D&D 5E D&D Cited in Hasbro Quarterly Report as Revenue Increase for Hasbro

[billd91]

This is definitive proof D&D did well on launch. When Mike Mearls said it did better at launch than either 3e or 4e, it would appear he was correct. That doesn't mean it will continue to do well long-term, but we can now definitively say it did very well on launch.

Still hard to say too much even about launch. Their marketing this time (notice all of the newspaper articles that were out priming the pump?) may have raised D&D's profile enough that they'd have mentioned it even if the actual revenue increase was modest. I don't doubt that it was a revenue increase, just that we may not have enough additional information to infer how big it was and whether it was mentioned because it was a major standout compared to previous performance or because of other factors such as a need to justify the money spent on marketing.

My own personal impression is that 5e is doing well, will probably do better than 4e, and has the potential to do as well as 3e as a tabletop game with a good strategy for supporting materials like setting supplements and adventures, either via their own efforts or via license. And if they get their other media butts in gear and have a good 5e-based computer game, tablet game, and/or console game(s) soon, then I think they'll do really well.

 

[TarionzCousin]

Oh to know the numbers.

The number is 4. It's right there in the title: Connect Four.






Thanks, Mistwell. This is nice to know.

 

[Thalionalfirin]

I'm a manager of financial reporting and I write these things (10-Q's) for a living.

What Hasbro has to is explain the revenue variance between current period (Q3 and Sept 2014 YTD) versus prior year (Q3 and Sept 2013 YTD). Depending upon their auditors (I'm guessing Big 4 due to the size of the company), they're going to have to get pretty granular (probably to the nearest million, if not hundred thousand).

It doesn't surprise me that they listed D&D, because this part of the 10-Q tends to be an exercise to come up with enough variances amongst all their product lines to account for the difference.

As this is comparing results to prior year, my guess is that D&D had a difference that was material enough for the auditors, but that can be easily explained due to the fact that there was probably very little revenue being generated in Q3 2013 as opposed to Q3 2014, when they launched 5e and could recognize all the revenue for items shipped (not necessarily sold by retailers) in the quarter.

Note that they don't disclose how much of the 86 million increase in revenue is broken down by product line so it's impossible to tell how much revenue D&D generated for Hasbro... only that the change from period to period was materially significant.

Did the launch go well? Well enough to be mentioned, but we're unable to ascertain how well due to the lack of disclosure.

 

[Kramodlog]

They don't mention items in quarterly reports which are not material increases or decreases for Hasbro overall. It's not a report of increased revenues in D&D over the prior quarter of D&D revenues (I don't even think they track the D&D sub-group that way at Hasbro, it's a WOTC group), it was a report of noteworthy increase in Hasbro revenues from that revenue stream. Something I cannot recall ever happening before since Hasbro bought WOTC.

This is definitive proof D&D did well on launch. When Mike Mearls said it did better at launch than either 3e or 4e, it would appear he was correct. That doesn't mean it will continue to do well long-term, but we can now definitively say it did very well on launch.

Of course it was a noteworthy increase. It went from close to zero to a lot more than zero. Prior to this D&D always brought some revenues, so you didn't see noteworthy increases in revenues and you didn't see it mentioned in Hasbro's financial reports. As a example, if your revenues use to be 1$ and now they are 11$, that is an 1,000% increase. Certainly noteworthy, but not that much money.

All this proves is that D&D was shelved for two years, that they launched a new edition and that new editions generate sells.

 

[Imaro]

I'm curious whether DDI is separate from D&D in these reports... if not it's not exactly correct to claim D&D went from close to zero, at least not according to the numbers for DDI many have claimed. Does anyone know if they are looked at separately?

 

[Thalionalfirin]

I'm curious whether DDI is separate from D&D in these reports... if not it's not exactly correct to claim D&D went from close to zero, at least not according to the numbers for DDI many have claimed. Does anyone know if they are looked at separately?

Can't really tell. But unless there have been massive cancellations between Q3 2013 and Q3 2014, the revenue stream would be fairly consistent between periods and would offset each other for variance analysis purposes.

I'm guessing that most of the DDI subscriptions are being maintained by people who prefer 4e, both then and now.

 

[Imaro]

Can't really tell. But unless there have been massive cancellations between Q3 2013 and Q3 2014, the revenue stream would be fairly consistent between periods and would offset each other for variance analysis purposes.

Oh, I get that but if it's part of "D&D" wouldn't the sales of 5e be what increased the variance... and wouldn't that variance have had to be, relative to DDI revenue (which again according to some of the numbers estimated on these boards was significant), significant in order to be noticed?

 

[Pauper]

Interesting that the previous mention was in April 2007 -- that would be at the tail end of the 3.5E era (4E was announced at GenCon 2007 and premiered there in 2008).

DDO had been out for a year (it released in Feb 2006), but wouldn't go Free-to-Play until 2009. Neverwinter, of course, wasn't released yet.

The only RPG product I can find that was released during this quarter was the Dungeonscape book -- the 3.5 splatbook that introduced the factotum class and for which Rich Berlew (of Order of the Stick fame) was a co-author.

 

[Mistwell]

Of course it was a noteworthy increase. It went from close to zero to a lot more than zero.

No, again, that is meaningless for a 10-Q. It doesn't get reported. Indeed, it could result in a shareholder lawsuit if they do things like that, if it's not a material gain for Hasbro in general. They did not report it was an increase over the prior quarter for D&D. They reported it was an increase for Hasbro's overall revenue, in a material way. So no, they're saying it did well - well enough to finally blip onto the total Hasbro revenue, which is totally independent of how it did previously.

Prior to this D&D always brought some revenues, so you didn't see noteworthy increases in revenues and you didn't see it mentioned in Hasbro's financial reports.

No, it was never a line-item one way or the other. WOTC is the line-item for that. It's only being mentioned because it warrants mention for Hasbro overall revenue increases, not relative to prior rates. The report would be thousands of pages long if it were detailing every product rise and fall.

As a example, if your revenues use to be 1$ and now they are 11$, that is an 1,000% increase. Certainly noteworthy, but not that much money.

I don't know what's not making sense here - it has to be a material increase for HASBRO'S OVERALL REVENUE to get a report item. If they reported every major increase even if it resulted in immaterial sums, they would be accused of being misleading in their reports. This is not a PR document - it's covered by FTC rules. It's not the type of increase you're talking about - we know this, for sure, 100%, unless you have evidence of fraudulent reporting. Which you don't. So no, that's not what this is.

All this proves is that D&D was shelved for two years, that they launched a new edition and that new editions generate sells.

No, that is not what it proves. I understand you may not be familiar with quarterly reporting for public companies...but now you are. We know it means the launch did well. We know that - it's not in doubt, you have it in black and white in an official document, reported to the Government and to all shareholders, that is bound by FTC law and under threat of shareholder lawsuit for misleading statements. That's the best you're ever going to get for any type of industry - it's as certain as you can get.

It does not mean anything necessarily for long term success, but we can finally put to bed any claim that the launch didn't do well financially. We know, for sure, it did.

 

[Mistwell]

Interesting that the previous mention was in April 2007 -- that would be at the tail end of the 3.5E era (4E was announced at GenCon 2007 and premiered there in 2008).

DDO had been out for a year (it released in Feb 2006), but wouldn't go Free-to-Play until 2009. Neverwinter, of course, wasn't released yet.

The only RPG product I can find that was released during this quarter was the Dungeonscape book -- the 3.5 splatbook that introduced the factotum class and for which Rich Berlew (of Order of the Stick fame) was a co-author.

Yeah I am not sure what went into that line item. It may have been a late report on DDO, it might have been a sale of other digital or movie rights. I am pretty sure it was not a single splat book Again, JoeTheLawyer might recall the details.