Ryan Dancey - D&D in a Death Spiral





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    Ryan Dancey - D&D in a Death Spiral

    some very interesting comments by Ryan Dancey about the whole pdf fiasco here-

    Why Are Any of You Surprised? So, WoTC has very suddenly… | RPGpundit's Xanga Site - Weblog

    This is a classic example of Death Spiral. As things go bad, the regressive forces inside the organization (lawyers, commissioned sales people, creative folk who feel stifled by history, precariously tenured executives) are increasingly able to exert their agenda. It always makes a bad situation worse, but there's no magic bullet that would likely make the bad situation better so you get a rapid unbalance in the Corporate Force towards the Dark Side.

    > OGL? Risky (someone might make us look bad, steal our ideas before we print them, or create a competitive brand that siphons off sales), and lack of faith in network marketing devalues ROI assumptions. Kill it.

    > PDF? Causes endless problems with hardcopy partners creating pressure on sales team they could really do without, and revenues are so small as to be non-strategic. Cut it.

    > Online? Every time you talk about it someone produces a $10 million minimum cost estimate to "do it right". After spending 3-5x this amount in a series of failed initiatives (lead by utterly unqualified people), executives assume Online is plutonium. No qualified lead or team will touch it.

    > Evergreen? Sales of each unit are going down and few products have any staying power. The only (seemingly viable) solution is to put more books in production - make up for the revenue hole caused by lack of evergreen sales by getting more money out of each customer. The Treadmill.

    The next things that will take hits are the RPGA (costs a lot to operate - slash it's budget), then quality (put fewer words and less art on fewer pages and raise the price), then consistency (rules varients generated by inexperienced designers and/or overworked developers start to spawn and cohesion in rulings breaks down leading to ad hoc interpretations as the de facto way to play).

    Meanwhile sales just keep going down, the gap in the budget keeps getting bigger, and no matter how many heads roll, there isn't any light at the end of the tunnel.

    Wizards is about to be forced into the D&D end-game which is something that many publishers have gone through but none ever with a game the scale and impact of D&D (TSR walked right up to this cliff but WotC saved them from going over the edge). There are 3 outcomes:

    1: A total collapse, and the game ceases meaningful publication and distribution at least for one gamer generation and maybe forever.

    2: Downsizing until overhead matches income; could involve some kind of out-license or spin off of the business - think BattleTech in its current incarnation.

    3: Traumatic rebirth, meaning that someone, somewhere finds some way to cut out the cancers that are eating the tabletop game and restarts the mass market business for D&D.

    Note that 2 and 3 can be mileposts on the road to 1.
    in other words-

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  • #2
    His follow-up response is also interesting. This is in response to a comment about PHB2 scarcity:
    Let's think this through. I can give you some pointers, because I've been in the room when these kinds of decisions were made.

    Wizards knows how many PHB1 they printed. They know how well they've been selling since release. A quick look at my local B&N shows me how many 4E products they've pumped out in the ensuing time, and they know the sales on each of those products as well. They are operating in what I would call an "information rich" environment.

    They also know roughly how many units the buyers at the big chain bookstores are going to take long before the books are printed. The solicitation cycles for the bookstores are longer than the production cycles which means Wizards often has the luxury of "printing to order". When I left the company, book store sales were about 50% of the total volume. Since there's been about a 50% dieoff in hobby gaming retailers since then I assume that the ratio is now closer to 75%. The book chain buyers have very good data warehouses and are able to inspect sales on a title by title, store by store basis. While they don't always do as much research as they could, they often do enough to get pretty close to the expected run rate for a given title. They too are "information rich".

    What does this tell us about scarcity for PHB2? It tells us that 4E in general is selling poorly. It tells us that given the insider information, the publisher and the market-maker both had less confidence in this signature product than necessary to meet demand. That's a scary, scary mistake to be making at this stage in the game. The driver behind this is overstock. Neither the sales team at Wizards, nor the buying team at the chain bookstores, wants any overstock inventory. If the book does not become evergreen, the overstock will have to be liquidated and due to the way cost accoutning works, the "charge" for that liquidation will come in some time period other than the period where the profits were made. For a host of accountancy reasons, that can be a budget - and comission - killer.

    The natural reaction of a sales team in a declining, underperforming market is to undershoot the demand curve - to genreate artificial scarcity. They'll sell all the books that get produced and lock in their gains, and if some customers don't get the product, well, that's not too harmful in the scheme of things. (Well, it's not too harmful unless your underprinting chokes what might have been a resurgence in demand leading to a recovery in the business, but that's a bird in the bush scenario and these are scary ing times for publishers and retailers alike!)

    Or maybe it's just a fluke, and there's inventory sitting in stores in one area of the country unsold while books in other areas are flying off shelves as fast as they can be stocked. Or maybe there's another wave of books coming, because the production run had to be split into two for logistical reasons. Or maybe there's an astroturfing campaign underway to simulate consumer demand that doesn't really exist, etc. etc. etc.

    By my money is on "internal decision maker doesn't believe in the product" as the reason you're seeing scarcity.
    RyanD
    Last edited by OchreJelly; Thursday, 9th April, 2009 at 05:06 PM. Reason: added spacing

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    Quote Originally Posted by OchreJelly View Post
    His follow-up response is also interesting. This is in response to a comment about PHB2 scarcity:
    Wow, I didn't see that one. Pretty strong words...
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    What Ryan Dancey said is what I discuss with my Local Gamestore owner (and good friend). I feel the reception to the part of the players handbook that should of been released with PHB1, was much less than the original.

    My gamestore DID sell out of all copied of the players handbook 2 but he only ordered 12. I told him he should of bought more, but I would have over estimated.

  • #5
    so is this guy always a glass half empty type, or only in regards to this?
    I'm with D&D...Any Edition

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    All of what Ryan says could be true. It could also be true that we are in the worst economic conditions in this country in some time, that the video game industry is nigh unbeatable at this point, and it doesn't matter what decisions WotC makes or doesn't make. Many, many things are likely at play here.

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    Very interesting, and from someone who knows the business very well.

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    Quote Originally Posted by Zaukrie View Post
    All of what Ryan says could be true. It could also be true that we are in the worst economic conditions in this country in some time, that the video game industry is nigh unbeatable at this point, and it doesn't matter what decisions WotC makes or doesn't make. Many, many things are likely at play here.
    Dancey says in that thread he thinks that pen and paper RPGs are finished as a commercial proposition - ie the 'video game industry is unbeatable' - hence the death spiral.
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  • #9
    Quote Originally Posted by GMforPowergamers View Post
    so is this guy always a glass half empty type, or only in regards to this?
    He's been predicting the death of table top RPGs for quite a while now.

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    Quote Originally Posted by hexgrid View Post
    He's been predicting the death of table top RPGs for quite a while now.
    Even a broken clock tells the right time twice a day.
    Come see what we're doing at synDCon

    TROGDOR COMES IN THE NIIIIIGHT!!!!!

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