAS a flaming scythe that cut down an industry. Few companies that were big at my first GAMA Trade Show in 2001 are with us now. The game store evolved too – into the Organised Play model – and now we have to change again. If you had not diversified before, now is the time. Think about the ways in which YOUR store, YOUR unique USP IS a unique USP. No lemming ever got rich by following the other lemmings.

You. Will. Lose. Revenue. To. Arena.

You simply will. It’s just not possible to go back to the well again and again and still find water in it. Short term at least – while Wizards see our players as the easiest way to build their online brand. But in time millions of players who have just learned to play Magic from Arena after seeing the show on Netflix will need somewhere to play. With others. Imagine them stepping, blinking, out into the light. It will help you through the dark times ahead.

Because there are dark times ahead.

Few stores can survive any downturn in turnover. Lop the top 10% of sales off most balance sheets and you have trouble. It’s harder to lop that 10% off payroll, off rent, off rates, off inventory cost. Unless you were making money hand over fist in terms of net profit you are in trouble. Since most stores make zero net profit, trouble is what they are in.

This was the secret to Amazon. They didn’t need ALL the sales, just enough of them to bankrupt the other channels to market. Few big box stores were making margins like that – most big British Supermarkets rely on pennies in the pound and long sales terms. This is the part of the thing Wizards simply cannot understand. To them, they gave us the opportunity to profit from selling their goods, and they still are. It’s greedy of us to expect to have 100% of the market. 90% is surely enough? Then 80%. Then 70%. Eventually a cascade effect of non sustainability will kill even the biggest game stores – and we are already seeing that.

The frog is slowly being boiled.

Don’t be a lemming or a frog. Adapt. Evolve. Diversify. I thought Warcraft would kill me. It didn’t. I adapted. Diversified. And you will too. The future will be brighter than you could ever believe.