I wish someone would explain to me exactly how WotC are "growing the hobby" that differs from what they have been doing for the last 15 years.
Sure. They are addressing this on several fronts, but much of this is what seems to be missed in these discussions from what I've seen.
First the 5th Edition is a much simpler game to learn and play, and it plays faster.
This has made it easy to bring in lots of new players and, anecdotally anyway, it seems to be bringing in lots of new players. It makes it simple to run 2-4 hour sessions at stores rather than the marathon sessions I miss.
The core book sales numbers that we do have access to supports this as well. Yes there are many people converting, but the fact that there have been multiple printings this early plus the Amazon rank would imply that there are a lot of new players, and likely retreads who haven't played in a while.
Slower release schedule
What seems to confound people is that a slower release schedule can actually improve sales and profit. There are a lot of reasons, but one big one is sales cannibalization. A product (of any type) has a sales life. Most products see the bulk of their sales in their initial release period. How long that release period is varies from product to product.
So, for D&D you release a new adventure and people start buying it. The cycle for this product might be 6 months, meaning anywhere from 70% and up of your total sales for that product will occur in the first 6 months. That sounds about right for an adventure, since it gives time for the core group to buy it and run it, and word of mouth and reviews to take some time to get to the larger group of buyers that form the bulk of the sales. Beyond that time the excitement has worn off, and since adventurers tend to be one-time use, it's also about the time where those who haven't played it are running into too many spoilers.
Particularly for organized play, it's also a good length of times for stores to run it through a couple of cycles before their customers want something new.
So here's the problem - you release your next adventure 3 months later. Now you have two products in the cycle, and the second adventure cannibalizes the sales of the first. Which means that you sell fewer copies of the first. Publishing is an expensive business to be in. Your first x-number of copies, probably in the tens of thousands if not more are paying for the cost of product development and publication. That means you make much more money on the second 100,000 copies you sell than on the first 100,000. If you release the next product too soon, you're basically eliminating a big chunk of your profits.
In addition, the cost of developing and publishing a single $50 adventure every 6 months is less expensive than a $20 module every month. Not only is a higher release schedule more expensive on the publishing side, but the development is much more costly, because you'll need a much larger staff to support that schedule. Depending on the product, you might have to sell 10 times the number of $20 modules to make the same amount as your $50 adventure to earn the same profit. And as we've already seen, you will probably sell far fewer of the $20 modules because of sales cannibalization.
In addition, a steady release schedule trains your customers. They prepare for the next big release, and they are ready to buy it sooner.
Another aspect to the slow release schedule is respecting your customers' budgets. You want more of your customers to buy all of your stuff. Existing customers have already they told you what you like. But if you oversaturate the market, they have to pick and choose. You don't want them picking and choosing, you want them buying everything. This also increases sales per title, and as I've said, more sales per title is more profitable, even if you sell a higher total volume divided by 6 products over the same period.
Organized Play
They are doing a great job of supporting organized play. By making the start of the major adventure free to Adventurer's League, and tying in a lot of shorter adventures for in-store play, it encourages players to go buy the main adventure for their home game. This is a great approach because it doesn't cannibalize sales of the adventure. If the organized play was simply playing the main adventure, then fewer people would need to buy it.
Yes, a lot of people are playing the main adventure in stores, but somebody still has to buy it.
Keeping it simple
The simplicity of the game is part of what makes it work in today's world. Growing up we would spend 6-8 hours a day playing D&D at times. Now there's 400 channels of TV, the internet, video games, collectible card games, and all sorts of other entertainment options vying for not only your money but your time.
Keeping it easy for kids also makes it easy for family time. Mom or Dad taking junior to the store for a game, or starting something at home. I have a friend that started teaching his kids with 4th edition. It's evident they learned with 4th edition, but the 5th edition made is so much easier for them. I started DMing with a mix of the Holmes basic set and AD&D. Learning to DM a game in 4th edition was not easy. To have more games, you need more DMs. I have players that started with 5th edition and within weeks are starting their own games as DM. More DMs mean more sales.
Releasing a lot of splat books goes against the slower release schedule wisdom, and complicates the game. Including new splat in the adventure paths, and even offering it free as they have been is more profitable if you sell more copies of the titles you publish. An occasional (once a year? twice a year?) additional book like the Sword Coast Adventurer's Guide to gather together splat and update existing lore and add new lore plays well into this strategy. Remember not even two full years into this yet, and I'm sure they are still tweaking their business model to see what will work long-term.
What has become very clear, though, is that making the game more complex doesn't help the game's longevity. Again, anecdotal evidence suggests that 'this is the game you're looking for' based on the number of people on forums, in stores, etc. that are saying they are converting from OD&D, 2nd Ed, 3rd Ed, and Pathfinder. Those are all customers that stopped buying the product because they didn't like the newer versions. The fact that this one seems to appeal to players from all of the editions and offshoots is an indication that it's growing as well.
Rebublishing, making the old relevant again
This has been mentioned, but by making material from older editions not only usable but 'official' brings back a whole lot of lost players. The State of D&D doesn't refer to how many people are playing D&D of any edition, as you might think. The State of D&D is dependent upon people purchasing the current edition. Yes, they make money from the sales of older materials (almost all profit), but it doesn't sell core books and generally doesn't bring new players in. People playing the older editions tend to be people who like that edition and never upgraded. Converting those players is a big win and an indication the game is growing, because if long-term players are saying this is the game you want to play, new players will follow.
That trend was proven in the Pathfinder vs 4th edition. Not everybody playing Pathfinder were existing D&D customers. Many of them were new players that started with a D&D alternative.
Recognizing the brand is bigger than the game
This is the big one. By tying the adventure paths to other mediums, particularly video games, but also novels, comics, and possibly even movies, you have access to entire customer bases that never even considered the game. Licensing plays a huge part in making the teapot bigger. Playing D&D is suddenly cool. It's mainstream. And they have a simple, fun game that works so anybody can get started after reading a rule book in an hour or two.
By releasing a video game arc at the same time as the table-top means you have advertising in places you don't even sell the game. Best Buy. WalMart. Target (although they have the Basic Set now). Video games are mainstream and multi-generational too. Every 6 months there's another D&D event with products in multiple categories.
The product is more profitable, the business model is more sustainable. A lot of people (at least early on) implied or accused WotC as putting more money and focus on building the brand than building the game. I disagree. Of course they are going to put a lot of money into brand building. But from what it looks like, it's paying off big time because they're selling more books. If you cater only to the converts, where are you going to get your new players? You build the brand by going to where the likely new customers are. Other than wisely tying together multiple products in multiple categories, the video games and other products don't have anything to do with the release schedule for TTRP products. Good business acumen does.
The game is easy for just about anybody to pick up and play, and there seems to be an explosion of games to drop in on at stores. Heck, I live in a small town 20 minutes from the closest highway and there are two new game stores in walking distance from my house. It's unheard of. And no, I won't say it's because of D&D. It's because the gaming community as a whole is growing. But D&D is benefitting from it nonetheless. And I think the evidence is pretty clear that they are also leading the way. Each store around here that sells gaming stuff at all has multiple copies of the core books on their shelves, as well as each adventure as it's released. Those that have it at all, only have the Core Pathfinder book, that's it. Even at Barnes and Noble, as far as the gaming products are concerned, they have the most space for D&D and Munchkin.
I think it will take a couple more years before we really know what the typical release schedule will be like. The Sword Coast Adventurer's Guide will be a test to see what they release next. I'm not sure they'll do big campaign settings, because most of those tend to be a straight reprint with some updated information. The various sourcebooks on Waterdeep include a lot of this sort of thing. A smaller sourcebook on a portion of a world, supplemented by adventures and online material seems to be working very well. Adventurer's League is much better organized than I've seen in the past.
I don't know all of the facts and don't have raw numbers to back this all up (although there are some that can be found). But I am in manufacturing, and the nature of creating and producing a product is the same, it's the actual costs, margins, break-even points, product lifecycle, etc that will vary from industry to industry.
Ilbranteloth
