Change is in the cards: Sports cards go digital
Topps' digital team in Orlando sets out to reinvent the sports card.
On the ninth floor of a nearly 100-year-old brick tower in downtown Orlando, a team of mostly 20- and 30-somethings is trying to reinvent an old-fashioned hobby for a new generation.
The programmers are working in a new digital studio for Topps, the manufacturer of trading cards that is staking its future on the belief that it can make digital baseball cards as popular as physical cards.
Topps launched the Orlando operation — just the second studio in its 4-year-old Topps Digital division and the first outside the company’s New York base — in July 2015, bringing in Dan Baker, a former Electronic Arts producer, to run things. Topps gave him, essentially, a blank canvas: “My first job was to write the job descriptions,” he says.
Subsidized with about $130,000 in local and state incentives, the Orlando studio grew to more than two dozen employees in its first year, and Baker says it’s likely to reach 35 to 40 people in all. Topps has plucked talent from a variety of sources, including Electronic Arts-Tiburon, EA’s central Florida game development studio; Zynga; and even Apple Stores. Topps also wound up hiring some local programmers who lost jobs when FanDuel, an online fantasy sports operator, closed.
To people who came of age before the turn of the century, the concept of a digital “card” might seem an oxymoron. But Jeremy Strauser, Topps vice president in charge of Topps Digital, says it’s perfectly natural to a new generation of consumers who prefer to download movies and music rather than buy DVDs and Cds.
“Once you get over the hump of digital collecting in your head, it’s kind of everything about collecting you enjoyed as a kid,” says Strauser, who, like Baker, is a former Electronic Arts executive producer. “You can carry your entire collection on your phone in your pocket and trade with anybody worldwide, instantly.”
Topps Digital launched the first of its trading-card apps, the baseball card-focused Topps Bunt, in 2012. It’s since added more than half a dozen others, including Topps Kick for soccer and Topps Huddle for football, along with apps for the entertainment franchises Star Wars, The Walking Dead and World Wrestling Entertainment. Players buy the cards with digital “coins,” which they can amass over time for free simply by logging into the app each day or more quickly by paying with real money or engaging with advertisers.
Each platform melds aspects of traditional card collecting — building sets, trading for favorite players and teams — with game play elements. In Topps Bunt, for instance, users compete by playing their best cards each day in daily fantasy sports contests.
Topps says participation is growing rapidly. The company recently reached more than 1 million unique users a month across all of its apps, with soccer and Star Wars the most popular. Strauser says more than 1 million packs are opened every day and users make about 2 million trades each week.
Though the company won’t disclose financial details, Strauser says Topps is still establishing the business. “The physical business is very profitable for Topps, and I would say the digital business is still one we’re investing in,” he says.
Growth of any kind is welcome news in this hobby.
Sports cards date back to the 19th century, when cigarette makers began inserting them into packs as promotional tools. But the modern hobby was born in 1952, when Brooklyn-based Topps Chewing Gum produced its first annual set of baseball cards. Card No. 311 of that set — Mickey Mantle’s rookie card — remains the most sought-after card of the post-World War II era.
The hobby exploded in popularity in the ’80s and early ’90s, as consumers began to view them not as toys but as investments. Adults — most of them speculators — swarmed into the market, and more than half a dozen major manufacturers emerged trying to meet the increased demand, each producing several brands of cards. At the same time, card shops started opening in strip malls, many of them run by amateur businessmen whose old cards had become very valuable.
Alan Narz had been selling point of- sale systems for NCR and AT&T when he decided to open Big League Cards in Casselberry, outside Orlando. That was in 1992, and Narz estimates there were close to 10,000 card stores around the country — including nearly 20 in Orlando alone.
“The stores were making money but, my God, they were so poorly run,” he says.
Then, the bottom fell out. Speculators abandoned the hobby when it became clear that manufacturers were overproducing — and everybody was protecting cards in plastic sleeves rather than sticking them between the spokes of their bikes. Meanwhile, kids were lured away by video games.
Prices collapsed so thoroughly that the iconic card of the era — a 1989 rookie card of Ken Griffey Jr. Produced by Carlsbad, Calif.-based Upper Deck that once routinely sold for more than $100 — can now be had on eBay for less than $5.
Annual sales of sports cards plummeted from more than $1 billion to less than $200 million. Today, Narz estimates that there are fewer than 1,000 card shops around the country. His is one of two in Orlando.
It’s also a much different hobby. The remaining sports card manufacturers — Topps, Upper Deck and Italy-based Panini are the big players — have increasingly focused on higher-end releases featuring cards with sharply limited print runs or features such as autographs or pieces of memorabilia embedded within them. At Big League Cards, a single box of Panini Flawless — a football release with just 10 cards per box — sells for more than $1,500.
An estimated 70% of card collectors today are adults, most of whom collected cards when they were kids.
And that’s why digital cards are so important to the future of Topps: The customer base skews far younger than in the physical business. Strauser says roughly 50% of Topps Digital users are 25 or younger.
While game play will remain important to the digital business model, the prospect poses yet another challenge for retailers such as Narz.
“It’s really our job to figure out how we make money with that,” he says. “Whether you like it or not, you have to embrace it.”