Greetings all,

Chatting with my Dad, I realized that there are a lot of key players in the Magic tournament scene that are not immediately obvious to outsiders.  This is another pretty basic informative post for people not familiar with Magic – feel free to skip this if you know the following acronyms: WotC, SCG, PTQ, PTO, PES, FNM, and TO.

What are the key roles in driving Magic tournaments and sales?

Let’s start from the top.  The company that makes Magic: The Gathering is Wizards of the Coast.  (Abbreviated WotC.)  They are a part of Hasbro, the largest game and toy manufacturer in the world.  They make their money selling randomized booster packs to stores – they are essentially in the role of manufacturer that distributes product that end stores sell at (usually) suggested retail price.  Think of them like a book publishing company like Random House or a product manufacturer like Black and Decker.  The produce four new sets of cards a year, with between 150 and 300 cards in a set, some of which are new and some of which are reprints of older cards.  They make their money when general demand for a set is high and lots of boosters are sold in stores.

Distinct from them are the stores.  Stores sell Magic product in essentially two ways – as unopened randomized boosters, and as “singles”.  Singles is a piece of gaming lingo that means “as a single specific card”.  Stores make money both from when general set sales are high, and when they can buy a single from a player and then resell it for a higher cost then they bought it.  Most stores buy singles for about 30-50% of what they then resell for.  This of course varies card to card, and stores often times buy “in bulk”, getting thousands of unsorted cards at a low price-per-card and counting on there being some more expensive ones in the box that make it worthwhile.

There is a third group that has some overlap with the stores, tournament organizers.  Tournament organizers make their money putting together and running tournaments.  The majority of stores organize tournaments as a way to drive demand for cards at their store.  A very small number of tournament organizers worldwide are “premiere tournament organizers” (abbreviated PTO) – they put run the largest and most visible tournaments, with scales from a couple hundred to the record 4492 players that were in Grand Prix Las Vegas last month.  They are all associated with a storefront, but running these big events is a whole distinct set of skills from that of running a store.

We have some roles, what about the cast to fill them?

There are a handful of major tournament organizers in the United States.  I will mostly be talking about the US because I have limited exposure to the ins and outs of tournaments run outside the US, not because they are less important.

As mentioned above, there are only a small number of PTOs in the US.  I’ll talk about a few I have worked with – I have not worked with every PTO, so I will just talk about the ones I have.  It is also very possible I will forget or miss things talking about these PTOs – if you catch me in a mistake, please point it out, and I’ll correct it.

• StarCityGames (abbreviated SCG)
  • SCG is very very large.  They run one of the largest web storefronts (possibly the largest, I don’t have stats) and run their own tournament series semi-independently of WotC, the StarCityGames Open Series.  They are based out of Roanoke, Virginia, and do events all over the nation.
• Legion Events
  • This is the PTO I have worked with the most.  Steve Port is the head of Legion, and he is one of the people most responsible for my success as a judge – he organized all the Pro Tour Qualifiers (abbreviated PTQ) and regional prereleases I worked at for years, and gave me a position judge managing one once, which then stuck across future events.
  • Like all of the other PTOs, Steve’s organization does more than just run events.  Because I know them a little better than the others, I can mention some of them.  Legion Games is one of the largest stores in the Minneapolis metro area.  Legion Supplies is a super active gaming supplies business which makes card sleeves (plastic protectors you put your cards in to protect them during play) and other gaming accessories.  Products made by Legion Supplies are carried at stores across the United States.
• Cascade Games
  • Cascade Games organizes out of Washington and Oregon (surprise), and organizes for Grand Prix and runs events at a number of major conventions.  Cascade is run by Tim Shields.
• Professional Event Services (abbreviated PES)
  • PES organizes out of Michigan, and is run by Mike Guptil, a Judge Emeritus.  They run events in the northeast and in the central US.
• Pastimes Games / TCGPlayer
  • I’ve lumped these together, despite there being some differences.  Pastimes is run by Alan Hochman, and is based in Chicago.  Pastimes is the store, and the tournament organization structure for running events that Alan has.
  • TCGPlayer is an online storefront/aggregator that multiple stores use to provide a single way for lots of people to see their cards for sale all at once.  TCGPlayer as a company hosts a tournament series that runs at both store level and as a larger scale set of tournaments.  Alan also runs this, but it is distinct from Pastimes.

  So, those are some of the big players in the tournament sphere.  All of the PTOs have been running tournaments for a long time, and have a proven track record of being able to make a thousand-player event happen without huge issues arising.

How do all these people make their money?

As mentioned WotC makes money selling booster packs (and other unopened products associated with booster packs).  The entire tournament organization is purely a marketing expense for them, to drive demand for the product.  The people making direct profit off the events are the TOs who run them.

WotC wants successful Grand Prix because they make people want the cards to be able to play them in the events.  The Grand Prix circut is booming right now, and so are booster pack sales – historically tournament attendance and sales have been pretty closely correlated, with a few exceptions for specific sets.

Let’s use a couple of Grand Prix as an example of who makes money off of a major tournament, and generally how much they could maximally make – I’ll specifically skip some of the costs, so all of the “profit from” numbers are going to be heavily inflated because I don’t want to get into staff compensation, and don’t know the exact costs for halls, etc.

Grand Prix Kansas City had 958 players, and the format was Modern (I’ll talk about formats later – the thing you need to know is that people built decks at home, and brought decks to play to the event.)

Grand Prix Pittsburgh had 1628 players, and the format was Gatecrash Sealed Deck (again, formats will be a later post, what you need to know about this event is that people opened boosters on the spot and built a deck with them and played with that all day)

At Kansas City the TO was Legion Events.  The entry fee for this event was $40, and the prize payout was a total of $30,000, with prizes going to the top 64 players.  The prize was NOT provided by Legion Events, but was provided by WotC.  The entry fee goes to the TO, and covers their costs.  The hall rental, providing a staff, having the tools to run the event (computers, internet for the scorekeepers, product for side events, etc).  There are a lot of overhead costs to running an event like this, and while the TOs do pretty well, they have to front almost all of these costs, usually months or a year before the event.  Hall rental is expensive, and usually paid upfront.  The de facto standard for Grand Prix events now is to have some special promotional item for the first X players, like a playmat or a deckbox.  Those cost anywhere from $5-$10 per item to produce, plus the cost of getting custom art made for them.  Kansas City had a playmat with art produced for a Magic card, but Legion Games still had to pay the artist for reproduction rights, and pay to product the playmats.

At Pittsburgh the TO was PES.  Again, the entry fee was $40, and the prize payout was $30,000 to the top 64, again provided by WotC and not the TO.  Hold on, that means the TO made a lot more money, right?  Well, not necessarily.  Note the difference in format – this event was Limited (meaning you are limited to building from the product you get that day).  The TO DOES pay for that product.  Each player got 6 booster packs to build with.  Stores (and TOs, as an extension), generally get product from Wizards at about $2.15 per booster pack (there are exceptions, but that is approximately the price in most US regions).  So each player also cost the TO here approximately $12.90 in product.  In addition, a larger event needs bigger space, and more staff.  Location also factors into it – you can get a better hall in Kansas City for the same price as Pittsburgh.  (Or pay less for a similar hall.)  Similarly, Pittsburgh had a playmat, but it had art commissioned specifically for the playmat, which costs more than just paying for rights to art made for a different purpose.

Edit for a quick disclaimer: I used the cost stores get normal boosters at – TOs might get boosters for cheaper, I am not privy to their numbers.  Their costs might be a little lower per-player as a result.  It won’t make a huge amount of difference for their costs for the most part, unless the difference is more than a dollar per booster.

So, numbers.  Note that this is all derived from public-ish info (the linked pages) and a little bit of knowledge about what cost stores get boosters at.  I know some other stuff related to a lot of events, but you can do most of the crunching from public numbers.

The TO in the case of Kansas City had to turn $38,320 into a profit.  Almost all the costs of the event were fixed – cost of hall, cost of staff, cost of other overhead.  The only way to turn more profit is to get more people to the event or get people to somehow pay more over the weekend.  There are a few ways to do the latter, and US TOs have been trying what they can to get more money from people.  First, side events.  The main event runs all of Saturday and Sunday, but you can run other events in the same space in the same time, especially as you don’t want to have your main event take up 100% of your space.  This lets people enter as many events as they have money for over the weekend.  You can also let people pay more to enter the main event.  Kansas City had VIP entry for an extra $60 – this included water brought to you every round, fixed seating so you would not have to move to a different chair every round, the ability to skip lines, and priority access to the artists that the TO paid to have show up and sign cards.  (And a few other perks, these are just the ones that make the most sense to non-Magic people.)

The TO in the case of Pittsburgh had to turn $65,120 into a profit – but the event also had the overhead of product, to the tune of $21,001.20 in boosters given out.  And you need to have more than that on hand, in case the event was larger.  So suddenly the entry becomes more like $44,118.8o.  That’s only about $6,000 more to run an event almost twice the size, in a city that is arguably more expensive to run an event in.  That $21,000 goes to a distributor, and some of that goes back to WotC, so the cost to WotC is a little less than it otherwise would be, though not by enough to make the event purely profitable to them.

Where do the stores fit into all this?

Good question!  Stores run lots of small tournaments rather than these big ones.  The most common tournaments are Friday Night Magic (FNM), which WotC provides special promo cards to stores to run.

Stores get anywhere from the minimum (8 players) to mega FNMs that get 60 or more players into the store.  These events vary heavily in cost of entry and prizes, but the thing that all successful stores have in common is that the event is at the very worst break-even for them.  I’ll use the FNMs at Legion Games as an example, because I know them best:

The event is draft, so you get 3 boosters, pick and pass from them, and build a deck from that.  You play 3 matches with that deck, and for each one you win you get a booster pack.  If you win all 3, you get another booster pack.  Cost to enter is $15.  Number crunch time!

Let’s figure prize based on each group of 8 players (it scales linearly based roughly on groups of 8).  8 players is $120 entry.  In that group of 8, you will have one undefeated, three people with 2 wins, and 3 people with 1 win.  That is 13 boosters of prize, and the 24 boosters for play, means approximately $79.55 in product costs for the event.  That ends up with about $40 per 8 players of profit for the store, give or take.  That is not enough to keep the lights on, but it is enough to make sure the event is not a loss.  Most of the profit on a Friday night comes from incidental sales – drinks, card sleeves, singles, unopened boosters, other games, etc.  The goal is to get people into the store so you can make these sales.

Stores want to run lots of these smaller events, and drive traffic and knowledge about the store.  They are happiest when they are selling product, have people in the store every day, and have a happy player base that buys things from them.

There are a lot more pieces to this, but that is a general overview of who is making what kind of money from what – hopefully it is at least moderately informative and tells you who is making money where.