Fixing the Grand Prix Problem

In my last article, I raised some concerns over the lack of consumer-friendliness of some of the business choices being made by Wizards of the Coast. In my conclusion, I expressed hope that WotC would make future business decisions with customer retention as a bigger goal than just maximizing profits in the present. I was gratified to see many readers echoing my sentiments and, I hope, finding it cathartic to see some of their own frustrations in print.

Some readers expressed a desire to see me suggest solutions to these supposed problems. In many cases—mythic rares, Magic Online, Modern Masters, and so on—it’s too late. The damage has been done, and there is nothing to be done but hope that Wizards will stop doing things along those lines in the future. To be clear, as far as I’m concerned, WotC can make as many cool support products as they want at whatever prices they want: novels, sleeves, deck boxes, score pads, tee shirts, special cards that aren’t tournament-legal, sports cars, custom Kool-Aid, or whatever. These are things that are optional for their customers, and players can spend their budgets on them as they see fit. My area of concern is with cards and events. Magic is a competitive game, and I hate to see the dollar price of winning constantly rising without equally raising incentives to keep investing higher amounts of money on an ongoing basis.

This brings me to an ongoing problem I cited that can definitely be solved: Grands Prix. I originally titled this article “Fixing Grands Prix,” but I decided that might suggest this was a whistleblowing piece about some kind of grand cheating conspiracy. Instead, the problem is much more mundane: economics. While I won’t pretend to have some sort of PhD in economics, I believe this to be a rather straightforward problem with multiple potential solutions that would be reasonable for Wizards to adopt.

The Problem

GPs typically have around a thousand players and can range from five hundred to four thousand players. With an entry fee of $40, that means taking in around $40,000 in entry fees for a typical Grand Prix. So, a prize pool of $30,000 seems perfectly reasonable. If entry fees were the only source of income, $30,000 would even seem overly generous given the costs for the site, judges, and so on. A typical Grand Prix probably has around ten dealer tables, and the price for one is probably at least $2,000 each at this point. That $20,000 covers the outlay for Grand Prix expenses—unless you’re trying to hold it at the Taj Mahal or some other opulent site. There is a reason so many Grand Prix Bostons are held in places such as Worcester, Massachusetts instead of actually in Boston proper, where site costs for an event hosting thousands of people dwarf those outside of the city. Add on the ability to generate further profit through selling food to a captive audience of a thousand people, and suddenly, that $30,000 prize pool seems to be easily justified.

There are multiple problems, though:

Emrakul, the Aeons Torn
  • Many GPs have way more than a thousand players.
  • Wizards wants to avoid anti-gambling laws that might apply if they have a prize pool based on attendance.
  • Wizards would like to have being a professional player as something to aspire to, and traveling to GPs is part of the chase for Pro Points; yet, the pot odds are staggeringly bad for nonlocal players.
  • Wizards isn’t directly profiting from most big GPs; tournament organizers are.

WotC seems to take a less-than-intuitive approach to solving these problems. Their approach seems to be that these events aren’t designed to be so large and it’s not their fault if they are. They intend GPs to be big, exciting events for local players rather than exciting events to travel to. This line of thinking was demonstrated when, rather than increase the prizes at GPs, they increased the number of GPs. This helped nontraveling players by increasing the frequency of local GPs for each player, and it hurt the traveling player by increasing the number of nonprofitable events to pursue points at. If they only gave away money and Pro Tour invites and not Pro Points at GPs, this approach might even work, with attendance shrinking to levels more appropriate for the prize pool and comprised mostly of local players.

The question is: Why would they want it to? Why wouldn’t you want these promotional events to be spectacles of epic proportions? Smoothly and professionally-run spectacles, of course, but why not try to set attendance records every time? Unfortunately, this approach of making big events small is very much in line with WotC thinking on high-level organized play. In 2011, they experimented with having a Grand Prix at the site for Pro Tour Paris, and they had a then-record turnout of two thousand one hundred eighty-two players. It was immediately decided that GPs at PTs weren’t a good idea. In fact, they proceeded to go so far in the other direction that they have stopped holding public events at Pro Tours completely, with current Pro Tours even closed to spectators.

Much of this is about economics, of course. Professional-level events are currently a marketing expense for Wizards. The bulk of the profit from most big GPs are going to independent event organizers, while Wizards absorbs much of the expenses. With Pro Tours closed to the public, they don’t directly generate any revenue for anyone. As a result, it’s a constant battle at Wizards between the advocates of a strong, well-compensated professional circuit and the people in charge of riding herd on the marketing dollars flowing out of WotC/Hasbro’s coffers.

There are multiple perfectly viable ways to solve the problem of having a prize pool at GPs that’s not appropriate to the numbers of players who are showing up at them.

Solution 1

The simplest solution would be for Hasbro to look at the profits pouring in from Magic and decide to loosen the purse strings of WotC’s marketing budget in an effort to keep the game’s massive popularity rolling and hopefully increase it even further. The problem comes from an inability to be able to draw concrete, easily-provable correlations between professional play and Magic’s record profits when trying to accomplish this solution. The surest way to test this correlation would be to do away with high-level events and see what happens, but fortunately, no one at Hasbro appears to be that crazy (yet!). This leaves making dramatic improvements to high-level play as the only other way to gain more data, but in a sad catch-22, that probably won’t happen without better and more compelling data.

Solution 2

If it weren’t for concerns about gambling laws in various Grand Prix locations, WotC would solve the problem by making prize pools that scale upward from $30,000 based on attendance. The way to get around this would be to scale them in advance based on the attendance at each previous Grand Prix. While it might seem weird to have a huge prize pool at a thousand-person event because the previous event had four thousand people, the problem (if you consider it one) would be self-correcting. If you knew that a Grand Prix was going to have a $120,000 prize pool and a $15,000 first prize, it’d suddenly be much easier to justify traveling to it, and the attendance at that event would spike, too, even if not necessarily to four thousand players. By keeping the minimum prize pool at $30,000, you would ensure that attendance wouldn’t be any worse than what we have now, and by having most events have announced prize pools that were much bigger, you’d actually increase attendance even further than the record numbers we’re seeing now.

Solution 3

Make GPs into primarily-independently-run-and-financed events. While tournament organizers would still have to apply to Wizards for the privilege of running a Grand Prix, and Wizards would still provide the invites and the Pro Points, it might be better to make them into epic-sized Pro Tour Qualifiers. An organizer that runs a PTQ has to pay for his or her own judges and has to provide his or her own prize support. WotC just provides the invite and the airfare being given away to the winner. While this would be a financial hit to the organizers currently running GPs at astronomic profits, it can definitely work. We already have independently-financed events of a somewhat similar scale being run by StarCityGames and TCGplayer. In order to bring the prize pools to a more acceptable level without increasing WotC’s expenses, they could require organizers to match WotC’s $30,000, thus doubling the prize pool to $60,000 and making it a much better deal for players. While this would decrease the attractiveness of GPs to organizers enough that they would no longer be willing to kill for them, it would probably just narrow the field to the savviest and most efficient organizers that could and would still profit from them, if just not nearly so extravagantly.

Solution 4

Cloud Key
Make them all completely in-house events. WotC could expand their in-house event-running team, in part by offering lucrative positions to the top organizers that would no longer have GPs to fuel their incomes. While this wouldn’t suddenly make running GPs a big for profit arm of the company, especially if they dramatically increased the prize support, taking in one hundred percent of the profits from the big GPs directly to WotC would go a long way toward helping reduce the marketing expense of the Grand Prix circuit.

Probably the biggest factor standing in the way of any of these possible solutions to what I consider “the Grand Prix problem” is WotC’s mentality that epically large events are somehow bad. Rather than address the problem, WotC hopes that it will self-correct and players will stop flying to events to be one of two thousand people trying to win a $3,500 prize, and attendances will drop to a more appropriate level for the kind of event that Wizards intends GPs to be. While if they’re patient that may happen, I just don’t understand why that’s a good thing for them to be hoping for. When I first started playing on the Pro Tour, news vans full of reporters would come to big pro events to see what all the fuss was about, giving WotC the kind of free press that a supposed marketing event like the Pro Tour should be at least in part intended to generate. With Pro Tours now behind closed doors in small venues, that role falls to GPs. Unfortunately, if they just become small events with small prizes, they’re not really going to be news anymore either. It seems to me that if you’re going to consider something a marketing expense, you should be trying to generate more excitement and bigger crowds and really get the most bang for your marketing buck.

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