Two Types Of Game Stores

Hobby game stores are the tip of the iceberg. They were once the whole iceberg, introducing new customers, catering to veteran customers, and acting as taste makers. They did it all. The store owner decided which game you would play, and publishers would do their best to place ads in magazines or show things at conventions to convince customers otherwise. The stores were never powerful, but they were strong influencers and with little competition, they grew lazy. Epically so.

Right now, hobby game stores are as numerous and prosperous as they've ever been. However, the hobby has grown so huge in the last decade, and the Internet such a powerful force, they struggle to remain relevant. I struggle to just keep up with customer demands, and only occasionally flex my muscles as taste maker.

This is not to say brick and mortar stores are dying or having problems, which is their natural state, it just means they're trying to find their position in the changing marketplace, where Amazon has steadily gobbled up game trade market share and now owns, what 80%? Who really knows. Many game stores are selling on Amazon with a, "if you can't beat them, join them" strategy. So stores struggle with how to approach this perilous new world, where the Internet dominates as a sales channel, with Amazon and direct to consumer sales being the primary means of commerce. It's such a powerful force, it not only drives customers to us, but they arrive with a different idea of how the games are played.

There are two primary strategies to stay relevant as a hobby game store, serve the lowest common denominator or serve the highest common denominator. When I say highest, I refer to the intense amount of retail work required to bring in new customers, expose them to a broad variety of games, and later watch them wander off to Internet sales once educated. It's game store ownership as parenting. It's time consuming, expensive, and only works because nobody big is dumb enough to try. It's the full spectrum, high capitalization approach.

Deciding on being the highest common denominator requires a serious capital budget, strong sales training, and a local market where this is possible. Most scorched earth regions, characterized by close to free real estate and a customer based trained to pick apart newcomers, need not apply. There is a strength to this model, but there's also the eternal question of, if you have enough money to do this right, why would you do it at all? When I mention the scorched earth issue with scorched earth store owners, they have no idea what I'm talking about. Scorched earth is the game trade in many regions. It would be like asking a convention of ice cream store owners to consider a world without refrigeration. Sucky stores exist to serve a sucky market.

The lowest common denominator is serving the most profitable customers right now. It's a supremely logical business model, unlike the high store. You identify the lowest hanging fruit, the maximum value for the least effort, and you serve that. You serve it all the time in every way possible. You don't invest in fancy fixtures or worry too much about Kickstarter or Dungeons & Dragons table acreage. Every D&D table of players is worth one Magic player, and you make no bones about it. You serve the beast that feeds you. I should mention a good LCD store is just as well capitalized and the owners just as smart and clever as the HCD store. They just satisfy different needs in the marketplace.

The lowest common denominator store serves Magic to Magic players in every Magic configuration imaginable. You have events for every format, you sell tons of singles and have a war chest of cash reserves for buying cards from customers that would make a marijuana dispensary nervous. Where the high road store spent a small fortune on fixtures, trained staff and diverse inventory, the low road store has a shockingly large collection of used cardboard. That other expensive stuff? It's just not necessary. That means lots of singles sold in store and online and deep discount pricing on sealed product because you're essentially selling a commodity item, like soy beans. If you could buy stock in Lifetime Products, Inc., you would. You are not concerned with margin, only the market price.

Both models work. However, imagine if you were trying to grow your market as a publisher. Do you want the image of where your game is played to be that of a dirty den of dudes or a professional enterprise that welcomes all new people? Do you want to be associated with a pawn shop or Neiman Marcus? You created the marketplace where the dirty dude model worked best, but you no longer need them to sell things, just act as an onramp to your hobby game. Your own child is a delinquent and now that they've grown up, you're tired of them hanging out at your house, eating your food.

The game trade is headed in a direction that rewards the highest common denominator store because publishers are primarily interested in image, not sales volume from this increasingly insignificant sales channel. The ability of a store to sell lots of a product is literally none of a publishers business, other than knowing people come to buy it there. Supporting stores is just a marketing expense now, not a requirement for economic survival, and nobody wants to spend money on representing a poor image. It does not mean the high stores will get any sort of real sales benefit, any guarantee of meat on the bone, but when there are bones thrown, they'll get them first.

We are at the point where there is a push to transform the lowest common denominator stores into something more presentable, while rewarding highest common denominator stores with perks to help showcase publisher brands in these locations. Again, sales are irrelevant other than a marketing indicator. Is it financially feasible to transform your store? Even a very good store might spend thousands of dollars to attain what's considered great, but will it result in stronger sales? Not necessarily, and although that might be the store owners goal, it's not the goal of the publisher.

Will customers appreciate the change. It turns out the answer is sometimes. The stores that catered to the hardcore Magic crowd most effectively are not usually the stores being rewarded in this new paradigm. Some hardcore customers, catered to by the lowest common denominator stores, are angry and resentful that these "Magic light" stores are getting bones. Sure, the casual players at the high road stores enjoy tablecloths and shiny trash cans, but they're not buying more because of it.

There's two points I want to make about this mismatch between hardcore players and high road stores. First, when someone is truly angry about a business, it means they need them. They want it one way, but it's the other. When a grognardy Magic player is resentful a product or event is being held by the high road store, that's a sign that stores strategy is working. They are needed and it rankles the mercenary customer. This was once reserved for pre releases, where I would see the once a quarter customer scowl at me for existing. How dare you offer something exclusive I need, you sell out.

Second, if you're playing a game from a publisher who doesn't seem to align with your interests, maybe it's because you no longer align with theirs. Maybe your mercenary nature means you'll find your way in the marketplace regardless and you no longer need to be served to such a high degree. Perhaps you've graduated. Perhaps the penalizing of the low road store and reward of the high road is a signal to the customer base that it's time to grow up.