Wizards Keep Games Goes Out of Business or Why You Shouldn't Open a Local Game Store

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Post by Card Slinger J » 4 years ago

https://www.reddit.com/r/magicTCG/comme ... _see_this/

So for those who don't know Wizards Keep Games was a really popular LGS for Wizards of the Coast employees especially on Tuesday nights for EDH / Commander. This was the shop Sheldon Menery played at, when he was in Seattle for his project with Wizards of the Coast. The sudden news of this closure will certainly impact Wizards of the Coast employees since they live right next door though probably not the employees that made decisions like Secret Lair.

The owner of Wizards Keep Games firmly believes that the Secret Lair distribution model is final proof that Wizards of the Coast is in the process of cutting the Local Game Store (LGS) out of the loop entirely, and has decided to sell up before his business goes bust as a result. The problem is that players want the best prices and don't care about what goes into the LGS. Running a Local Game Store is a labor of love.

If the LGS disappears then it will negatively affect the players. Kitchen Table will still be a thing but meeting new players will become increasingly difficult without getting in trouble with someone's parents. People will use the excuse of "There's no real point of going to an LGS for most adults looking to play Magic" when that isn't true at all. Magic isn't just for adults it's for people of all ages (well almost since they'd be better off starting with the Pokémon TCG).
Last edited by Card Slinger J 4 years ago, edited 2 times in total.
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Post by pokken » 4 years ago

Yeah I think we are going to be entering a stage of consolidation in the LGS market. I wouldn't be surprised to see it end with one of the big ones going out of business and a pretty major shakeup as a result.

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Post by RxPhantom » 4 years ago

Cutting local game stores out of the supply chain is unacceptable to me, and I'd quit Magic before supporting WotC/Hasbro in such an undertaking. Local game stores played a huge part in why the game is as massive as it is today, and to hobble them and leave them to die is unconscionable.

tl;dr: %$#% Secret Lair and everything it represents.
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Post by Card Slinger J » 4 years ago

I recently discussed this with one of the LGS Owners at A-Z Comics and she told me that it won't have as much of an impact on her store due to how small it is. Even though her store has been supporting Magic for nearly 27 years she also sells comic books for Marvel and DC as well as graphic novels. The other LGS I go to is Game Cafe which has been in business for 12 years where they also focus on tabletop board games not just Magic.

Look I think we can all agree that Secret Lair is as much of a mistake as the Reserve List though I think their intention with it was to help Magic players who don't have access to an LGS in their area. While it might sound good for that niche demographic of Magic players who despise the LGS for it's faults it also invited it's own set of problems along with it as well. Problems that mostly affect those who are still fortunate enough to have access to an LGS as opposed to those who don't.
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Post by Atraxian » 4 years ago

Card Slinger J wrote:
4 years ago
Look I think we can all agree that Secret Lair is as much of a mistake as the Reserve List though I think their intention with it was to help Magic players who don't have access to an LGS in their area.
I really doubt that was WotC intention.
They just saw that they can directly sell at retail price cutting away all intermediaries and basically doubling or tripling their revenue on products.
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Post by Card Slinger J » 4 years ago

Atraxian wrote:
4 years ago
Card Slinger J wrote:
4 years ago
Look I think we can all agree that Secret Lair is as much of a mistake as the Reserve List though I think their intention with it was to help Magic players who don't have access to an LGS in their area.
I really doubt that was WotC intention.
They just saw that they can directly sell at retail price cutting away all intermediaries and basically doubling or tripling their revenue on products.
By publicly acknowledging the Secondary Market which is grounds for a pending lawsuit against them by the U.S. Government.
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Post by SquirrelToken » 4 years ago

Card Slinger J wrote:
4 years ago
By publicly acknowledging the Secondary Market which is grounds for a pending lawsuit against them by the U.S. Government.
Oh? If you've got more info on that I'd love to see it. I hadn't heard anything about legal action, and I'm quite curious what the basis for that would be.

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Post by Ulka » 4 years ago

SquirrelToken wrote:
4 years ago
Card Slinger J wrote:
4 years ago
By publicly acknowledging the Secondary Market which is grounds for a pending lawsuit against them by the U.S. Government.
Oh? If you've got more info on that I'd love to see it. I hadn't heard anything about legal action, and I'm quite curious what the basis for that would be.
Its part of the whole lootbox issue of if you acknowledge value may vary per pack it is considered gabmling and then the card game must become 18+. I hadnt heard of any pending lawsuit as wizards has stated they dont take the secondary market into consideration when printing and designing but there very well could be.
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Post by Atraxian » 4 years ago

I doubt the Secret Lair products will face any kind of legal issue, they aren't much dissimilar from the From the Vault and the Spellbook products and for all we know, WotC didn't have issues with those.
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Post by Card Slinger J » 4 years ago

Ulka wrote:
4 years ago
SquirrelToken wrote:
4 years ago
Card Slinger J wrote:
4 years ago
By publicly acknowledging the Secondary Market which is grounds for a pending lawsuit against them by the U.S. Government.
Oh? If you've got more info on that I'd love to see it. I hadn't heard anything about legal action, and I'm quite curious what the basis for that would be.
Its part of the whole lootbox issue of if you acknowledge value may vary per pack it is considered gabmling and then the card game must become 18+. I hadnt heard of any pending lawsuit as wizards has stated they dont take the secondary market into consideration when printing and designing but there very well could be.
When they distribute individual single cards direct-to-consumer themselves instead of through sealed product that's randomized by cutting other distributors from the supply chain, given the choice of reprints made in Secret Lair they are publicly acknowledging the Secondary Market because they know how valuable the cards they're reprinting are. Wizards of the Coast / Hasbro is losing money on sealed product because of how the LGS is making profits on card singles.

They know that Bitterblossom sells for at least $40 so why have someone sell it at their LGS to make a profit on when they can make the money themselves online? Reaper King and Sliver Overlord are also valuable cards on the Secondary Market. Do you think it was by mere coincidence that Wizards of the Coast / Hasbro sold these cards online to individuals through Secret Lair without even knowing their market value?
Atraxian wrote:
4 years ago
I doubt the Secret Lair products will face any kind of legal issue, they aren't much dissimilar from the From the Vault and the Spellbook products and for all we know, WotC didn't have issues with those.
Except you could still purchase From the Vault and Spellbook products at your LGS and your local Walmart / Target at the time it was available. Secret Lair cards are only obtainable online for those who are able to purchase through the 24 hour window before the sale ends. After that anyone who has access to the cards can sell them at their LGS to help flip money on them or increase their value depending on how many copies are circulating on the Secondary Market.
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Post by SquirrelToken » 4 years ago

Card Slinger J wrote:
4 years ago
When they distribute individual single cards direct-to-consumer themselves instead of through sealed product that's randomized by cutting other distributors from the supply chain, given the choice of reprints made in Secret Lair they are publicly acknowledging the Secondary Market because they know how valuable the cards they're reprinting are.
Yes, I get that part. I'm looking for a link to the pending lawsuit that you mentioned, because opening themselves up to accusations of gambling is one thing; an actual pending lawsuit is a horse of a different color.

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Post by Guardman » 4 years ago

While I don't have any personal insight on Secret Lairs affecting LGS, I will say that I do know that the changes that WotC has enacted has negatively affected LGS.

The LGS right by my house closed at the end of October. It was easily the best, friendliest, and most honest place I've ever played at. Being five minutes from my house didn't hurt either. Two months later and the lost still stings.

Now I'm not going to say it was all or mostly Wizards changes for causing the closing. I do know a huge part of it was the amount of time running a LGS took and him wanting to spend more times with his wife and kids. But just from talking to him I know his decision was made a lot easier due to not only changes from WotC, but also how bad the distributors for LGS are. I heard several times from talking to him how hard it was getting for him to get enough boxes of magic cards, let alone any specialty products. There would be events where either the format had to change to Chaos Draft (using whatever boosters he had in the store) or giving out store credit/IOU's on prize packs because they either didn't send his full shipment or canceled a part of his order because they didn't have enough product to send him (Plus it was comical how often he just got sent the wrong items). And with the limited run specialty products he would order a bunch through the distributors, have his order guaranteed, start taking pre-orders, only to have the amount he was ordered reduced at the last minute due to not enough supply. In the letter he sent out he specifically mentioned how horrible he felt having to cancel people's pre-orders at the last moment like that as a reason why he was closing.

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Post by Aazadan » 4 years ago

Ulka wrote:
4 years ago
Its part of the whole lootbox issue of if you acknowledge value may vary per pack it is considered gabmling and then the card game must become 18+. I hadnt heard of any pending lawsuit as wizards has stated they dont take the secondary market into consideration when printing and designing but there very well could be.
This seems unlikely. The lootbox issue is different and it comes down to the definition of gambling in the US (note that different countries define gambling differently). In the US a game of chance is considered gambling is the prize payout varies based on the number of participants. So for example, if 50% of every entry is placed in a prize pool, then that is gambling. If on the other hand there's an up front prize table (see GP payout structures), even if there's different tables for different participant ranges, and that this holds no matter how many people are particpating, then it is not gambling. Beyond that, you start getting into definitions involving lottery and game of chance.

But, I don't see how Secret Lair recognizes any sort of secondary market. Because they're not reselling cards, they're still selling a product presumably to those who want it.

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Post by Mapccu » 4 years ago

I don't disagree that magic owes much of its early success to free advertising via LGS (it's in the LGS's best interest to advertise products anyway). I'm not trying to downplay what the LGS has been to magic in its past.

I firmly disagree that WOTC owes ongoing financial servitude to the LGS. They are responsible for themselves first and foremost, not the thousands of mom and pops that didn't diversify their customer base or product offerings. I don't believe they are obligated to support these businesses when it's losing WOTC money. If it's continuing to make money, even if it's not the most lucrative channel, they will continue to do so - as long as the more lucrative channels are at capacity.

This brings up an important point. They should be pursuing, wholeheartedly, every channel in order of descending value, assuming all other factors held constant. If the LGS no longer fulfills the top role, you pivot resources elsewhere. It's business 101 (maybe 102 lol). We're seeing this with direct to consumer, digital, and the larger supply chain giants getting slices of the pie that were previously monopolized by third parties like channel fireball or the LGS community.

The game is moving towards a digital era, and you'd be kidding yourself if you didn't see this coming when they brought on the current CEO. Hearthstone blindsided MTG and it's really embarrassing they let someone into this space like that. There was recently an article on MTGgoldfish talking about this trend towards digital. The product offerings, competitive pathing, and market research they've alluded to all support this move.

For those of you touting legal action against WOTC; I'm skeptical many of these will even gain minimal traction.. Even if a suit is filed, it'll most likely sputter out in its infancy because these arguments rarely hold water. I mean selling direct to consumer is not them acknowledging the secondary market, it's them taking a product direct to consumer like every other major retailer has been doing for the last several decades. I can order sleeves from ultra pro directly...does that mean they're bullying Star city games out of business? You can tie the argument to pricing, but they've been very smart to not offer direct reprints. It's collectible versions with unique printings (secret lair or the special full art walkers with boxes) - these are unique products with no direct secondary market counterpart. Yes there are multiple versions of bitterblossom, this is the only one of this version.

Does it suck to see someone's livelihood dry up? Of course. Do I wish everyone could be successful in business? Of course I do. Is that reality? No. Do I want this game to enter into the next stage of its life cycle or event reinvent itself for another large surge of players? Absolutely.

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Post by JaceBluesMaster » 4 years ago

Card Slinger J wrote:
4 years ago
Ulka wrote:
4 years ago
SquirrelToken wrote:
4 years ago


Oh? If you've got more info on that I'd love to see it. I hadn't heard anything about legal action, and I'm quite curious what the basis for that would be.
Its part of the whole lootbox issue of if you acknowledge value may vary per pack it is considered gabmling and then the card game must become 18+. I hadnt heard of any pending lawsuit as wizards has stated they dont take the secondary market into consideration when printing and designing but there very well could be.
When they distribute individual single cards direct-to-consumer themselves instead of through sealed product that's randomized by cutting other distributors from the supply chain, given the choice of reprints made in Secret Lair they are publicly acknowledging the Secondary Market because they know how valuable the cards they're reprinting are. Wizards of the Coast / Hasbro is losing money on sealed product because of how the LGS is making profits on card singles.

They know that Bitterblossom sells for at least $40 so why have someone sell it at their LGS to make a profit on when they can make the money themselves online? Reaper King and Sliver Overlord are also valuable cards on the Secondary Market. Do you think it was by mere coincidence that Wizards of the Coast / Hasbro sold these cards online to individuals through Secret Lair without even knowing their market value?
Atraxian wrote:
4 years ago
I doubt the Secret Lair products will face any kind of legal issue, they aren't much dissimilar from the From the Vault and the Spellbook products and for all we know, WotC didn't have issues with those.
Except you could still purchase From the Vault and Spellbook products at your LGS and your local Walmart / Target at the time it was available. Secret Lair cards are only obtainable online for those who are able to purchase through the 24 hour window before the sale ends. After that anyone who has access to the cards can sell them at their LGS to help flip money on them or increase their value depending on how many copies are circulating on the Secondary Market.
WotC did not sell singles in any of the Secret Lair drops. Each box had multiple cards. Yes, Bitterblossom was walking that fine line but the box also included 4 tokens, each with unique art that ties in with the Bitterblossom's art. Also, each of those boxes contained a special, foil, stainedglass Planeswalker, which muddies your argument even more.

The fact that these boxes are sold directly from WotC is not an issue. It is distasteful and bad for local stores (and distributors) but it is not illegal or a bad business practice to do so (given that they are cutting the distributors and local stores out of the picture means WotC is gobbling up a healthy profit). The limited window of availability is used by lots of other companies to drive up sales. It is shady and not cool but is a tool that many companies use quite successfully.

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Post by JaceBluesMaster » 4 years ago

Mapccu wrote:
4 years ago
I don't disagree that magic owes much of its early success to free advertising via LGS (it's in the LGS's best interest to advertise products anyway). I'm not trying to downplay what the LGS has been to magic in its past.

I firmly disagree that WOTC owes ongoing financial servitude to the LGS. They are responsible for themselves first and foremost, not the thousands of mom and pops that didn't diversify their customer base or product offerings. I don't believe they are obligated to support these businesses when it's losing WOTC money. If it's continuing to make money, even if it's not the most lucrative channel, they will continue to do so - as long as the more lucrative channels are at capacity.

This brings up an important point. They should be pursuing, wholeheartedly, every channel in order of descending value, assuming all other factors held constant. If the LGS no longer fulfills the top role, you pivot resources elsewhere. It's business 101 (maybe 102 lol). We're seeing this with direct to consumer, digital, and the larger supply chain giants getting slices of the pie that were previously monopolized by third parties like channel fireball or the LGS community.

The game is moving towards a digital era, and you'd be kidding yourself if you didn't see this coming when they brought on the current CEO. Hearthstone blindsided MTG and it's really embarrassing they let someone into this space like that. There was recently an article on MTGgoldfish talking about this trend towards digital. The product offerings, competitive pathing, and market research they've alluded to all support this move.

For those of you touting legal action against WOTC; I'm skeptical many of these will even gain minimal traction.. Even if a suit is filed, it'll most likely sputter out in its infancy because these arguments rarely hold water. I mean selling direct to consumer is not them acknowledging the secondary market, it's them taking a product direct to consumer like every other major retailer has been doing for the last several decades. I can order sleeves from ultra pro directly...does that mean they're bullying Star city games out of business? You can tie the argument to pricing, but they've been very smart to not offer direct reprints. It's collectible versions with unique printings (secret lair or the special full art walkers with boxes) - these are unique products with no direct secondary market counterpart. Yes there are multiple versions of bitterblossom, this is the only one of this version.

Does it suck to see someone's livelihood dry up? Of course. Do I wish everyone could be successful in business? Of course I do. Is that reality? No. Do I want this game to enter into the next stage of its life cycle or event reinvent itself for another large surge of players? Absolutely.
One thing to note with Hearthstone, however is that it became a HUGE hit but has slowly (but inexorably) declined in popularity, which actually puts it in the same league as so many other flash in the pan TCG/CCGs that have burst onto the wscene, then died shortly there after. The worry with MTG is that Hasbro will change the whole game to revolve around Arena. Then, quite suddenly, something will happen and there will be a mass exodus from Arena. Then we, the MTGO and Paper players, will be left to pick up the pieces of the shattered game. :sweat:

At any rate, you can look at other game companies like Games Workshop, Privateer Press, Corvus Belli, FFG/Asmodee, Nintendo/Pokemon, etc. They all sell their product directly to the consumer. The fact that WotC or Hasbro does not sell all of their MtG products on their own website is actually an oddity.

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Post by Hermes_ » 4 years ago

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Post by Card Slinger J » 4 years ago

Not every struggling LGS has the opportunity to find a new owner to continue staying in business. Such was the case for one I remember that was located on a really bad intersection on the highway to get in and out of. The location was small enough within the plaza that the likelihood of getting mugged was really high. It was only run by two people at the time where they weren't making enough money to pay for overhead and other costs such as events.

Even though they had an online presence with their own e-commerce website their inventory for MTG and other Trading Card Games / Collectible Card Games were severely low. Most of the card singles they were selling was for the Dragon Ball Super CCG by Bandai while they did have singles available for MTG, Force of Will, Pokémon, and Yu-Gi-Oh! that just weren't selling. Something about the place felt unprofessional which was kind of a big turn off for me.

Later I find out that they went out of business as the owners went to other LGS's to help promote Alter Reality Games' new TCG / CCG Argent Saga which felt dead on arrival like most other discontinued TCG / CCG's that didn't stand the test of time. I think that's why there's been this recent push for Digital Card Games where they don't want to put in the time, effort, and resources for Paper equivalents thinking that it won't sell at an LGS when it would If given the chance.
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