Well it looks as if ACD Distribution has lost about 40% of its gross sales and roughly 25% of its profit (see "Wizards of the Coast Says ACD Distribution ‘No Longer An Option’"). What does this mean to you? Well, it depends on who you are.
This does not bode well for ACD. According to the article linked above, stores that bought Wizards of the Coast product from ACD also bought non-WOTC product as well, likely in order to hit purchase levels required for free freight. These purchases, combined with the purchase of WOTC product, accounted for some 75% of ACD sales. If stores purchasing WOTC product shift their purchases to other distributors, as they will have to do, they will likely, for convenience sake, shift the non WOTC sales to those other distributors as well, potentially putting a huge hole in ACD’s sales and profitability. Getting the Asmodee exclusive this year will help (see "Asmodee USA Distribution Making Massive Shift"), but I doubt Asmodee sales will make up for the influx of cash that Magic releases provided multiple times a year especially given that Asmodee has made a strong push to develop its own direct sales channel to game stores. While Alliance had the Asmodee exclusive, the distributor had fewer concerns about Asmodee opening a dual distribution channel to compete against it. ACD now does. As ACD CEO Bob Maher Jr. pointed out in his court affidavit: "If ACD loses its Wizards distributorship, ACD must consider whether it can remain a going concern, jeopardizing its entire business and the jobs of 90 employees."
Other WOTC-authorized distributors will, of course, benefit, as the share of WOTC products sold by ACD will have to find a new outlet, especially since WOTC discontinued direct sales and funneled all of those sales through distribution (see "Rolling for Initiative – WotC Ends Its Direct Sales Program"). Other distributors will get the WOTC sales that were going to ACD (and ACD has a lot of loyal stores as customers for WOTC products) and Alliance Distribution loses the amount of sales it received through its exclusive with Asmodee.
Stores that got WOTC products through ACD now have to find other sources for them. Under WOTC’s current pre-release procedures, stores select from which distributor they wish to get their prerelease Magic product. This distributor stays fixed until the store decides to change it, which, due to inertia, stores do not do very often since in general, they remain happy with the distributor chosen. Now, that comfort zone has ruptured and stores have about a month to decide from which distributor they want to get their pre-release product. Not all distributors offer the same pricing or the same terms, so, especially if a store gets large quantities of pre-release product, the selection could add hundreds or thousands of dollars to a store’s bottom line. However, because pre-releases are pretty important to most store business models, all of ACD’s customers will make the switch before the cutoff date, ensuring that their customer have prerelease kits.
WOTC also announced that the eagerly anticipated Secret Lair April Fools set, announced last spring (see "Another Free Product for Retailers from WotC"), will ship with the Zendikar Rising prerelease materials. WPN Premium stores will receive five sets and all other WPN stores one. The set contains Goblin Snowman, Mudhole and Storm Crow. The fourth announced card, Squire, got dropped after WOTC severed ties with the artist.
The opinions expressed in this column are solely those of the writer, and do not necessarily reflect the views of the editorial staff of ICv2.com.
