The Long Road Back to Local

Posted by Zach

Tabletop games are responsible for some of my closest friendships and many of my best memories. My frustration with the status quo back in late 2006, largely centered around local and online retailers having their heads buried in the sand, was what gave me the conviction and courage to launch Team Covenant - a singles website dedicated to The Spoils. Sixteen years later, we’re working on the third iteration of our local store, often referred to as Covenant 3.0.

We dreamed back then of revolutionizing the tabletop gaming industry into what we thought it should be. At our first shareholder meeting, gathered around a small table at Starbucks, one of the main ideas that we discussed was creating an incredible local store and then building stores like it all over the world.

In mid-2008, we adopted the tagline “Gaming Reborn” along with our original phoenix logo in the shape of a spade (phoenix for rebirth, spade for gaming). At the time, we were still young enough to believe we could change the world and naive enough that we didn’t understand how far we had to go or what it would take to do it. We talked about a lot of big ideas back then, and we would often pursue them outright even without the needed capital, influence, or infrastructure to succeed. Sometimes, though, that kind of gumption can spark important moments that established brands are too conservative to discover.

One such moment was hosting our first in-person event in May of 2010, a little convention called MonCon. After witnessing the immense joy and profound connection created at the event, along with the ripple effect it had on the community in the following months and years, our path forward was clear. We had to create a local place to gather and play games.

We had a lot of late night discussions about what our space should be and how it should work, many of them quite heated. We didn’t have all the answers, but we knew that our store was going to focus on people playing games first and foremost.

Our original model was event and membership focused. The space itself, along with our minimal board game selection, was free for everyone to use. We charged for events, and members got their events for free along with a host of benefits - like the quarterly members-only event.

While we intended to sell products, our belief was that the majority of players either knew exactly what they wanted or had no idea what they wanted. So, we didn’t feel the need to use our space or very limited resources on shelves of products. Inspired largely by the Apple Store, we had some products under the counter and the majority of them in the back. The space itself would be for playing tabletop games, with displays for each game we supported - notably not Magic, Pokemon, Yu-gi-oh, or 40k - that allowed our team to demo the game to new players on the spot.

We cobbled together all the resources we could, raising funds among ourselves and taking loans from friends and family, and poured every penny we had into making it the best place to play tabletop games. After many discussions, debates, and a lot of checking our budget every time our costs went up, we launched with a private friends and family night at Covenant Tulsa (1.0) on March 16th, 2012. During the private event, we had a few random folks stop by that would soon become some of our most avid supporters, including our first member, Dennis Harlien - he signed up that night!

We officially opened our doors to the public on March 17th, 2012 and that opening weekend, thanks in large part to our family and friends, was remarkable. Then, Monday came. And Tuesday after it. James Salyers, another early visitor who appeared during our friends and family night, would often remark during those early days, and as genuinely as possible, “I love this place, but I have no idea how you guys are going to make it.” We didn’t either.

Financially, those early years were tough, but we knew we were onto something. Players showed up and kept showing up. One of our most notable early communities was for the Game of Thrones LCG. Very quickly after opening, it was normal for us to have 25+ people show up to our weekly league night, making it one of the largest Thrones communities in the world.

At Gen Con that year, Fantasy Flight Games announced two games that would become critical for us, the Netrunner LCG and Star Wars X-Wing miniatures game. These were an incredible injection of energy to our local space and helped solidify the niche that we were carving out (essentially, the “other” games). Soon enough, we were regularly hosting more players for these games than anything else. They also bolstered our online revenue, which in turn gave us the resources to survive and continue investing in our local space.

As we headed into late 2013, attendance was increasing each month but the store was still losing money. If we hadn’t had our online revenue stream, along with a team of people willing to work way too many hours for way too little pay, we would have had to close our doors even with the success of Netrunner and X-Wing. Work continued, but by the start of 2014, it was clear that we could only go so far with our current space.

So, we started creating a new concept for our local store in early 2014. In August, we signed a lease for a new space and were again having discussions late into the night to work through our path forward. For our local model to be sustainable in its own right, we had to either grow, decrease costs, or, ideally, both.

To achieve growth, we simplified and improved our membership structure (previously, we had a membership for each game), doubled our capacity (our 1.0 space was often full), added revenue streams (like having beer on tap), improved the quality of our space (nicer tables, sound, etc.) and moved to a better area. The most important changes to reduce costs were a combination of curtailing our hours of operation and pivoting away from a standing policy of having two teammates working the store at all times.

After over a year of work, we opened our doors at Covenant Tulsa 2.0 on April 25th, 2015. In conjunction, we updated our logo to one that is very similar to the one in use today. While we were all excited about the new space, we ran into new problems immediately.

The acoustics in the space were gutteral. Once you had 20 or more people playing games, the sound levels were unbearable - even worse than Gen Con. With Netrunner and X-Wing regionals on the horizon, we made a significant, unplanned investment in sound panels, threading them throughout the open ceiling.

Then we launched our new website. This launch ended up being catastrophic though, and proceeded to drain our time and resources for the rest of the year. Unfortunately, it would also take us until early 2016 to finally get through all the red tape so we could start serving beer on tap.

In the month after getting our beer license, we partnered with Plaid Hat Games to host Ashes Weekend - which was largely inspired by MonCon 2010. The addition of beer made an incredible difference, generating a significant amount of revenue in that single weekend. That marked a turning point and things started going better and better.

After a year of operating Covenant 2.0 model, our local store had its first profitable year. Success, right? Not quite.

While this was a big achievement for us, something was still off. We knew our local space could be better, and we also knew that we didn’t have the time or resources to fully realize that vision. So, we put the development of our local space mostly on pause and turned our focus online. Our goal was to put ourselves in a position where we had the bandwidth and resources to create our local store the right way - with absolutely no holds barred.

A few years down the road, mid-2019 to be exact, we had streamlined the online side of our business. Not only were we more efficiently doing our work, but we were focused on doing only the most important work. For the first time ever, we had bandwidth and resources to spare. Now, the question was whether or not we were really willing to go all-in and bet everything we’d built on finally realizing our fullest vision for the local space.

The decision was made by the end of 2019, and we dove head first into an extensive research project investigating the state of tabletop gaming spaces around the world. The goal was simple: we wanted to create the best place in the world to play tabletop games. The difficulty, as usual, is that such a space also had to be sustainable.

In other words, we had to simultaneously answer the question of what the best place to play games in the world would look like and how to make that space generate enough profit to stay open and, ideally, be scalable. As we traveled to GAMA in March of 2020, we were excited about our answers to both of those questions and the implications it might have for us and the industry itself.

It was at GAMA that we started to come to grips with what a pandemic actually meant. A few days after our early departure, we were “temporarily” closing Covenant Tulsa. A few days after that, we were fully remote. And a few days after that, Asmodee - the owner of most of the publishers we supported at the time - announced they wouldn’t be releasing more products until local stores could once again open.

Almost overnight, we went from dreaming about the future to being grounded in the present. We were now having to calculate how long the cash we’d been saving for 3.0 would allow us to keep paying our team if we couldn’t find a way to create revenue. The answer was around six months, assuming we paid everyone the same minimum that covered essential bills (housing, food).

Meantime, we decided to do the only thing we really could at the time - focus on video, and live streaming in particular. The goal was to give people stuck at home a way to connect with others and to stay engaged with tabletop gaming as local stores closed their doors.

Over the weekend, Jonathan somehow built a system that he and Bryce could use to remotely make cards appear on screen while we were streaming. I still don’t know how it works. Meantime, one person from Operations, usually Raphe or Robert, would come into the office and ship orders on the days and times that Steven and I weren’t there.

After streaming for a few days, we launched a content membership. This didn’t gate any of our content behind the membership, as we knew many wouldn’t be in a position to afford it, but it did create a revenue stream that would give us a bit more time.

What happened next is still hard to believe. With uncertainty all around, the outpouring of support we received through purchases, comments, letters, and Discord/live chat participation was staggering. It kept us going, and led to even more opportunities.

Prior to the pandemic, we had been talking with a couple of new publishers about supporting their games. With a sudden spike in capacity to create content, we soon launched our support of both Skytear and the Flesh and Blood TCG. We also worked with Plaid Hat Games to bring one of our all-time favorite games, Ashes, back through our newly-devised PDP (Player-Driven Production) system. As people and businesses found ways to navigate the pandemic, it wasn’t long before Asmodee announced they would return to releasing products as well.

While 2020 took a massive psychological toll and was full of uncertainty, we actually ended the year in a better position than when we started it. With vaccines and the hope for normalcy to return, we resumed our conversations around 3.0. We interviewed several local architects to get an idea of what it would cost to build what we wanted, ultimately hiring Lilly Architects to produce various concepts for the space. As we started to better understand what it would cost to build out these models, we also started to wonder if it was wise to invest so much into a property that we would be renting.

Easy answer: it wouldn’t be.

In early 2021 we looked at a bunch of possible buildings to purchase in Tulsa, but we didn’t find anything that got us excited or came close to meeting our needs. We expanded our search to any plot of land that would have space for a building and plenty of parking, and eventually found a location that we loved (near 18th and Boston). We started the lengthy process of purchasing the land, which included a lot of red tape from the city and state. In October of 2021, we closed on the property and now officially own the land for 3.0!

In 2022, we started working with our architects on concepts specifically tailored for the land we had acquired. By the middle of the year, we were mostly done with our concept and architectural plans. We sent those plans out to a handful of contractors to get quotes and estimates. Unfortunately, the quotes all came back at least 85% higher than the projections from mid-2021. There were also several of the materials we wanted to use that had significantly longer wait times than normal, with some as far as 24 months out.

We worked with Lilly to refine the building through “value engineering”, with the goal of reigning in some of the more expensive elements and removing materials that were going to take an extended amount of time to receive. While we arrived at a concept we were still very happy with, there were enough uncompromisable elements to keep the cost of the project higher than we could afford.

Our goal for 2023 is to put ourselves in a position to start building 3.0. Doing so required us to solve bigger problems, which required us to scale up. Our small “temporary” office, the one we’d been in since late 2020, became a hindrance.

In May, we moved into a warehouse near 6th and Utica in Tulsa, Oklahoma. This move allows us to continue growing and removes the need for the warehouse and offices we’d previously planned to build as part of 3.0. In turn, this significantly reduces the scope and cost of our build-out while opening up a number of opportunities that should accelerate our growth. With our continued efforts and the ongoing support of our players, we’re optimistic we will be able to finally start building Covenant Tulsa 3.0 by early 2024.

Mark me.

Fascinating discussions within the tabletop industry.
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