Jeff Grubb on WotC and layoffs

[buzz]

There is no money in publishing RPGs. The fact that there are TRPG companies that can even hire full-time staff is pretty amazing. Until WotC finds a way to actually make D&D seriously profitable, you are going to see this kind of behavior every year.

"But, Paizo!" Paizo is riding a wave that will eventually end. They also have, I believe, a smaller overall staff.

 

[Morrus]

There are a few, but it is a crowded, niche market. It would be interesting to compile some statistics on the number of RPG companies which have full-time employees (as opposed to one-man bands or partnerships which use freelancers).

 

[I'm A Banana]

That's exactly what we need: stakeholders to get rid of the bloodsuckers!

[ame=http://www.youtube.com/watch?v=IJ_R-G_i4Xk]Debbie Downer Noise - YouTube[/ame]

Screw Hasbro! Free WotC from the clutches of the evil mega-corporation.

It's a little apples and oranges. It's also hard for me to take "evil mega-corporation" invective seriously, since, even if WotC was a mega-corporation, calling an artificial entity "evil" makes no sense to me. Kind of like calling your car evil. The car might be broken, but its not really capable of making a moral choice. Of course, the guys who drive a broken car and then shrug their shoulders when its breaks don't work and it kills some pedestrian might be in a different moral camp...

Anyway, when Paizo makes a product I want, I'll be happy to patronize them further.

It's worth pointing out that in a standard stakeholder-owner/management relationship, these layoffs are exactly what stakeholders WANT their proxies (ie - company officers and board) to do. They raise stock value, or at least keep it stable if revnues are falling.

In Grubb's little piece, he tried to raise a distinction between a stakeholder and a stockholer. While stockholders count as stakeholders, they aren't the ONLY ones that count. There are others (employees, consumers, etc.) that count, too.

In short...accounting

It's what you get when you reduce human beings to numbers, really: complete disregard for their humanity. And when the blame gets distributed and the numbers get cited, no one has to feel like they are being the jerk, like nobody decided to do this, it was fate, or it was destiny, or it was corporate science, its much easier to be complicit in the dehumanizing process of accounting.

 

[Celebrim]

RPG publishing is an entertainment industry. This might seem to be obvious, but its something that RPG publishers frequently forget.

As an entertainment industry, it's subject to the same sort of economic laws that govern profitability in the entertainment industry.

Given the relatively low popularity of RPG's, it may seem a stretch to compare what WotC does to what the NFL does or what MGM does but IMO they are much the same thing.

Firing your veterens as an RPG publisher is about like a movie studio firing its big name stars as a cost cutting measure. Sure, you can make movies without stars but you'll have a lot harder time selling them. Likewise, if you are a managing an NFL team, you'll probably notice that 10 or so players make up a significant chunk of your total personnel budget. But cutting all the players making more than $300,000 a year from your team is not a recipe for increasing the teams profitability in the long run.

The guys writting RPG's are artists. It's art. It's entertainment. It requires talent. Sure, there are lots of amateur DMs out there that have that same talent, but there aren't a lot of amateur DMs out there that have that talent, creativity, and ability AND the drive to turn what they create into a 50 hour a week grind done to professional standards for someones consumption other than themselves. There are not that many guys in the country that can do the job, and like the fact that in the NFL the whole multi-million dollar organization is carried to profitability by a hand full of players that the casual fan knows the name of, its the handful of true artisans that make an RPG companies product worth buying.

Paizo is doing as well or better than WotC in the RPG industry despite huge disadvantages in brand recognition because its pretty darn obvious that that is where the talent has gone. The system may not be perfect, but at least you aren't bored out of your mind reading the material. WotC never made a bigger mistake in the 3rd edition era than when it decided that modules don't matter.

D&D beat out its competitors in the early days because of modules. D&D is still in many ways relying on its old modules for content. Paizo is beating WotC because of modules. CoC is an enduring classic because of modules. Chill is still fondly remembered because of modules. It's not easy to make money on modules. But if you don't write great stories for your game system you never inspire new DMs to take it up, and without new DMs your game will ultimately wither and die.

I guess there does get to be a point where it makes more sense to fire your over the hill veterans as opposed to your up and coming stars, but just who does WotC have in its stable that is an up and coming star?

As for the larger issues that Grubb is addressing, I can't really expand upon my opinion in to much length in this forum because the discussion will get too political, but I'm inclined to believe that evolving social factors have rendered both the traditional corporation and the traditional employee union obselete and ineffectual. I really think that some new social technology, evolving out of the idea of the 'employee owned company' (maybe the 'employee owned company meets the Heinleinian line marriage') is necessary to meet the long term interests of the stakeholders. Both the union and the corporation seemed to have been pushed into a situation where they are 'eating their seed corn', the corporation because its shareholders are increasingly not stakeholders or even individuals and the union for a variety of reasons revolving around maximizing the quality of life of its employees nearing retirement age (who also have the most power) at the expense of any and all long term corporate health. In essence, its in the interest of both the tenured union employees (whose stake is continually decrease as they approach retirement) and the non-stake holding shareholders (who can always switch their investment once they realize a certain annual return) to 'eat the seed corn'.

 

[Umbran]

...I do find it rather amazing that inhuman investment portfolios control so much of whether or not Rich Baker deserves a job.

I'm sorry to say it, but what Mr. Baker personally deserves probably wasn't the question the management asked themselves.

Firing your veterens as an RPG publisher is about like a movie studio firing its big name stars as a cost cutting measure. Sure, you can make movies without stars but you'll have a lot harder time selling them.

I am not sure the designers names on the cover are a really selling point to most gamers. Or, perhaps more accurately - the sort of gamers who can tell one designer form another are also not going to be deterred by not knowing the name on the cover. If WotC sells it, I suspect those really well-informed gamers will look at the game anyway, and buy it based on merits, not names.

 

[Shayuri]

Yeah...the question of short-term gains versus long-term is one of the central ones. The actions and policies that are most beneficial to disinterested stakeholders are not always, or even often, the actions and policies that are most beneficial to a company.

Lay-offs in general are a good example. They're a quick, easy (for the ones making the decision) way to reduce costs when needed. You can't really cut pay, or even reduce benefits...at least not too much at a time, or else people will revolt. But most people won't protest layoffs. The ones left working are too relieved to complain much. And yet, people are the source of profit. Lay off too many people, and you find that your capacity to earn is lessened. This can quickly become a circle of the most vicious kind. This is avoided by trying to get remaining workers to divide the now-absent worker's duties between them...increasing their load, but maintaining productivity. That can only go so far though.

 

[DaveMage]

I am not sure the designers names on the cover are a really selling point to most gamers. Or, perhaps more accurately - the sort of gamers who can tell one designer form another are also not going to be deterred by not knowing the name on the cover. If WotC sells it, I suspect those really well-informed gamers will look at the game anyway, and buy it based on merits, not names.

Agreed.

The names don't really mean anything. If they title a book "The D&D Book of Cool Treasures" no one's going to care if it's written by Monte Cook or John Doe.

That's why freelancers are a much better value for WotC than expensive full-timers.

 

[I'm A Banana]

I'm sorry to say it, but what Mr. Baker personally deserves probably wasn't the question the management asked themselves.

You're probably right. I think that's part of the problem.

 

[Azgulor]

As Jeff Grubb is speaking as someone who lived in the trenches, this is probably the most concise view behind the veil I've seen. It's also a pretty succint summary of how some corporations are managed. Note that I said some, not all.

I wouldn't expect Mr. Grubb to comment on the approach much, certainly not with a lot of specifcs, as I believe he's still doing work in the industry. He touches on it with the view of stakeholder vs. stockholder. However, the fact that has become a morbid tradition, at a minimum, shows that WotC has not made such a transition to a stakeholder-centric view.

The stakeholder - stockholder view doesn't have to be at odds with each other, btw. And this means that outfits like Paizo are not necessarily doomed to a similar cycle/fate. Take the current tech darling, Apple.

Pre-iPhone & iPad, Apple's big play was the MAC. Despite having much smaller market share vs. the PC-market, Apple was profitable. They were not only content with their 20-some % market share, they resisted changes to their business model. Why? Because that model was much more profitable than the PC suppliers duking it out with each other. Where Dell, Acer, HP, Gateway, etc. saw prices being driven down repeatedly, Apple continued to do its thing. Even today, how often do you see deep discount sales in Apple Stores? (Not very often.)

By all accounts, the RPG industry is a tough business. However, the fact that the giant of the RPG industry hasn't found a business model that puts the Christmas Layoff Tradition in its grave is, IMO, a cause for stakeholder concern. This mentality has either become so ingrained in the culture that no one is looking at alternatives or D&D's model only works well during the edition launch window.

DDI, as a net new revenue stream, and as ferociously argued at EN World a profitable one, should have altered the Edition-Launch model. Perhaps it has, and the number of layoffs is fewer than in pre-DDI years. It hasn't eliminated it, however.

My money, however, is that its cultural. I've seen companies that couldn't get out of their own way. They stick to the one true way b/c that's how it's always been done. Sometimes they're risk-averse. Change is hard.

However, at some point, the culture turns toxic. This is especially true in the Internet culture of forums, social websites, online research, etc. Some employees will stay for as long as possible (change is hard, remember?), others are in roles that are "safer", some are driving the bus, & the overall economy factors in as well. But unless something changes, I think we're going to see (or are already seeing) a decline where the industry "dream job" isn't working for WotC anymore. At best, it'll be a resume builder for industry cred.

Companies can & do change. However, they are vastly outnumbered by those that are unable, or unwilling to do so. It'll be interesting to see how WotC comes through it.

 

[Klaus]

I'm sorry to say it, but what Mr. Baker personally deserves probably wasn't the question the management asked themselves.



I am not sure the designers names on the cover are a really selling point to most gamers. Or, perhaps more accurately - the sort of gamers who can tell one designer form another are also not going to be deterred by not knowing the name on the cover. If WotC sells it, I suspect those really well-informed gamers will look at the game anyway, and buy it based on merits, not names.

Look at the comics industry, where a writer+artist team can increase the appeal of a book.

I think publishers could benefit from fostering a greater name recognition. Back in the 70s, Jack Kirby was the first comics creator to become a selling point (when DC hired him away from Marvel, his books had a "Kirby is Here!" bullet). Feature that in ads, previews, etc. I like that in the past few months, Dragon/Dungeon articles began listing not only writer and artist, but also editors, producers and art directors, so you can add value to those names.

And speaking of ads, it's an old adage that you have to spend money to make money. D&D (and RPGs in general) need more advertising, promotions like D&D Encounters and Lair Assault, and maybe even a Free RPG Day.