MTG Events: Keeping up with the Exchange Rate

In March we announced raising the price of Magic: the Gathering Booster Packs in a post called Magic and the Canadian Dollar.  In that article, we described the current situation that the US – Canadian Exchange Rate created for stores trying to sell Magic.  If you haven’t read that article I would encourage you to do so.  It explains the reality of trying to sell Magic in a competitive environment, when faced with sharp increases in cost.

MTG PricesWe also announced that we wouldn’t be changing the price of events yet, but that in time we would look at events and make appropriate adjustments.  Events needed reform, but we decided to wait because we didn’t want to change too much too quickly.  It has been more than seven months since we adjusted our price on packs, and the time has come to address events.

The response to how we handled the increased prices last time was overwhelmingly positive, so just like then we will do our best to be honest and transparent about the challenges and realities of pricing events.  We encourage our customers ask us questions about anything that seem off.  We want to hear your feedback.

After closely examining the current state of our events we have decided to raise the price of most Magic events going forward.  This likely doesn’t come as much of a surprise to many given that the price of events is largely based on the number of booster packs we give out, and that we have already raised the price of booster packs to account for the increased cost.  Throughout the rest of the article we will do our best to explain the changes, and the reasons that we have settled on the new prices.

MODERN WEDNESDAYS & STANDARD FNM

Our weekly Modern and Standard Events will be going up to $8.00 ($7.00 for Stronghold Members).

This is a two dollar increase.  The prize pool (1.5 Packs/participant) will stay the same.  As with all events we base our prize payout on the full entry fee, so when calculating value, we will ignore the Stronghold Members price (member discounts are a perk of membership).  Our guideline is to put 100% of the entry fees back into the prizes and giveaways.  With packs being $4.99, the 1.5 packs per participant that we put in to the pool has a value of $7.49.  In addition to those packs we give boosters in random draws at the end, and for well as  Hero’s Rewards for bounties to those that defeat last week’s undefeated players.  We also often add a pack or two to the prize pool to help balance that out.  Overall these extra promos and giveaways adds up to an average of about $1 per participant, putting the total value of the items in the prize pool at between $8-$8.50.

When you also account for the fact that we cover the tax on events, this saves each player almost another $1.

BOOSTER DRAFT FNM

Our weekly FNM Booster Drafts will be going up to $20 for all participants.  Stronghold Members will get a free Hero’s Reward for participating every week.

For the past seven months we have been losing $1.60 on every single participant at each draft.  That means that on our average FNM we were paying the players $56.00 for the right to give away packs.  This is obviously not a sustainable model for the store to stay in business.  With costs the way they are we should actually probably raise the price of drafts to $23 or $24, but there is a value to having so many people opening packs in our shop, which makes us comfortable leaving our Booster Drafts as the least profitable events we run.

sm BK Playing CardsThis is a big increase, and seems even bigger compared to Modern and Standard events, but the increased cost of each pack is multiplied by even more packs per player.  All participants get 3 booster packs in a draft, and then we add an additional prize pool of 1.5 packs per participant.  Each participant adds 4.5 packs to the overall expense of the event.  To buy 4.5 packs at Black Knight Games would cost you about $21.50 + tax (3 Packs for $14 + 7.49 for 1.5 packs) for a total out of pocket expense of $24.30.  Even under the new pricing, drafting is a deal.

The bonus Hero’s Reward will give our Stronghold Members another great perk because they can be used a number of different ways, including getting free drafts.  Under the new system a Stronghold Member could get a free event after only six events played (that’s better than a Subway card!).  This also means that instead of only getting Hero’s Rewards at pre-release events, you’ll be able to earn them weekly, giving more players access to the cool promotion.  Now you can get a Hero’s Reward at any regular limited event at BKG!

Is this increase just a way for the store to make a bunch of extra money?

Stores cannot stay open without income.  That being said, we at Black Knight Games have always taken the approach that running events is important to drive enthusiasm for the games we sell.  To that end it has been our policy to not overcharge for events.  We always put at least as much into the event as is paid for it.  This means that if ten players each paid $10 to play in an event we would put at least $100 in value back into that event in the form of giveaways, prizes, or other expenses like food or trophies.

Black Knight Games dedicates more than half of our store space to gaming area.  That’s a huge portion of our rent!  We pay for additional staff to run and plan events.  We pay for equipment like chairs, tables, food prep utensils and equipment, a water-cooler, and we replace these items when they are broken or used up.  That is our business model; we want gamers to game, and have a great experience.  So we do not take an additional stipend from events.  That being said, we endeavor to not lose money on events, and to make them comparable to any other purchases in the store.

When will this change occur?

This price adjustment is effective as of today.  We waited until after the Battle for Zendikar prerelease to implement these changes, but the time has come to do so.

What about other events, will they change as well?

Most other events in the store, be they miniature games like X-Wing or Warhammer, or even other MTG events like our Saturday Night Legacy event, follow a store-credit reward structure.  This means that the prize & price are always in sync, so they do not need a change at this time.  It is largely because of the raised price of booster packs – which is what the prize pools are based on in Magic – that we have had to make these adjustments.  Special events like PPTQs and Prereleases are all priced as we plan them, so there is no need to announce any changes to these events since they are infrequent, and will be going forward on a one-by-one basis.

I’m still not sure about this, and would like to share my thoughts about it.  How do I do that?

You can either Facebook message, email, or talk in person with either Jay or Tim (info [at] blackknightgames [dot] ca).  We understand that this will be a tough transition for some.  Paying more for something is never fun, and we completely understand where our customers are coming from – after all we’ve been paying more for boosters for almost a year!  We love getting feedback, especially constructive feedback.  Most of our best ideas have come from hearing from our customers, so we thank you in advance for your input.

Profit Bars

As you can see from this graph the old system (blue) was not consistent in how it priced all events when considering the cost. The new system (red) makes for a much more even and consistent price-value ratio not just for these events, but when compared to purchasing items in the store as well.

 

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