Thank you all for your patience while I moved. I have a pile of administrative catch-up to do for LGS Net Income, and that will happen over the next couple of days. In the meanwhile I wanted to get the Monday Meditation article up a mere 48 hours behind schedule, so here we are to do some analysis from the comfort of my new home office in beautiful Gilbert, Arizona. Join me for a beverage, won’t you?
Last week’s article, The Worst Product in the Hobby Game Industry, was received extremely well. As the Xwitter world would say, it “did numbers,” relatively speaking. The audience for this Substack is niche, of course, but it grew by the most subscribers, both free and paid, that it has for any article I’ve ever posted. That definitely got my attention. (Good thing I got tied up moving and didn’t get this article up days ago to capitalize on that momentum, right?)
Something I did in that article that I plan to try to do for most paid-exclusive articles is offering some free and valuable analysis above the paywall for everyone to read, and reserving the clutch material and the main lede for after. I’m going to do something a little like that here, addressing questions about the three runners-up to worst product, which I posted above the fold in the free section.
Those were, for a refresher:
Streaming IRL Friday Night Magic and other paper TCG events;
NFTs; and,
Local independent tournament circuit sponsorship/hosting.
Reader Sean J. asked, “If they are as bad as you say they are, why do you think so many stores stream and run circuits? Do you think there's some sort of broader UVP that we're not seeing? Or do you think it's something more simple like a customer asked us to do this so we just did it.”
Reader Jarred J. observed, “[T]he 3rd answer (hubris/ego) is the real answer IMO[.] I'm in a saturated market and plenty do it here, just because the store owners are AV nerds and like seeting things up. Not because they get views or vods.”
Reader Chris B. messaged, “[Are] stores trying to use AI just falling for the same trap as NFTs were? And the [redacting the reference to the worst product itself, which was in the paid-exclusive section] as well, it smells like directionless business owners hoping that something companies are doing in the broader market can be copied whole hog into the niche hobby game market.”
These are excellent questions to be asking next, because the analysis, no matter how confident we might be about it, is always subject to a reality check. I’ve made a case for why they’re bad (see linked article above), so we follow asking, okay then, if that is so, why do so many stores do them anyway? (And Sean, Jarred, and Chris are essentially correct in their guesses, but I’m going to expand on them a bit here.)
The simple, and also charitable, explanation for stores still doing those things even though they’re not good, is that so many store owners “ascended” from the ranks of players, and they are doing what seemed cool to them from their player-oriented vantage points. This can be reinforced if their actual players are clamoring for it. We see this all the time in our industry, of course. For example, how many neophyte owners have to be taught not to get high on their own supply?
Importantly, this coolness factor is not without value. Particularly the streaming and the tournament circuits can outperform their underlying awfulness, for a limited time at least, because people do get enthusiastic about things they think are cool or cutting-edge. Hype can sell. It just doesn’t sustain, and in unfortunate situations, you end up wishing you had back the resources you deployed into the hype.
The altitude take on this aspect of the answer is a mistaking of correlation for causation. A store might think, “I participated in the Citywide Magic Legacy Series and had a few Saturdays with a full shop and made some sales, what do I care for some nutjob with a Substack telling me it didn’t work? It obviously worked!” They are correct that some sales activity came along with having some draw from the tournament event. What they are missing is something I want to remember to mention more often here at LGS Net Income, which is, “Compared to what?” And what we know from experience in the industry is that there were other uses of promotional resources that would have generated just as many arrivals or more, and would have led to more sustainable customer business, and without some of the particular negative externalities that come from the third-party series (broadly enumerated in the previous article). To give only one such example, an ordinary product sale on a small product line or subcategory or even a clearance checklist, efficiently executed, will typically earn the store far more than a Saturday with tables full of mercenaries. Or to keep it in the event-draw realm, putting resources into a casual event would very likely have led to more revenue.
Another reason stores go back to these wells when they aren’t great sources of refreshment is that this industry often affords small-scale owner-operators scant opportunity for deep data-driven analysis. They had players clamor for them to do the thing, they did the thing, the store isn’t bankrupt yet, so the thing must have worked, this must just be a new thing that must be done for ongoing business. It might be a while, if ever, before they really delve into the results, if they even have enough good data to do so, such as from a POS system that provides comparison-ready metrics. This is a bit of a convoluted way of saying “they don’t realize how much it actually sucks” but I’m trying to present this through the nuanced lens of understanding: No business owner wants to fail, and it’s often difficult in the moment to feel like you have enough good information on hand to make decisions, so you have to make educated guesses based on spot impressions.
Jarred hit upon another big factor in regard to the streaming thing. Whether the store thinks the stuff will get watched or not, everyone wants in on the yootoobs and the twitchities. The sheer volume of video streamed today in the modern era is mind-boggling. I mentioned in the original article that people naturally feel like the cutting edge is broadcast streaming and so they want their brand to be in that space, but on an even deeper level than that, they are tapping into the same dream-chase attention impulse that has existed since the dawn of media. Before thirst traps wanted to “do cute little dances” on the tick tock for the amusement of the CCP, kids wanted to play with slimes and unbox action figures on YouTube. Before that, amateur Kevin Smiths wanted to film schlocky short stories to upload to Metacafe, Vimeo, and Shockwave. Before that, teens formed garage bands and tried to get their new tape featured in edgy local ‘Zines. Before that, as Paul Graham put it, “eggheads and communists” camped out on public television, preaching to their brethren courtesy of Fairness Doctrine airtime. Before that, academics and curmudgeons assailed each other through the Letters to the Editor of the half-dozen local newspapers in town. You get the picture. There is a compelling urge for an LGS to stream something, anything, whether it results in any business benefit or not.
Chris’s point of the adaptation from other markets is also important to look at, because our industry has a stubborn tendency to be as contrary as possible, and yet many of the advancements we make on processes, marketing, or technology, are prompted by doing exactly that: taking something we see done in another industry or market and seeing if there’s a way to make it work for us. This is an item I haven’t done enough deep analysis to truly conclude, but my hypothetical is that we try all the big flashy things that are happening elsewhere, and they rarely amount to anything, but when we try the dry, boring, behind-the-scenes process wonkery, a lot of times we find that it works, and we quietly update our internal best practices, and that’s as much as anyone notices. To give an example of this, many stores have gone to cloud-based personnel scheduling, timecarding, and payroll services like Connecteam, Workforce, and Sling. It didn’t make news or anything, but it quickly and quietly spread across our industry like a virus, and now almost everyone is using those tools if they have a staff of more than two or three people. So the mundane adaptation worked, while the “cutting edge, next-generation” adaptations have had a more spotty track record, and more visibly so.
Alright then there’s some follow-on analysis for you all to chew on, more goodies coming in the days and weeks ahead! Hope you enjoyed your beverage!