The Future of Paper Magic by Saffron Olive

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Card Slinger J
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Post by Card Slinger J » 4 years ago

https://www.mtggoldfish.com/articles/th ... aper-magic

Found this article by Saffron Olive of MTG Goldfish and thought I'd share it.

Discuss.
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Post by Dunharrow » 4 years ago

He seems optimistic in his article, but it seems like a bleak future to me. But his analysis seems spot-on.
There are way fewer constructed events at my LGSs.... I routinely look at 5 different stores and, other than drafts, events are just not firing.
Digital Magic is the place to be for constructed. And LGSs cannot survive on commander players who go weeks without spending a dime.
LGSs can only be viable now if they are heavy into online sales. Think about that for a second - WOTC is selling to stores at a discount so that they can foster a community and all we see is that they only stay afloat if they are doing well selling online. WOTC is right to test the waters for selling direct. The only issue is the secondary market. They need resellers to keep paper magic alive.
My fear is that by pushing digital and making these direct-to-market products, we will lose physical LGSs. If your revenue is mostly online, just become an online retailer and cut the crazy costs. And when there are no stores to play in anymore, paper magic will dry up very quickly.
WOTC needs to give better margins to their LGSs, more exclusive products, and more reasons to play in-store.
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Post by Proteus » 4 years ago

To be honest, an LGS that pinned their entire financial structure on one game almost deserves to get shut down.

There ARE other games than Magic out there. And you don't need online sales to stay afloat, either, you just need to diversify your focus instead of going all-in on one game.

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Post by robertleva » 4 years ago

MtG and 40k are pretty much the only games that regularly draw folks out of their own personal dungeons on a weeknight. These games are rich and deep with strategy and customization. When you design a deck (or an army) you are putting a lot of yourself into it and losing or winning has gravity because of it. There is something about physically sitting down in front of another human and playing these games that digital doesn't completely capture.

I am an HUGE digital fan. I bet you can dig up posts of me saying paper magic was dead once Mtgo and Paper Extended formats finally caught up to each other. Digital is amazing and obviously it will only get bigger over time. That said, I don't think paper will ever be obsolete. Poker is another comparison that works I think. Digital poker is real and huge but you could never say it's the same as sitting down in front of people and playing poker.

LGS owners are / have been in perpetual danger since before we were born. There isn't much money to be made of kids who have very little money. The adults who play these games just buy their decks / singles online for the most part. Sure if the LGS just HAPPENS to have that single you needed you buy it there, but 9 times out of 10 they don't have it and you have no choice but to go online.

So yes, LGS owners struggle and will continue to struggle. I don't see this changing any time soon. But neither do I see the demand for a place to play paper magic going away. I would bet that the decline of events at your local LGS lately has more to do with modern and other formats in general sucking badly for all of 2019 than any real shift to the digital medium. If they make fun formats (Pioneer) people will come out to play them. That is what I am currently seeing at my LGS, and I expect that to be the same pretty much all over.
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Post by motleyslayer » 4 years ago

Dunharrow wrote:
4 years ago
He seems optimistic in his article, but it seems like a bleak future to me. But his analysis seems spot-on.
There are way fewer constructed events at my LGSs.... I routinely look at 5 different stores and, other than drafts, events are just not firing.
Digital Magic is the place to be for constructed. And LGSs cannot survive on commander players who go weeks without spending a dime.
LGSs can only be viable now if they are heavy into online sales. Think about that for a second - WOTC is selling to stores at a discount so that they can foster a community and all we see is that they only stay afloat if they are doing well selling online. WOTC is right to test the waters for selling direct. The only issue is the secondary market. They need resellers to keep paper magic alive.
My fear is that by pushing digital and making these direct-to-market products, we will lose physical LGSs. If your revenue is mostly online, just become an online retailer and cut the crazy costs. And when there are no stores to play in anymore, paper magic will dry up very quickly.
WOTC needs to give better margins to their LGSs, more exclusive products, and more reasons to play in-store.
Kind of similar to my area in a sense, it's really hard to fire paper events outside of FNMS (even FNM struggles in my area now too). I remember 3-4 years ago, all 3 stores in my area could regularly fire FNM with plenty of people and each had their own casual/open tables night in the week for people to jam whatever or play an event if they wanted to. Flashforward to now, 1 store took away their tables because people weren't attending and the owner decided to put that space towards what was actually making him money (store is more of a pawn shop specializing in toys and retro games rather than traditional gaming/comic store).

Modern has traditionally been the most played format in the area but even that is struggling due to the perceived health of the format, which is another topic.

On topic of commander players though, there's a group of Saturday commander players at my main store, a few of them spend so much money at the store, which is possibly outside the norm for those types of players. I've seen them buy completely random sealed product just for the fun of it or trying to get stuff for their new commander decks though.

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Post by Dunharrow » 4 years ago

Proteus wrote:
4 years ago
To be honest, an LGS that pinned their entire financial structure on one game almost deserves to get shut down.

There ARE other games than Magic out there. And you don't need online sales to stay afloat, either, you just need to diversify your focus instead of going all-in on one game.
Toys R Us basically went out of business
Game stores have had to reinvent themselves to survive against Amazon.
But even though my LGSs are focused on other things - other CCGs, video games, miniatures, etc, Magic is huge for them. These other things get them some traffic but it is not the same. I think it is right to be concerned about the way digital is affecting in-store play because it may affect the viability of many stores existing.
I just want to say that WotC needs to support stores with better margins. They also should allow stores to buy Secret Lair at a discounted rate to sell at the same price.
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Post by Hermes_ » 4 years ago

If MTG is the store's only means of income.....then you kind of deserve what happens for not diversifying. like [mention]Proteus[/mention] said.
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Post by JaceBluesMaster » 4 years ago

FLGSes need to completely re-brand themselves. Stores cannot rely on the product to draw people in now-a-days. They need to re-invent themselves into places that people actually WANT to hang out at. They need to go above and beyond to remain relevant.

If your FLGS is a dark, smelly dungeon, then it will not survive in this new business environment.

Additionally, no store can solely rely on the sale of one game to survive. You really need to pool together lots of different games and business ventures to remain solvent.

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Post by motleyslayer » 4 years ago

JaceBluesMaster wrote: FLGSes need to completely re-brand themselves. Stores cannot rely on the product to draw people in now-a-days. They need to re-invent themselves into places that people actually WANT to hang out at. They need to go above and beyond to remain relevant.

If your FLGS is a dark, smelly dungeon, then it will not survive in this new business environment.

Additionally, no store can solely rely on the sale of one game to survive. You really need to pool together lots of different games and business ventures to remain solvent.
I feel that the "dark, smelly dungeon" issue is something that I've been hearing people say as a reason they wouldn't play at certain stores for years/or just not liking how a store comes across.

I feel that my main LGS has been had some of its main crowds being D and D/Pathfinder players and commander players who just go there to play casually for a while now. That could be partially because some of the grinder type players got disillusioned with comp level play for a bit

I don't know if stores just need to push smaller level events or how else to accomplish getting to be places to just hang out at

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Post by Card Slinger J » 4 years ago

A lot of people take the safety of playing at an LGS for granted as opposed to playing at a random strangers' house without their parents' permission which is the direction WotC is leading MTG toward. The likelihood of actually getting killed or arrested at a random strangers' house playing MTG and/or having thousands of dollars worth of cards stolen is FAR greater than it is at an LGS where they normally prevent those sort of situations from happening. Granted there have been cases of theft at the LGS in the past but as far as homicides go it's very minimal. I think it all boils down to having good security.

Why would WotC want to take that sense of security away from players who feel more comfortable playing at an LGS as opposed to a random strangers' house or a public place where the environment isn't as forgiving? I'm not saying that all households and public places are like this but what If more crimes are committed as an end result of players no longer having an LGS to play MTG at? They feel that If they try to push MTG toward a digital space with Arena then they don't have to worry about promoting a product that could actually lead to violence.

If the LGS wants to stay ahead of the curve then they need an online presence to stay in business. I'm guessing that they don't have the funds to provide PC's for people to buy and sell cards through their store website but not everyone owns a smartphone to make those kinds of purchases or sell cards to the store. There's a limit to how much inventory they can carry to where it's just sitting on the shelves collecting dust. They need to be able to move other products around than just card singles which seems to be what WotC's going after with the recent Collectors Editions.
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Post by JaceBluesMaster » 4 years ago

motleyslayer wrote:
4 years ago
JaceBluesMaster wrote: FLGSes need to completely re-brand themselves. Stores cannot rely on the product to draw people in now-a-days. They need to re-invent themselves into places that people actually WANT to hang out at. They need to go above and beyond to remain relevant.

If your FLGS is a dark, smelly dungeon, then it will not survive in this new business environment.

Additionally, no store can solely rely on the sale of one game to survive. You really need to pool together lots of different games and business ventures to remain solvent.
I feel that the "dark, smelly dungeon" issue is something that I've been hearing people say as a reason they wouldn't play at certain stores for years/or just not liking how a store comes across.

I feel that my main LGS has been had some of its main crowds being D and D/Pathfinder players and commander players who just go there to play casually for a while now. That could be partially because some of the grinder type players got disillusioned with comp level play for a bit

I don't know if stores just need to push smaller level events or how else to accomplish getting to be places to just hang out at
When I was in high school there was a card shop that I adored but on the weekends, during the summer, the store REEKED of BO because the store was small in size, not well air conditioned and over stuffed with middle and high schoolers. It was so bad, your clothes would sometimes retain a bit of the nasty musk after playing in a tournament. :?

But it was well lit, so at least there was that :laugh:

Each store will have to find its own way in terms of events. It really depends on what the community wants (and is willing to support/sustain), honestly.

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Post by Card Slinger J » 4 years ago

The problem is that MTG is so intertwined with the LGS business model that it's become increasingly difficult to advertise and market it the same as Hasbro's other board game properties with Monopoly and Scrabble. What are the odds of being able to persuade your relatives into playing MTG as opposed to a group of random strangers at an LGS? MTG is still relatively niche compared to a lot of popular franchises within the Gaming Industry in general which explains why Pokémon TCG has a much wider appeal due to the Anime / Manga, Toys, and Video Game franchise. MTG was never reliant on it's source material to advertise and market itself as opposed to how unique the game play experience is.

Even though they're both partners within the same company I feel that Hasbro and Wizards of the Coast have different mindsets in regards to where they're wanting to take MTG. Hasbro only cares about profit margins so they don't understand the basic concept of community. Wizards of the Coast used to understand this well compared to how different board games were ran under Hasbro and Milton Bradley where there wasn't a need for a community or LGS. The biggest challenge that Paper Trading Card Games / Collectible Card Game's face right now is the ability to adapt outside the LGS where it becomes more socially acceptable. It's hard when most people only have time to play when they're off work normally during the weekends.

Then again it's bad for the LGS since there would be less customers coming in so unless there's any competitive events going on to entice them, they're going to go to other venues where it will be a lot harder to find good meet up spots to play without having to rely on social media. Too many places to play means less people showing up in certain places where in this case less is more. When you have the option to play just about anywhere in town If you have a drivers license or an Uber it can lead to a lot of confusion with how to setup and meet up with local playgroups / hangouts. One thing I know for sure is that pushing toward a digital space isn't the answer.
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Post by onering » 4 years ago

Dunharrow wrote:
4 years ago
Proteus wrote:
4 years ago
To be honest, an LGS that pinned their entire financial structure on one game almost deserves to get shut down.

There ARE other games than Magic out there. And you don't need online sales to stay afloat, either, you just need to diversify your focus instead of going all-in on one game.
Toys R Us basically went out of business
Game stores have had to reinvent themselves to survive against Amazon.
But even though my LGSs are focused on other things - other CCGs, video games, miniatures, etc, Magic is huge for them. These other things get them some traffic but it is not the same. I think it is right to be concerned about the way digital is affecting in-store play because it may affect the viability of many stores existing.
I just want to say that WotC needs to support stores with better margins. They also should allow stores to buy Secret Lair at a discounted rate to sell at the same price.
Just a quick point about Toys R Us:

Toys R Us didn't go out of business because their model was unprofitable. They went out of business because they were bought by a vulture capital firm, which then loaded them up with debt while paying themselves consultant fees and pocketing money, then spun it off leaving Toys R Us holding a bunch of debt with nothing to show for it. Sales were down, but without the debt they incurred solely to enrich their former owners, the company would have still been profitable. They were spending $400 million a year just to service the $5 Billion in debt the vulture capital firms saddled them with. having to dedicate such a large amount of money to their debts also kept them from being able to refurbish stores and make changes to be more competitive and win back customers, but even with the rise of Amazon and competition from Walmart and Target, they were still seeing enough business to survive if not for those debts.

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Post by Card Slinger J » 4 years ago

Dunharrow wrote:
4 years ago
He seems optimistic in his article, but it seems like a bleak future to me. But his analysis seems spot-on.
There are way fewer constructed events at my LGSs.... I routinely look at 5 different stores and, other than drafts, events are just not firing.
Digital Magic is the place to be for constructed. And LGSs cannot survive on commander players who go weeks without spending a dime.
LGSs can only be viable now if they are heavy into online sales. Think about that for a second - WOTC is selling to stores at a discount so that they can foster a community and all we see is that they only stay afloat if they are doing well selling online. WOTC is right to test the waters for selling direct. The only issue is the secondary market. They need resellers to keep paper magic alive.
My fear is that by pushing digital and making these direct-to-market products, we will lose physical LGSs. If your revenue is mostly online, just become an online retailer and cut the crazy costs. And when there are no stores to play in anymore, paper magic will dry up very quickly.
WOTC needs to give better margins to their LGSs, more exclusive products, and more reasons to play in-store.
Since Wizards of the Coast only makes money on sealed product over card singles that aren't direct-to-consumer, maybe there should be a small sales tax implemented for card singles sold at the LGS where the proceeds go toward Wizards of the Coast to help turn a profit even though the profit margins are much wider for the LGS. Only problem is that it would involve Wizards of the Coast tampering with the supply / demand of the Secondary Market where they end up breaking the law seeing as how they could manipulate MTG in such a way where it becomes more expensive than it already is.

As far as Wizards of the Coast giving better profit margins to the LGS with more exclusive products and more reasons to play in-store, they don't want to have anything to do with LGS owners anymore after they faked events just to sell product online that never went into the hands of event participants which ended up artificially inflating the price of promo cards. So Wizards of the Coast has been creating wallet fatigue to maintain a demand that didn't exist because it was screwed over by LGS owners that didn't know any better by taking advantage of Wizards of the Coast. That's karma for you.
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Post by motleyslayer » 4 years ago

Card Slinger J wrote:
4 years ago
Dunharrow wrote:
4 years ago
He seems optimistic in his article, but it seems like a bleak future to me. But his analysis seems spot-on.
There are way fewer constructed events at my LGSs.... I routinely look at 5 different stores and, other than drafts, events are just not firing.
Digital Magic is the place to be for constructed. And LGSs cannot survive on commander players who go weeks without spending a dime.
LGSs can only be viable now if they are heavy into online sales. Think about that for a second - WOTC is selling to stores at a discount so that they can foster a community and all we see is that they only stay afloat if they are doing well selling online. WOTC is right to test the waters for selling direct. The only issue is the secondary market. They need resellers to keep paper magic alive.
My fear is that by pushing digital and making these direct-to-market products, we will lose physical LGSs. If your revenue is mostly online, just become an online retailer and cut the crazy costs. And when there are no stores to play in anymore, paper magic will dry up very quickly.
WOTC needs to give better margins to their LGSs, more exclusive products, and more reasons to play in-store.
Since Wizards of the Coast only makes money on sealed product over card singles that aren't direct-to-consumer, maybe there should be a small sales tax implemented for card singles sold at the LGS where the proceeds go toward Wizards of the Coast to help turn a profit even though the profit margins are much wider for the LGS. Only problem is that it would involve Wizards of the Coast tampering with the supply / demand of the Secondary Market where they end up breaking the law seeing as how they could manipulate MTG in such a way where it becomes more expensive than it already is.

As far as Wizards of the Coast giving better profit margins to the LGS with more exclusive products and more reasons to play in-store, they don't want to have anything to do with LGS owners anymore after they faked events just to sell product online that never went into the hands of event participants which ended up artificially inflating the price of promo cards. So Wizards of the Coast has been creating wallet fatigue to maintain a demand that didn't exist because it was screwed over by LGS owners that didn't know any better by taking advantage of Wizards of the Coast. That's karma for you.
I feel that product meant for certain events might be a bigger issue than it initially seems like, but that may just be me wishing the best out of people. I've seen it happen more than i would like.

In regards to events, I feel a problem stores have in my area that was present even before attendance dropped was that stores would only really run events that Wizards wanted them to. Now that Wizards doesn't have many events they want to have run combined with less attendance, there aren't as many events

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Post by Card Slinger J » 4 years ago

Probably worth mentioning here since it was also brought up on MTGS, but LGS owners can't afford to make 10-30% off product alone otherwise they'll go bankrupt. They need to be shooting for 50% margins on just about everything except LEGO and a handful of other stuff. Granted this is on top of running events, drinks, and snacks. The LGS can't rely solely on events, drinks, and snacks to stay afloat when product sales matter a lot to any LGS's bottom line.
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Post by Dunharrow » 4 years ago

Card Slinger J wrote:
4 years ago
Dunharrow wrote:
4 years ago
He seems optimistic in his article, but it seems like a bleak future to me. But his analysis seems spot-on.
There are way fewer constructed events at my LGSs.... I routinely look at 5 different stores and, other than drafts, events are just not firing.
Digital Magic is the place to be for constructed. And LGSs cannot survive on commander players who go weeks without spending a dime.
LGSs can only be viable now if they are heavy into online sales. Think about that for a second - WOTC is selling to stores at a discount so that they can foster a community and all we see is that they only stay afloat if they are doing well selling online. WOTC is right to test the waters for selling direct. The only issue is the secondary market. They need resellers to keep paper magic alive.
My fear is that by pushing digital and making these direct-to-market products, we will lose physical LGSs. If your revenue is mostly online, just become an online retailer and cut the crazy costs. And when there are no stores to play in anymore, paper magic will dry up very quickly.
WOTC needs to give better margins to their LGSs, more exclusive products, and more reasons to play in-store.
Since Wizards of the Coast only makes money on sealed product over card singles that aren't direct-to-consumer, maybe there should be a small sales tax implemented for card singles sold at the LGS where the proceeds go toward Wizards of the Coast to help turn a profit even though the profit margins are much wider for the LGS. Only problem is that it would involve Wizards of the Coast tampering with the supply / demand of the Secondary Market where they end up breaking the law seeing as how they could manipulate MTG in such a way where it becomes more expensive than it already is.

As far as Wizards of the Coast giving better profit margins to the LGS with more exclusive products and more reasons to play in-store, they don't want to have anything to do with LGS owners anymore after they faked events just to sell product online that never went into the hands of event participants which ended up artificially inflating the price of promo cards. So Wizards of the Coast has been creating wallet fatigue to maintain a demand that didn't exist because it was screwed over by LGS owners that didn't know any better by taking advantage of Wizards of the Coast. That's karma for you.
I don't understand why you think that WOTC needs to make more money and 'tax' sales of singles. Magic is Hasbro's most profitable brand.

LGSs launching fake events - WOTC needs to watch that. This is not a widespread issue.
WOTC can't dump LGSs. If they do, paper magic will die out.
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Post by Card Slinger J » 4 years ago

Dunharrow wrote:
4 years ago
I don't understand why you think that WOTC needs to make more money and 'tax' sales of singles. Magic is Hasbro's most profitable brand.

LGSs launching fake events - WOTC needs to watch that. This is not a widespread issue.
WOTC can't dump LGSs. If they do, paper magic will die out.
And here I was under the assumption that the LGS makes more money on card singles than Wizards of the Coast does with Secret Lair since they're technically not allowed to tap into the Secondary Market. So why is Wizards of the Coast flooding the market with so many MTG products when it feels like a blatant attempt to pressure the LGS into selling products that have terrible EV (Expected Value)?

The more bad products they release the more difficult it is for the LGS to move it off their shelves. So in a way Wizards of the Coast is profiting off of manufacturing bad products to the LGS which forces them to order less products since they can't turn a profit off of MTG products with terrible EV (Expected Value). This in turn forces the LGS to rely on card single sales, buylist orders, as well as food and drink in order to stay afloat.
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Post by Dunharrow » 4 years ago

Card Slinger J wrote:
4 years ago
Dunharrow wrote:
4 years ago
I don't understand why you think that WOTC needs to make more money and 'tax' sales of singles. Magic is Hasbro's most profitable brand.

LGSs launching fake events - WOTC needs to watch that. This is not a widespread issue.
WOTC can't dump LGSs. If they do, paper magic will die out.
And here I was under the assumption that the LGS makes more money on card singles than Wizards of the Coast does with Secret Lair since they're technically not allowed to tap into the Secondary Market. So why is Wizards of the Coast flooding the market with so many MTG products when it feels like a blatant attempt to pressure the LGS into selling products that have terrible EV (Expected Value)?

The more bad products they release the more difficult it is for the LGS to move it off their shelves. So in a way Wizards of the Coast is profiting off of manufacturing bad products to the LGS which forces them to order less products since they can't turn a profit off of MTG products with terrible EV (Expected Value). This in turn forces the LGS to rely on card single sales, buylist orders, as well as food and drink in order to stay afloat.
I feel like you are making some assumptions without explaining them. Or you are assuming I know which products you are referring to. Can you elaborate?
"And here I was under the assumption that the LGS makes more money on card singles than Wizards of the Coast does with Secret Lair since they're technically not allowed to tap into the Secondary Market."
We don't know the sales figures for Secret Lair. I don't really get the comparison either.

"So why is Wizards of the Coast flooding the market with so many MTG products when it feels like a blatant attempt to pressure the LGS into selling products that have terrible EV (Expected Value)?" Which products are you referring to? How can WOTC 'pressure' LGSs into selling specific products. Don't consumers dictate what gets sold?

"The more bad products they release the more difficult it is for the LGS to move it off their shelves. So in a way Wizards of the Coast is profiting off of manufacturing bad products to the LGS which forces them to order less products since they can't turn a profit off of MTG products with terrible EV (Expected Value). " I don't get it. Do you think WOTC is trying to tank sales? Which products do you consider to be bad? WOTC only makes money by selling their products. Making bad products that stores cannot sell seems like a huge waste of resources. This is one conspiracy theory that I cannot grok.

This thread is largely about how we think WOTC has taken actions which will make it tough for paper magic to stay around. Nobody is saying that WOTC is trying to kill paper magic. Just that by being greedy and trying to maximize their profits by going direct, that they are squeezing Local Game Stores.

I am also saying that LGSs make 5-15% margin on sealed products, and often run events at a small loss or at break-even. The market is so competitive to get people to buy paper magic or to play in-store that it is not sustainable. Selling singles has become the only way for stores to stay afloat, whereas I used to know several stores that didn't sell singles at all.

I hope that WOTC will give better costs to LGSs and take other actions to make in-store play preferable to online play.
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Post by Card Slinger J » 4 years ago

Dunharrow wrote:
4 years ago
Which products are you referring to? How can WOTC 'pressure' LGSs into selling specific products. Don't consumers dictate what gets sold?
The MTG products I'm referring to are the non-Collectors Edition sets of Throne of Eldraine and Theros: Beyond Death where they're not worth as much as their Collectors Edition counterparts due to the increased pull rates of Mythic Rares, Foils, and Full-Arts. With the Collectors Editions having the same limited print run as Modern Horizons, the LGS will eventually be forced to sell the non-Collectors Editions at a loss due to the single variants being devalued from their Collectors Edition counterparts.
Dunharrow wrote:
4 years ago
We don't know the sales figures for Secret Lair. I don't really get the comparison either.
The reason as to why we don't know the sales figures for Secret Lair is because the cards haven't had a chance to enter the marketplace since they've been bought directly from Wizards of the Coast instead of a random online seller on eBay or Amazon. Since most of these cards end up in private collections we won't have the data until they re-enter the market once collectors are done with them.
Dunharrow wrote:
4 years ago
I don't get it. Do you think WOTC is trying to tank sales? Which products do you consider to be bad? WOTC only makes money by selling their products. Making bad products that stores cannot sell seems like a huge waste of resources. This is one conspiracy theory that I cannot grok.
Not so much trying to tank sales but by ramping up their products as a way to potentially prep Wizards of the Coast for sale by Hasbro. Either that or they're not hiring the right employees to do their job since they seem to be more focused on virtue signaling than actual talent. The products I consider bad are one's that are too underpowered in terms of power level. If they're overpowered it'd be enough to break Standard which explains why Modern Horizons was restricted to Modern in terms of format legality.
"Salvation is for those who are afraid of Hell. Spirituality is for those who have lived through it."

- Ralph Smart

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