Random Thoughts – Randocity!

Fallout 76: Vault 94 to close

Posted in botch, business, video game design by commorancy on January 24, 2020

Fallout 76_20200124171712

Vault 94 was to be one of the first “group dungeons” (i.e., vault raid) to come to Fallout 76’s Wasteland. Vault 94 is scheduled to close when Wastelanders opens. Let’s explore.

Group Raid Areas

With every online game that Bethesda has produced, at some point during the game’s online lifecycle, Bethesda introduces higher level group dungeons. These dungeons usually entail the need to be at least level 50 or higher and you’ll need pretty decent weapons and armor to survive. So, with that, Bethesda introduced Vault 94 as a group raid area within Fallout 76 sometime around August 20th of 2019. No, it hasn’t been open for every long at all. When something is bad, though… *shrug*

Hodge Podge

After having visited Vault 94 myself, I can conclusively say, “It’s a mess.” Oh, and what a mess it is… in more ways than one. Not only is the plant life overgrowth abundant throughout the vault, finding anything in the disaster of a vault is an absolute chore… and that’s even if there weren’t a single enemy down there. What’s worse is the reward, but we’ll come to that topic soon enough.

Throw on top of the fact that the entire interior is an unmitigated disaster of a design, you have a never ending smorgasbord of enemies thrown at you continually. From Ghouls to Mirelirks to Mirelirk Kings to pretty much you name it and it’s in down there. I’m surprised they didn’t throw a Yao Guai, Mothman and a Scorchbeast in, too.

Lag City

It’s not so much that there shouldn’t be enemies there, it’s that the enemies are so densely packed in that space that, when combined with the overly detailed plant overgrowth 3D environment, the game’s engine simply can’t keep up. It gets so laggy, you can barely even run and shoot. I can’t even imagine taking a team of 4 people down there with miniguns. The entire run would come to a crawl. It would become so laggy, it would be pointless to try. It’s bad enough with two people down there.

Bethesda way overcompensated with this vault and pushed the engine way beyond its limits. It’s also quite clear that Bethesda didn’t even bother to run any performance or gamer tests to determine how badly this challenge ultimately failed. Yes, if you’re really diligent and patient (and can wade through the myriad of problems), you can complete the dungeon and get your ending reward. The problem is, that end reward so very much sucks. It’s honestly one of the worst reward drops I’ve seen from Bethesda.

The point is, this raid is ultimately pointless. It’s overly difficult with the number of enemies thrown at you, but it’s made much more difficult by the fact that the interior frame rate lags so badly that you sometimes have to give up and leave. It’s just that bad.

Reward?

The biggest part of the problem with Vault 94 is actually its final reward. A great reward is the only reason to even consider going into Vault 94. Sadly, the weak reward and laggy play actually gives us no reason to go there. Without a reason to go down there, it’s a pointless exercise. Let’s get to it, then. The rewarded power armor skin is absolutely hideous. It’s not even the slightest bit “cool looking”. It’s so ugly, in fact, that that’s the sole reason no one wants to make this vault run. The armor set looks just like the interior of Vault 94, covered with overgrown plants. It’s not something that most people would want to wear, unless you want to look like an armor covered Poison Ivy from various comic books.

Why spend all of that time and effort fighting with the crap ton of enemies in a badly designed vault under HEAVY lag only to receive a hideously ugly PA skin as a result? It is a crappy skin worth less than 500 Atoms. You’ve spent a crap ton of your ammo and stimpaks to make that run and then you get an ugly worthless skin? Really? Clearly, no gamer wants to spend their time and resources doing this, just as Bethesda’s stats support. Bethesda needs to rethink its reward system. If you can’t make the reward worthy of spending the time, effort, ammo and stimpaks, no one will make the run. That’s exactly what’s happening with Vault 94.

It’s not even like power armor is actually very useful in Fallout 76. Bethesda has nerfed the usefulness and strength of power armor so much that you can actually do better out of power armor than you can in it. It also costs way too much to keep power armor repaired and then there’s the fact that you burn through Fusion Cores every few minutes now… when early in 2019 a Fusion Core could last you several days. Yeah, making the Vault 94 run is so not worth it. Locating 100% topped up Fusion Cores is nearly impossible unless you’re willing to take on the challenge of a possible PVP activity by taking over the Poseidon, Thunder Mountain or Monongah power plant workshops. This on top of Vault 94’s crapfest reward? Yeah, no. Even then, Bethesda could cause these workshops to begin dropping Fusion Cores of random lower charged amounts even from a Fusion Core Processor in the future, thus making Power Armor even more worthless than it already is.

In fact, not only is Bethesda continually nerfing every part of Fallout 76, making it worse and worse and requiring longer and longer grinding efforts, they’re also nerfing quest end rewards giving us less and less value at the end of each new quest. Instead, they choose to put those “great looking” things in the Atomic shop where you have to pay for them… instead of placing the items into the game as reward drops. Come on, Bethesda. You can seriously do better. If you can’t give us a reason to want to make a vault run, we’re not going to run it and you will simply have wasted months worth of programming efforts on nothing. You must make the end reward drop worth our time and effort and worthy of draining us of our ammo, thus giving us solid reasons to make that run!

Closure

From Bethesda’s January 16th’s Inside the Vault:

Through community feedback we’ve received and our own monitoring since that time, we’ve decided that Vault 94 and its Missions are not delivering the quality of experience that we had hoped to provide. As a result, we are currently planning to shut down Vault 94 alongside the release of the Wastelanders update.

It’s no wonder then that Bethesda’s recent stats show that Vault 94 barely has any visitors. Vault 94 is a crapfest extraordinaire. Not only is the reward incredibly bad, the dungeon itself is a horrid laggy mess. Bethesda would actually have to try harder to actually make a worse group dungeon than Vault 94.

Sometimes you just have to say, “Good riddance to bad rubbish” and with Vault 94, it’s far too long in coming. This dungeon needed a redesign the day it arrived. Yet, Bethesda entirely ignored gamer complaints. Unfortunately, we don’t know the exact release date of Wastelanders, so we don’t know the exact date of Vault 94’s closure.

Oh, and Bethesda states they will move that sucky power armor skin reward to some other location so we can get it in some other way after Vault 94 closes. Yeah, like we all want that ugly power armor skin? I don’t think so. Here’s what Bethesda states:

When the Vault is disabled, we are planning to make all of its rewards, including the exclusive Power Armor sets and Vault Steel, achievable through other means.

As if we’re going to be anywhere close to excited for that power armor skin or vault steel when it becomes available “through other means”. Don’t think so.

If you really, really personally love this lagfest of a vault, then you’ll want to make sure to run it a few times before it disappears. Personally, the last time I was in that vault is the last time I’ll ever be in that vault. Yes, it really IS that bad.

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Did Toys “R” Us have to fail?

Posted in bankruptcy, botch, business, ethics, fail by commorancy on September 9, 2019

If you’ve read various articles including this Bloomberg article, you might come away thinking that all of what happened to Toys “R” Us began a decade ago (i.e., the early 00s). In fact, you would be so wrong… and so would Bloomberg. Let’s explore.

The 80s

Around 1981 or 1982, I worked at Toys “R” Us. Even at that time, Toys “R” Us ran a questionable business model. A business model that, I might add, even store managers recognized and thought was unsustainable. In fact, after having discussions with store managers at my store, I got an earful about how they thought that the chain would likely fail within a decade if they kept on using that business model. This was the early 80s.

What business model?

Toys “R” Us sowed the seeds of its own destruction at least beginning in the 80s, perhaps as early as the 70s. What questionable business model is this? The model chosen was to operate the stores in the red (otherwise known as losing money) through 80-90% of the year (aka, “90 in the red”). Then, the management hoped to recoup those losses in the final 1-2 months of the year during holiday season sales. It didn’t always work out.

While this model seemed to work to keep most Toys “R” Us stores afloat through the 80s and 90s, it served to keep the company from really turning a solid profit and, ultimately, led to the company’s massive debt load. What that model meant to the stores is fully stocked shelves every day of the year. This was readily apparent walking into any Toys “R” Us store. The stores were not only full, they were positively brimming over with the latest toys. This also meant putting itself into massive debt each year in inventory and then hoping to pay off that debt at the end of the year when most of the stores finally ran “in the black” (read, turning a profit for the year).

Keep in mind that many of the stores didn’t turn a profit, but so long as enough stores did, they could cover for the debt they had been incurred company wide, or at least so that was the idea. Even the store manager at my Toys “R” Us location could see the handwriting on the wall in the early 80s. This store’s business model was not sustainable and I was, even as an standard employee, told this by various managers. These managers didn’t hold back their thoughts.

Bloomberg, Fads and Sustainability

What Bloomberg got right was that even a decade ago, TRU’s debt load had put them underwater. What Bloomberg didn’t address was that this debt began almost 2 decades earlier of overbuying, followed by hoping that a “hit toy” would kick them over the profit line at the end of every year.

“Hit Toys” were Toys “R” Us’s hopeful thing. They needed that Tickle Me Elmo or Nintendo Wii or Lazer Tag or Cabbage Patch Kid fad toy to carry the chain into the new year with profit on the books. Throughout the 80s and 90s, there were a string of these hit toys practically every year. Fad toys which flew off the shelves and brought Toys “R” Us to profitability each year. It was a risky move for Toys “R” Us to bank on a hot fad each year, but there it is.

Unfortunately, relying on this kind of yearly toy fad to sustain a business every year was not only risky, it began to burn Toys “R” Us as these yearly fads began to die off by the late 90s. Even during mid-late 90s, these fads were much less intense than they had been just a few years earlier. By the mid-00s, these fads were practically non-existent. Sure, there were hot toys, but no where near the levels of sales that Tickle Me Elmo or the Cabbage Patch Kid fads offered to Toys “R” Us’s bottom line… particularly when Best Buy, Walmart and Amazon concurrently began diluting the toy profits of TRU.

These fading fads were responsible for killing other toy stores chains as well, such as Kay Bee Toys and even the once high flying, high end FAO Schwarz. These fading fads also left Toys “R” Us holding a huge mound of debt.

Walmart

While Walmart did usurp the title of top toy seller from Toys “R” Us, that’s primarily because Toys “R” Us prices were always on the higher side. Walmart did carry toys, but not all toys. If you wanted something you couldn’t find at Walmart, you went to Toys “R” Us and it was pretty much guaranteed they would carry it (even though it might be out of stock). Walmart didn’t even stock many of these. The toy section in Walmart was always small by comparison. Sure, you could find better deals at Walmart, but only from the toys that they chose to carry.

Walmart was also not very kind to collectors in the 90s. If a collector showed up to buy toys, Walmart would try to do everything to keep that toy item away from the collectors… sometimes even going so far as to banning them from the store simply for buying toys. Does it really matter whose dollars are buying an item? Granted, I wasn’t particularly happy that a collector had gone to Walmart to buy out all of the “good” stock leaving tons of “peg warmers” sitting around that no one wanted. But, that’s how toy collecting worked in the 90s.

The whole collector market kind of died off with the advent of places where collectors could buy case packs, like Entertainment Earth. Instead of having to rummage around Walmart at 3AM (when they stocked new merchandise), you could order a full case of figures, guaranteeing that you’ll get at least one “rare” figure. This meant that the once Walmart and Toys “R” Us shopping locations for collectors became a thing of the past. Collectors took their money online to buy cases and stopped buying at Toys “R” Us. Buying case packs is easier, more convenient and doesn’t require the hassles of dealing with surly underpaid Walmart workers.

Toys “R” Us Kids Grew Up

Kids of the 80s became collectors in the 90s and became families on the 00s. The once popular collector market throughout the 90s fell apart into the 00s because the collector market changed and Toys “R” Us failed to understand this important change. The collector market is (or at least was) also a huge market that kept Toys “R” Us afloat in addition to the end-of-year-fads. However, brands like Hasbro and Mattel didn’t grow with the collector market. Sure, Hasbro tried, but the toys they made were tiny improvements over their (sub)standard toys. Mattel also tried with its collector Barbies, but, again they failed to understand the critical quality needed for what collectors really yearned.

In essence, the toy brands themselves didn’t grow to provide what collectors wanted… which left Toys “R” Us mostly without collector money. However, collector brands did grow up for the collector market outside of Toys “R” Us, including Sideshow and Hot Toys brands. These brands are now considered the premiere collector “toy” brands for adult collectors. These “action figures” are some of the highest end, most expensive, most collectable toys out there, yet these are not sold at Walmart, Target or even Toys “R” Us (before they closed). Though, you can find them on Amazon via third party sellers. This is where Toys “R” Us failed to keep up with the kid-turned-adult collectors. Hot Toys figures cost anywhere between $150-350 per figure; a price point that collectors are more than willing to pay to get that level of craftsmanship. A price point that Toys “R” Us never carried. A quality that not Toys “R” Us nor Walmart nor Target ever carried.

While Toys “R” Us continued to sell these low-end toy products to kids, it failed to grow up and to sell high end collectibles to adults. Ironically, this runs counter to their jingle. The most prestigious type of collectibles that Toys “R” Us sold were the collector Barbies and McFarlane figures, offering price points at  $15-40. A price tag that cannot provide the levels of detail, paint jobs and overall craftsmanship that goes into a Hot Toys or Sideshow figure. Adult collectors want high end figures and Sideshow and Hot Toys fill that niche. Toys “R” Us management never recognized this growing trend.

“I don’t want to grow up, I want to be a Toys “R” Us kid”

This jingle is ultimately the rationale that appears to have led Toys “R” Us management down the wrong path. Instead of singing the praises of not growing up, the toy store should have realized that kids grow into adults; adults who still want to buy collectible toys, but who don’t want the junky, low priced Hasbro and Mattel versions. They want premiere brands like Hot Toys offering highly detailed, highly realistic, meticulously crafted and painted figures… not Hasbro’s now antiquated, poorly painted, robot-style 12 inch figures. You might give these cheap toys to your kids, but you wouldn’t display them in a display case.

This collectible market began with highly detailed military figures, but branched out into licenses with Marvel, DC, Star Wars, Warner Brothers and various other large movie franchise brands. Toys “R” Us failed to latch onto this market and, thus, failed to capture the once Toys “R” Us kid who had grown into an adult and now desires these highly detailed collectible toys. As kids grow into adults, tastes change and people want more sophisticated products. Hot Toys and Sideshow found that niche for sophisticated adult tastes. Yet, Toys “R” Us failed to recognize this niche.

If Toys “R” Us had realized this mistake and had added brands like Hot Toys to its shelves, it might have been able to entice the collector’s market back into its stores and pay down some of its debt. Every discount retailer has, so far, failed to realize the adult collectible toy market. However, this lack of foresight hurt Toys “R” Us the most.

Kid Tastes

Additionally, kids tastes have also changed as a result of brands like Hot Toys and products like the iPad. Kids don’t want want to buy Leap or other “toy” or “fake” tablets when they can ask their parents for the real thing. Kids also want the higher end Hot Toys than the poorly crafted Hasbro Ironman figures. While Toys “R” Us did begin carrying Apple products, the stores really thought of these more as a toy rather than treating them as something useful. Best Buy always treated their Apple section with the best possible displays. Toys “R” Us displayed its Apple tablets right next to random other tablets as though they weren’t anything special. I’m not even sure that I’d have felt comfortable buying an Apple tablet from Toys “R” Us. Not only did they have no one versed in this technology on staff, what they carried could have been 2 or even 3 generations old. Toys “R” Us just didn’t treat these products with the respect that they deserved.

As a result of kids changing tastes and higher levels of sophistication, kids really didn’t want much of what was in that toy store after a certain age. This meant that Toys “R” Us was primarily for kids of a certain age and below (probably 8-9 or younger). Even still, these ages were growing up faster.

Toys “R” Us Closure

Did Toys “R” Us have to close? Yes, it did. Without a management team capable of fully understanding the downsides of running its stores using the “90 in the red” model throughout the year (and failing to accommodate the changing tastes of adult collectors), the stores ultimately succumbed to closure. It was inevitable.

What tipped the scale, though, was 2005’s $6.6 billion leveraged buyout of Toys “R” Us by the KKR, Bain Capital, and Vornado Realty Trust; a purchase that saddled the corporation with at least $5 billion in debt, in addition to its already mounting toy inventory debt each operating year. There was simply no way Toys “R” Us could recover from and pay down that debt considering its interest each month.

In fact, it was this very same leveraged buyout that not only trashed Toys “R” Us, it also lost its original private equity investors at least $1.28 billion. Even these private equity firms were ignorant of Toys “R” Us’s “90 in the red” model. You’d think that between three different private equity firms, one would have had brain among them. I guess not. Toys “R” Us was not worth buying strictly because of that business model… and it was especially true when considering saddling an already debt overburdened company with even more debt. It was an insanely stupid buyout made more stupid because of the lack performing even the most basic of fiduciary responsibility. Those private equity firms got exactly what they deserved out of that deal. Make the wrong deal, get the wrong results.

If I had been sitting in the room when this buyout deal was being considered, I would have put the kibosh on that deal pronto. If managers of stores could recognize how badly Toys “R” Us was operating in the 80s, why couldn’t a bunch of suits at three different private equity firms see this before plopping down $6.6 billion?

Overvaluation

If anything, 2005’s TRU sale is a cautionary tale. There are way too many buyouts that are purchased at way too high a value. I’ve seen it happen time and time again. Companies worth maybe $500 million sell for $3 billion? It’s just insane the money that’s being overspent. Would you walk into Walmart and offer to pay $25 for a $5 tube of toothpaste? I don’t think so. So, why do these investors think it’s okay to spend $6.6 billion on a company worth maybe $1 billion at its best… and it was then likely actually worth much less considering the debt that it already carried. Its insane business model should have further reduced its value.

Could Toys “R” Us have been saved?

Probably not. At least, not with its status quo business model. But, it might have been saved IF Toys “R” Us had adopted a more balanced approach to its store sales and more sane merchandise ordering in combination with letting managers actually handle full store merchandising instead of relying on nice looking, but misguided corporate-standard planograms.

Only stock enough merchandise in a specific store that that store can actually sell. Let managers move stock around on shelves and place the merchandise in their store where it’s most likely to sell. Additionally, don’t send stock to a store where the buying demographic isn’t buying that type of merchandise. If Barbies aren’t popular in a particular store’s demographic region, send limited amounts of Barbies there. It’s a waste of money and effort to stock merchandise that doesn’t sell. One of Toys “R” Us’s biggest foibles was its cookie-cutter store approach. That meant it was sending the same stock to all stores regardless of popularity in that local store’s area. It also meant that it way overspent on toys that would never sell at certain stores. Eventually, they simply had to clearance out those toys. Each store’s inventory should have been customized based on buying habits of local consumers and by the local manager. Only the local store team knows what’s the “hot sellers” in their store.

Clearance merchandise is actually a red flag in the retail business. It means that, as a store, you way overspent on merchandise that you couldn’t sell. If you have excessive clearance merchandise, then your merchandise spends are way off. It also means that your buyer is overbuying stuff that isn’t selling. It means you need to rethink your buyer and it means your new buyer needs to rethink how much to spend on similar types of products.

One of Toys “R” Us’s other foibles was its inability to recognize and stock the “hottest toys” rapidly. If you send 5 of something to a store and it sells out in 10 minutes, you need to stock more of it and you need to do it pronto. Yet, it might take Toys “R” Us 30 or more days to get that merchandise back in stock. That’s 30 days of zero sales… sales that could have been had the next day and the day after that. Missed sales were one of TRU’s biggest problems. Having merchandise in stock that you can sell day after day is a huge win. Yet, if the corporate buyers don’t even know to reorder this thing again, the store is blind. This is why the next part was so important to improving TRU.

Instead, this toy chain should have let the local managers have autonomy via cutting merchandise from their store that isn’t selling and placing rush orders on the hottest toys. By letting the managers, you know, actually manage the store’s inventory properly, the stores could have cut costs and raised profits. The managers could have done this by buying more of popular hot sellers in that area, shuffling cold merchandise to other stores that can sell it and cutting non-sellers from the inventory. In fact, managers should have actually had access to every store’s inventory throughout the chain and when that item last sold there. If a particular item is selling hot in one store, but is completely dead in other stores, the hot item store manager should be able to request stock moved from the cold stores to their store. This way, managers could have directly moved inventory from store to store instead of placing orders for more stock, thus causing more debt. Only after the existing in-store inventory was exhausted should a new order need to be placed. The buyers from the chain should have endorsed this manager autonomy.

Unfortunately, that wasn’t a priority for the very rigid corporate run TRU. I could walk into a store in Texas and find specific toys always out of stock. Then walk into a TRU in St. Louis a week later and find twenty of them sitting on the shelf with dust on the top. If stores had been able to request the hottest toys moved from other stores, the chain could have saved a lot of money on new stock orders.

This change in business model could have drastically improved Toys “R” Us’s profitability throughout the year. It probably would have cut down on orders to toy sellers, but something’s got to give when you’re running a retail store chain. If the toy manufacturers had to suffer a little to let Toys “R” Us recover and be a whole lot more profitable, then so be it.

Unfortunately, TRU’s status quo model endured. Even if the leveraged buyout hadn’t occurred in 2005, Toys “R” Us’s fate was pretty much sealed strictly by is “90 in the red” (cookie cutter) mentality. It was only a matter of time before it succumbed to its own debt burden even if it hadn’t incurred a ton more debt after that poor sale. The 2005 unwise sale simply accelerated Toys “R” Us’s already looming demise.

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