Surfing a ten meter wave.

As always, we begin with a disclaimer.

Everything you read on this website is the personal opinion of John Stephens, the author. It may not reflect the thoughts, ideas, opinions, or belief systems of GAMA, any member of the GAMA staff, or any other member of the GAMA Board of Directors. It may not reflect the opinions of Mr. Stephens family, his business partners, or the government and flag he swears allegiance to.

Today, I want to talk a little bit about surfing. I used to love my surfboard, I spent almost a decade living on the west coast and the ocean was my happy place. In the morning I could fall off a surfboard, in the evening I could just sit in darkness and listen to the waves. During the summers you could spend the days with your toes in warm water and your evenings around a little campfire, having sing-alongs with friends who played guitar.

The ocean is still my happy place, but the last great west coast town has been ruined by developers with their overpriced beachfront hotels that brought tourists into a town that once belonged to residents, and the USMC.

So what does surfing have to do with the game industry? Because that's why you're here, the game industry. Well, the game industry is the ocean. It's my new happy place, but it's also a place where the waves can be one meter high on one day, ten meters the next, and then sitting at two or three meters for weeks.

If you sell Pokémon, right now you're riding atop a ten meter wave, and there are some things to remember when it comes to that ten meter wave.

(Editors Note: John never rode a ten meter wave, he mostly fell off his board in one meter surf.)

First, that wave can kill you. It's important that you be confident in the water, because when you panic, something bad happens.

Second, get out before the end. If you can exit the wave safely having ridden it until just before it breaks apart, you'll still be out in the ocean, and you'll use less energy paddling back to the starting point to grab the next wave.

Third, never take the risk if you can't afford the consequences. On a wave, those consequences could very well be literally drowning, on the Pokéwave, that risk could be bankruptcy.

Let's end this metaphor and get to the meat of something here. Right now, the entire industry has a two-fold Poképroblem. First, the game is largely inaccessible to the children we would like to see playing the game. The new releases this week have market values that are two and three times the MSRP, so stores are left with terrible options.

First, you could sell it at MSRP. No matter what limit you put on the product, you'll sell it all in one day, because the internet will tell on you, and every vulture and backpack dealer in your town will send their cousins, mothers, and brothers to purchase things from you. Then they'll flip them online and make all the profits.

Second, you can sell at or close to market value. This means collectors can come to you, but children certainly can't, because most children can't afford $115 for a Prismatic Evolutions ETB. This option keeps the backpack dealers from profiting on your work though, so I like it (because I truly dislike backpack vendors who try to suck the profit from our stores with none of the risk or work).

These waves come and go in Pokémon, and right now there's a huge one carrying dollars into our tills, but this won't last forever. You know how I know this? Because they never do. We had one of these waves in 2016 (I didn't get much out of it, I was still doing all the buying in the store and refused to purchase Pokémon cards). We had one of these waves in 2020 (COVID related?) that we did make a great deal of money on (because I had surrendered a lot of buying, and my new buyer bought the Pokémanz), but at the end of that wave, do you know what I had?

Piles and piles of Battle Styles. Piles of Battle Styles that could have been a threat to my bottom line, cash flow, and ability to pay bills, if we had spent outside of our budget and allowed that to happen. Thankfully we lived within our budget, and while it would take more than four years to sell off that Battle Styles, we were never in danger of not paying our bills.

So here are again, that Pokémon is a ten meter wave, you've entered into it properly, you're using the correct surfboard (meaning knowledge of your budget and cash flow), and your head is up so you know where the water gets shallow (meaning the danger points for your store). That's what you do to set yourself up for success, so just do it.

Every boom/bust cycle takes someone out. If you've overspent, dug into your credit, broken your buying budget to try to get more cash out of this boom, you could die in the bust.

Stay within yourself, know what your store can afford, and you can ride this wave to profit, make your store more healthy in the long-term, and not shatter your brains on your board when the wave takes you out.

(Editor's Note: If John hadn't been getting ready to leave for Denver he would have told you this also applies to Final Fantasy this summer.)

As always, if you want to tell me how wrong I am, or share some gnarly surfing stories, click the Subscribe button to leave comments. You get a free subscription, which means you also get an email when a new post goes live, and with that subscription you can tell how wrong I am every week, or ask how big a ten meter wave is in Freedom Units.