Unconfirmed: More Layoffs at WotC

[Jdvn1]

A sign of WotC profitability? Perhaps yes. It's likely even. However, there may be other determining factors.

A sign of D&D profitability? Definitely no.

Note: I'm not saying D&D isn't profitable. It's just that WotC is not going to have multiple HR organizations & policies for product lines. Therefore, whatever HR-policies apply (such as severance packages), would apply to employees of the company as a whole.

There may be (and almost certainly are) variances based on employee type (e.g. executive vs. management vs. full-time salaried employee).

Hasbro is probably not likely to have several HR departments and policies, at least in the United States. So, I'd argue that it's no indication of WotC necessarily either.

 

[CleverNickName]

There are some other hard numbers in your link.

Net Profit Margin 8.77%, for example, as well as links to more information.

I know, right? I'm looking over their numbers for the last few years, and they seem to be doing well. Very well in fact, considering we have been in a recession for the last couple of years.

Also, 2.83% on the day is a) beating the rest of the market by a lot (which is pretty stellar) and b) unreliable, since stocks fluctuate wildly.

Very true. But still, they have shown steady and consistent gains over the last five years. Not every company can say that nowadays.

Perhaps I should move my portfolio around a bit...

EDIT: Actually, I should have done that around 2006. Not sure about today. (But are we ever?)

 

[mudbunny]

The value of D&D as an IP and the value of D&D as a game are each part of the overall value of D&D. Hasbro certainly has a dollars-and-cents valuation of D&D in the short and long terms, and if the overall value of D&D is going down, they're losing money, and they're better off selling.

If you look solely at the short term, yes. But Hasbro needs to look at the long term. See the Transformers, for example. Before the movie came out, it had little to no value. Now, after two highly successful movies (critical reviews notwithstanding), the value is really, really high.

 

[DEFCON 1]

The value of D&D as an IP and the value of D&D as a game are each part of the overall value of D&D. Hasbro certainly has a dollars-and-cents valuation of D&D in the short and long terms, and if the overall value of D&D is going down, they're losing money, and they're better off selling.

However, this is one thing we all on these message board can in no way even begin to determine or guess at the moneys involved for the Hasbro parent company. It's futile enough for us to guess at how important the D&D brand is to Wizards of the Coast... now we want to try and value it to Hasbro as well? Nuh uh. We can't. We are all truly completely clueless on this.

As much as it seems many folks here wish Hasbro/WotC would sell off the D&D brand to someone else... someone who (in the guesstimation of the folks here) would treat the game and its designers "better"... the simple fact is that it is completely foolhardy of us to try and figure out just whether that sale would be justified. The brand has potential profit streams and costs from avenues all over... not just the roleplaying game itself. Whether that be Hollywood, or novels, or action figures, or videogames, or comic books, or board games, or tee-shirts, or bedsheets, or breakfast cereal etc. etc. etc... for us to believe that Hasbro would just up and sell off the Dungeons & Dragons brand because the roleplaying game is not making the company any money is a pipedream that I don't think we should get our hopes up in thinking it will eventually come true.

 

[Jdvn1]

However, this is one thing we all on these message board can in no way even begin to determine or guess at the moneys involved for the Hasbro parent company. It's futile enough for us to guess at how important the D&D brand is to Wizards of the Coast... now we want to try and value it to Hasbro as well? Nuh uh. We can't. We are all truly completely clueless on this.

Maybe, but some of us are knowledgeable about general business practices--we won't figure out the amount, but we can take a stab at the direction of change, if any.

 

[Jdvn1]

If you look solely at the short term, yes. But Hasbro needs to look at the long term. See the Transformers, for example. Before the movie came out, it had little to no value. Now, after two highly successful movies (critical reviews notwithstanding), the value is really, really high.

I did mention the short and long terms. It's not hard to compare the short and long terms against each other, to see which outweighs the other.

 

[SkidAce]

You can't intermix wishful thinking for cherry-picked karma with honest economic assessment.

Mmmmmmm mixed cherry milkshake...

 

[mudbunny]

I did mention the short and long terms. It's not hard to compare the short and long terms against each other, to see which outweighs the other.

Easy enough to value the short term yes. The long term?? Not so much.

 

[Steel_Wind]

The value of D&D as a game is dwarfed by the value of D&D as an IP. If D&D was going down the tubes, it is unlikely that Hasbro would sell it off. Rather, they would simply shelve it and wait for it to become valuable again.

Well – if “by wait for it to become valuable again” you mean wait until the Atari licensing deal is dead and free of all litigation claims – then I suppose so. Otherwise, I disagree. The profit and bonuses to management that come with the sale of assets encourages Hasbro’s management to sell now – not sit on them until some vague and uncertain date.

As the "big" value of the D&D brand IP is on the electronic side, I think it likely that Hasbro will sell the whole brand to EA, Ubisoft or Activision or maybe even Disney. The most likely candidate is EA -- as we know that EAs present management had expressed interest in the past.

In any event, the very nature of publicly traded companies are all about the here and now. This is especially so when management bonuses are tied to immediate quarterly returns – not for the uncertain fruits of future hopes.

The real problem in all of this is that the most potentially valuable element of that IP – electronic licensing, has never been properly appreciated by Hasbro. We know this, because within 2 years of that IP coming into Hasbro's possession when they bought WotC, they sold the electronic license rights on an extremely long term basis to Infogrammes Entertainment SA as a mere sweetener to persuade Infogrammes SA to purchase Hasbro Interactive for $100 million (A company which was, at the time of the dot.com bust, bleeding red ink in the nine figures).

As we all know, Hasbro’s throwing in of the long-term electronic rights to IESA for most of its core brands in 2001, most especially D&D, was an excellent, well-reasoned and imminently respectable business decision, made with prudence and after careful and deliberative consideration of all the relevant factors. Indeed, that business decision, in hindsight, can only be described as the very essence of Grace under Pressure and is deserving of veneration, deference and our ongoing respect for the superlative and farsighted management skills of the entire Hasbro team. I’m sure that if Hasbro management was confronted with an opportunity to revisit those events – they‘d “double down” and do it all over again, too.

 

[Jdvn1]

Easy enough to value the short term yes. The long term?? Not so much.

Sure it is.

Future and Present Value of Money
Time Value of Money
If Wikipedia was working for me, I'd link to more information.

The equations used assume that the long term value won't change dramatically (like, due to a successful movie, not that D&D has had any of those), but factoring that in isn't too complicated. There may also be more sophisticated equations they can use, but it's certainly not an insurmountable task.