Why did Hasbro buy WotC

[painandgreed]

There's also the D&D license. While the game may not make that uch money, if it ever becomes profitable to make a movie or toys based off that movie with the D&D license, they're already in position like Star Wars.

 

[Len]

Not nearly in the same ballpark as Pokemon. There's just no comparism.

I wasn't comparing. The question was, Why keep the company? "They're only making a decent profit - Let's dump them!!!" - makes no sense to me.

 

[BiggusGeekus]

I wasn't comparing. The question was, Why keep the company? "They're only making a decent profit - Let's dump them!!!" - makes no sense to me.

Gotcha. Apolgies. OK...

Remember that sharehodlers don't care if RPGs are making a good profit for the industry. They care about the bottom line. If you have a product that "only" makes a 5% profit an argument can be made that:

a) the managers don't know what they're doing and the profit should be higher
b) the product has an inheriently low margin and is therefore risky
c) Ugh! Small Numbers! Scary! Run!

a and c are the usual scapegoats, but there is a definate case to be made for b. D&D is doing fine today. What about tomorrow? We gamers know that the mid to late 90s were a boondoggle due to poor management, a spike in the price of paper, and a CEO who hated the company she ran. But to a big shareholder that's not exactly an uncommon occurance. If D&D can't survive a few setbacks, is it worth investment?

I don't have an answer to this. On some levels, I admit to playing devil's advocate here. On others, I think it's a hard question to answer.

 

[Campbell]

I wasn't comparing. The question was, Why keep the company? "They're only making a decent profit - Let's dump them!!!" - makes no sense to me.

It often makes sense if the capital gained from the sale of a company or property can be used to acquire other resources/companies that might improve your organization's aggregate profit margin.

 

[Krug]

There's also the D&D license. While the game may not make that uch money, if it ever becomes profitable to make a movie or toys based off that movie with the D&D license, they're already in position like Star Wars.

And don't forget D&D Online (when it's finally released, that is). If it has numbers anywhere near World of Warcraft or Everquest, Hasbro will be very, very happy.

 

[Steel_Wind]

Again, the "why keep the company" rationale is in WotC's patent on the CCG.

Lightning does strike twice for CCGs. While CCGs are not doing terribly well right now, the return on CCGs is very substantial when you manage a hit. In fact - it's massive.

A fad that hit and then hit again 8 years later may well hit again.

In the meanwhile - while the upside remains monstrously large, the present returns are decent enough and they pay their own bills. And yes - D&D has a 30 year history and is a staple game with significant upside as well - most especially in electronic licensing.

 

[Len]

It often makes sense if the capital gained from the sale of a company or property can be used to acquire other resources/companies that might improve your organization's aggregate profit margin.

Well, that's something I can't judge. To be fair, I don't even know if WotC's products are profitable, I was just hypothesizing hopefully that Hasbro might not feel they have to dump them like a load of ripe manure.

I have tried to figure out from Hasbro's annual reports if WotC and/or D&D was making money, but those figures aren't in there (or I couldn't dig them out).

 

[mythusmage]

Wizards handles TCGs for Hasbro, including the GI Joe and Kids Next Door TCGs. Then you have all the RPGs and RPG material that either came with Wizards or were assigned to Wizards after the purchase. WotC has a niche in the Hasbro world and fills that niche rather well.

 

[Wulf Ratbane]

Lightning does strike twice for CCGs. While CCGs are not doing terribly well right now, the return on CCGs is very substantial when you manage a hit. In fact - it's massive.

You're essentially printing money.

 

[Ranger REG]

Wizards handles TCGs for Hasbro, including the GI Joe and Kids Next Door TCGs. Then you have all the RPGs and RPG material that either came with Wizards or were assigned to Wizards after the purchase. WotC has a niche in the Hasbro world and fills that niche rather well.

WotC also handles Avalon Hill strategy boardgames, so basically they got the top two selling product types in the market lining their pockets, with RPGs falling in a distant third place.