Podcast #279: Hasbro Layoffs and D&D's Future

Abstruse · Dec 17, 2023

agrayday said:
I am thinking eventually Hasbro will dump wizards to appease the board, if that 300M isnt made up.

They won't because Wizards is propping up the company at the moment. They're the only profitable division of the company. The reason Alta Fox wanted Wizards spun off is so that shareholders of Hasbro would get shares of the new stand-alone Wizards of the Coast, thus meaning all the profit that WotC's making will go into shareholder dividends and not keeping the lights on for the rest of Hasbro's operations.

Also it's odd to me that Hasbro keeps getting singled out (or the people who don't read past headlines on social media and blaming Wizards of the Coast for the layoffs) for doing this when it's almost every company doing it. Growth must be constant or else the business is dying. Doesn't matter if a company is continuously profitable, it must be more profitable than it was last year or even last quarter. The line must always go up, growth must be eternal. It's what's caused a huge problem for Netflix - By the time of the pandemic, everybody who wanted a Netflix subscription had one so the market was saturated. Without new subscribers, though, the line doesn't go up. So they started raising prices and canceling shows and adding ads to the service in order to squeeze out more profit...which meant that they lost more customers than the new policies got them in profits. Combined with fewer people stuck in their homes so don't feel the need to pay ever-increasing monthly fees for a service they're barely using, it's creating a spiral for Netflix that culminated in the other tactic: Layoffs. Specifically shuttering their entire animation division.

Because it's an easy way to make the line go up. Lay off a bunch of employees and their salaries are no longer on the expenses for future earnings projections. Without their expense but with the projected sales and revenue the same, it makes the profit higher. It's also commonly done during the holidays because it gets those salaries off the next fiscal year's reports. It's not just Hasbro doing this, it's the vast majority of corporations who aren't experience organic growth. And unless something is done to regulate the market to prevent this "Line Go Up or Die" mentality, it's going to keep happening.

darjr · Dec 17, 2023

I gotta say. It's gotta be some kinda of place to be that the one branch propping up the whole enterprise is awash with it's own serious self inflicted errors. And then to gash wotc with these layoffs on top of it.

Abstruse · Dec 17, 2023

darjr said:
I gotta say. It's gotta be some kinda of place to be that the one branch propping up the whole enterprise is awash with it's own serious self inflicted errors. And then to gash wotc with these layoffs on top of it.

I haven't dug too deeply into the numbers, but I think a lot of the propping up is coming from Magic: The Gathering Arena.

The focus on D&D is because the "undermonetized" realization is still stuck in their craw. D&D has brand recognition that companies would do unspeakable things for, but the only real product is the TTRPG which isn't easy to monetize. You can't get eight-figure revenue out of a niche hobby that requires reading multiple 300+ page rulebooks. So they're likely going to keep chasing tie-ins until they find one that sticks (that doesn't require them paying another company...BG3 hit big but they're sharing profits with Larian while their in-house D&D licensed game Dark Alliance 3 faceplanted hard).

Superchunk77 · Dec 18, 2023

Abstruse said:
I haven't dug too deeply into the numbers, but I think a lot of the propping up is coming from Magic: The Gathering Arena.

The focus on D&D is because the "undermonetized" realization is still stuck in their craw. D&D has brand recognition that companies would do unspeakable things for, but the only real product is the TTRPG which isn't easy to monetize. You can't get eight-figure revenue out of a niche hobby that requires reading multiple 300+ page rulebooks. So they're likely going to keep chasing tie-ins until they find one that sticks (that doesn't require them paying another company...BG3 hit big but they're sharing profits with Larian while their in-house D&D licensed game Dark Alliance 3 faceplanted hard).

2024 "D&D" all hinges on the VTT. If they get the subs, it could do well for a time, but then Hasbro will try to monetize the crap out of it with micro transactions until people get fed up and move on to something else. The lifespan of digital video games like this is pretty short.

CommodoreKong · Dec 18, 2023

Superchunk77 said:
2024 "D&D" all hinges on the VTT. If they get the subs, it could do well for a time, but then Hasbro will try to monetize the crap out of it with micro transactions until people get fed up and move on to something else. The lifespan of digital video games like this is pretty short.

Yeah given how impressive the 3D VTT looks I'm sure Hasbro spent a ton on it and they're expecting it to make a lot of money for them, which means a lot of micro transactions.

If the VTT doesn't do well it's hard to say what the future of DND is. I do see them scaling back if that happens.

Abstruse · Dec 18, 2023

CommodoreKong said:
Yeah given how impressive the 3D VTT looks I'm sure Hasbro spent a ton on it and they're expecting it to make a lot of money for them, which means a lot of micro transactions.

If the VTT doesn't do well it's hard to say what the future of DND is. I do see them scaling back if that happens.

"Scaling back" is what got us 5e in the first place so I'm not particularly worried. The only thing I'm worried about is people proclaiming prematurely that "Dungeons & Dragons is DEAD! Wizards of the Coast FINISHED!" like what seems to be all the YouTube clickbait videos are saying. Mostly because people who don't follow TTRPG news and just play the game will likely eventually catch wind of it, decide D&D is "over", and give up on TTRPGs altogether. Or new players will assume that it's out-of-print and no longer being made so why get involved in a hobby that doesn't have a future? Made worse by, as discussed in the podcast, many people not understanding D&D is just one of many TTRPGs and isn't a generic term for all roleplaying games.

D&D is too valuable a brand for Hasbro to drop support for entirely. Worst-case scenario is being put in a "holding pattern" like in the mid-2010s of releasing just 1-2 books a year just so that there's something going on with the brand the same way Disney and WB just needs some comic book to come out from Marvel and DC so they can mine the IP for movies, video games, licensed material like t-shirts and backpacks and underoos, etc.

It's also highly unlikely they'd sell off the D&D brand because it's potentially worth a lot more money than anyone would reasonably pay for it. Large corporations tend to be much more likely to sit on a product line or brand or IP and do nothing with it just in case they decide to do something with it in the future rather than sell it off to another company who definitely will do something with it.

aramis erak · Dec 19, 2023

I doubt that WotC is going to get separated nor closed.
D&D isn't their cash cow - Magic the Gathering is... but D&D is the #2. Both have lots of out-house media.

Either way, the layoffs are a jerk move, oft repeated, but always resulting in fewer hire backs... and more freelancers.

Podcast #279: Hasbro Layoffs and D&D's Future

#279: Hasbro Layoffs and D&D’s Future | Morrus’ Unofficial Tabletop RPG Talk

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