Hi folks,

It’s time for a detailed update on Vs. System current and future plans.

First off, I want to congratulate the Vs. System team on winning best expansion of the year from Inquest for Infinite Crisis. A lot of good work went into Vs. System sets last year, and it’s recognized by the players.

Where We Are Today

We had a solid year for 2006, with high-quality products. Vs. System is consistently the 3^rd or 4^th best-selling TCG in the world, which is no easy task. My prediction is that we’re in this slot to stay—getting higher than this is not realistic, and we won’t get too much lower.

However, Vs. System in 2006 wasn’t as strong as in 2005 or 2004. It’s clear that we need to focus on getting new people to play the game in order to build a strong future for Vs. System and avoid the natural attrition that any TCG encounters. In addition to recruiting new players, we need to keep developing the best sets and programs possible to keep our current loyal players excited about Vs. System.

We also need to control our spending on Vs. System, which is one of the best ways to ensure a strong future for the game.

With those goals in mind, we’re going to focus aggressively on supporting tournaments and leagues at the local level. We want to give store owners the tools they need to offer strong support to current Vs. System players and recruit new players into the Vs. System community. We’re going to redirect some money from the high-end programs to support more grassroots programs and help attract new players.

Hobby League

As you’ve heard, we are focusing continually on upgrading our Hobby League kits and evolving the program to add City Championships and Release Celebrations.

We’ll be introducing some new, fun, and creative format options to Hobby League, and play variations will start with the April kits. Hobby League kits will also be produced using a new production process, which will ensure 100% on-time delivery starting in March.

City Championships

City Championships are the programs that I’m really looking forward to. We’ve been working on the plan for these for over a year, and been putting tools in place to make sure they can work. City Championships will start in March and will take place four times per year, once after each set releases. City Championship support materials will be included in the Hobby League kits for that month, so stores can run their City Championships one weekend and then follow up with Hobby League for the rest of the month.

We’ll monitor this program carefully and focus attention on improving it with each release until it’s consistently 10/10. There may be a time in the future when City Championships lead to a National Championship, but we’ll have to evaluate the success of the program first before making that decision.

As an added bonus, players who participate in City Championships will be eligible for an invite to Pro Circuit Indy if they obtain a rating of at least 2650 by July 10^th.

Release Celebrations

Our goal for 2007 is to replace Sneak Previews with Release Celebrations, starting with the World’s Finest set which releases on June 27^th. The Release Celebrations will occur on the weekend of June 30^th & July 1^st.

This new program will allow more stores to be involved and more players to participate. The prize support for this program will also be adjusted to help draw more players into hobby shops. You’ll see a common theme here, in which we focus on helping hobby store owners attract more players and make existing players happier.

$50K Tournaments

What does this mean for our planned $50K tournaments? This is an idea that I personally like very much, but we have to remove them from our schedule until we can confidently say that we’ve done a good job of acquiring more players. This means that there will probably not be a $50K tournament in 2007 for at least the first six months. It’s also possible that it will never be realistic to launch this program, but for now we’re keeping in on the table as a future option.

Pro Circuit

Sydney will host the next Pro Circuit, as everyone knows. We’re happy to give all of our loyal players from New Zealand and Australia a chance to play in the big event. The prize purse for this event will be over $300,000.

The next Pro Circuit after Sydney will be at Gen Con Indy. The purse for this event will be $100,000. This is the most significant cut in my announcement, but it’s the most necessary in order to get us on track for a strong product in the future. For any Pro Circuits that we run in the future, we’ll determine the purse on a case by case basis.

I am hoping that the strength of Marvel Team-Up and World’s Finest, along with the two Legends sets, will allow us announce bigger purses for future Pro Circuits. We need to be more responsible with our programs to ensure that we can continue to make Vs. forever, and that will occasionally mean some tough choices. I hope you understand and support a philosophy that promotes the long term health of the game.

The Pro Circuit after Gen Con Indy was going to be at Gen Con So Cal. Gen Con So Cal has been cancelled, so we’re planning what we’re going to do about that situation. There are a few events in that time period that we may partner with, or possibly we’ll build our own event. This will take a while to figure out, since it involves new potential partners.

PCQs

We’re moving to a new model for Pro Circuit invites that is friendly to all players and rewards player loyalty. While players may still use their existing PC points to attend Pro Circuit events, future invites will be based entirely on rating. For players that attend City Championships, the rating threshold will be significantly lower than it has been. This will allow more players to qualify and attend the Pro Circuit. In addition to City Championships, we’ll also be offering new ways for players to qualify or increase their rating for upcoming tournaments. All PCQs that are now on the schedule are still valid. We will not be scheduling new PCQs in the future.

Vs. System Mega-Weekend – Columbus

We’ll be hosting a Vs. System Mega-Weekend on July 6^th-8^th in Columbus, Ohio. This is the first of several Mega-Weekends that we’ll host throughout the country. This is the same weekend as Origins, but will be held at a different location so people won’t be forced to pay Origins badge prices if they don’t want to attend Origins itself.

Besides the wide variety of tournaments held during the Mega-Weekend, we’ll host two big events: the 2007 Vs. System Amateur Championship, and the $10,000 World’s Finest Team Championship.

Amateur Championship

In July, we will hold the Amateur Championship in Columbus, where players with fewer than ten lifetime PC points can compete for a PC: Indy invite. In addition to the PC: Indy invites, our amateur players will be rewarded with other cool prizes such as game systems and iPods.

$10,000 World’s Finest – Team Sealed Deck

Just a week after World’s Finest hits stores, you will have a chance to test your Sealed Deck skills. Put together your three-player team and make plans to be in Columbus on this weekend.

Gen Con Indy – August 16^th-19^th

Last Chance Qualifiers

There will be two LCQs at Indy, one Sealed and one Constructed, that will only be open to players without PC points. Also at Indy, we’re going to ramp up the LCQ events. Now, not only will they get you into that weekend’s PC, but also every player will walk away with a sweet piece of Vs. System swag. For Indy, the LCQ participation prize will be a Savage Beatdown shirt!

Savage Beatdown Warm-Up

For those players already qualified for PC: Indy, we will be running a warm-up event parallel to the LCQs. Every player who participates will also walk away with a Savage Beatdown shirt.

$10,000 Championship – Bring Your Own Set

Pick any set from Marvel Origins through World’s Finest and build a deck using cards from just that set. $10,000 prize purse.

Marvel Legends Tournaments

All weekend long, we’ll run a series of tournaments for Marvel Legends with exclusive promo card prizes. This will be your first opportunity to play with the new Marvel Legends cards.

Pro Circuit Indy Format

The format for PC: Indy will be Modern Age, which means that any sets from Heralds of Galactus through World’s Finest are legal, including the Hellboy Essential Collection.

Long Term

We have plans for many more years of Vs. System releases. As long as people continue to enjoy Vs. System and show interest in the game, we’ll continue to make it and support it with as much organized play as we possibly can. We love the game, and we love its loyal players.

You’ve seen the articles from Mr. Scott Gaeta, the new Product Manager for Vs. System—he’s 100% dedicated to doing anything and everything he can to keep the game strong for years to come. He’s already working on a few great ideas for the sets we’re releasing this year, and he’ll be introducing a few minor and a few major upgrades to our game offerings. Stay tuned to his weekly articles for the most up-to-date news.

What can you do? Keep playing Vs. System and keep buying it. Try to pre-order product from your local gaming store as much as possible, because that has a huge impact. Try to avoid ordering from discount online sites if you can afford it. Run leagues and tournaments at your local store, and demo the game to as many new people as possible.

We’ll make a commitment to continue listening and talking to the community, so we can act as a partnership working toward a strong future for Vs. System.

Thanks very much,

Jeff