D&D 5E Why I Think D&DN is In Trouble

[Mistwell]

Hasbro stock soared yesterday and there was a lot of reporting on that fact.

Bottom line was this: Boys line is way down (Marvel, Transformers, etc). Girls line and Gaming line is up, with Gaming now the largest part of the company's revenue for all of 2013 (which was not the case in prior years).

WOTC makes up the bulk of the gaming line.

They have a lot of promising stuff in the Entertainment sections of the company with multiple movie lines in the works.

Hasbro also bought back some stock, and issued cash dividends.

So even though Hasbro missed their numbers, there seems to be a lot of faith in the company from stockholders, who increased the stock price by something like 6% in one day (which is huge, it made national news).

For me, this tells me the following: WOTC has a lot more relative power in the company than they used to, since they rule Gaming and Gaming is the most revenue for the company now. WOTC directly controls D&D, and not Hasbro (they simply report as part of WOTC and not as their own division). There's been some sharing of resources and even employees between Magic the Gathering and D&D within WOTC. And we know there is an Entertainment focus on D&D. I think we might see a STRONG level of internal support for D&D Next, which means a lot more money behind it than we're all used to seeing.

We shall see, but I see good things for the D&D brand in the future.

 

[Lokiare]

Hasbro stock soared yesterday and there was a lot of reporting on that fact.

Bottom line was this: Boys line is way down (Marvel, Transformers, etc). Girls line and Gaming line is up, with Gaming now the largest part of the company's revenue for all of 2013 (which was not the case in prior years).

WOTC makes up the bulk of the gaming line.

They have a lot of promising stuff in the Entertainment sections of the company with multiple movie lines in the works.

Hasbro also bought back some stock, and issued cash dividends.

So even though Hasbro missed their numbers, there seems to be a lot of faith in the company from stockholders, who increased the stock price by something like 6% in one day (which is huge, it made national news).

For me, this tells me the following: WOTC has a lot more relative power in the company than they used to, since they rule Gaming and Gaming is the most revenue for the company now. WOTC directly controls D&D, and not Hasbro (they simply report as part of WOTC and not as their own division). There's been some sharing of resources and even employees between Magic the Gathering and D&D within WOTC. And we know there is an Entertainment focus on D&D. I think we might see a STRONG level of internal support for D&D Next, which means a lot more money behind it than we're all used to seeing.

We shall see, but I see good things for the D&D brand in the future.

The problem is the CEO of WotC is a Hasbro plant from their management team. They originally bought WotC with the agreement that WotC would manage itself. Then later Hasbro exercised their option as stock holders to replace the WotC CEO with someone else of their choice. Which has a mid level Hasbro management person loyal to Hasbro. Which is when the nightmare of the lofty sales goals killed 3.5E and then later 4E.

With that little history lesson aside, D&D is such a tiny part of WotC sales that its never mentioned. Only MtG is mentioned. I'd hazard a guess that MtG is 99% of WotC's income and the rest is split between its other properties (D&D included). According to the constraints on 4E since they failed to meet their sales goals, its likely that 5E is working off the income taken in by the D&D brand (not including books, movies, and other products) which is why they were desperately trying to put their PDFs on sale on drivethrurupg.com to make enough money to pay the very small group of full time employees working on 5E.

If 5E fails, its likely that D&D will be shelved as a TTRPG and made into board games, books, and cheap cable movies.

 

[Mistwell]

The problem is the CEO of WotC is a Hasbro plant from their management team. They originally bought WotC with the agreement that WotC would manage itself. Then later Hasbro exercised their option as stock holders to replace the WotC CEO with someone else of their choice. Which has a mid level Hasbro management person loyal to Hasbro. Which is when the nightmare of the lofty sales goals killed 3.5E and then later 4E.

With that little history lesson aside, D&D is such a tiny part of WotC sales that its never mentioned. Only MtG is mentioned. I'd hazard a guess that MtG is 99% of WotC's income and the rest is split between its other properties (D&D included). According to the constraints on 4E since they failed to meet their sales goals, its likely that 5E is working off the income taken in by the D&D brand (not including books, movies, and other products) which is why they were desperately trying to put their PDFs on sale on drivethrurupg.com to make enough money to pay the very small group of full time employees working on 5E.

If 5E fails, its likely that D&D will be shelved as a TTRPG and made into board games, books, and cheap cable movies.

This post is so full of inaccuracies I don't even know where to begin. So I won't, other than to say, you really have no idea what you're talking about.

 

[Lokiare]

This post is so full of inaccuracies I don't even know where to begin. So I won't, other than to say, you really have no idea what you're talking about.

Its not me. It was posted on the WotC forum with links and references for the fact checking. Go take it up with them. They pretty much proved it. The only thing that might be contended is whether 5E is running on its own income or whether WotC is footing the bill with MtG profits to keep it alive. I freely admit that is my own speculation.

http://www.bizjournals.com/seattle/stories/2003/03/10/story4.html?page=all

"The former Coca-Cola executive is fast bringing Wizards into alignment with Hasbro's revised long-term strategic plan. A plan that Huebner helped draft as Hasbro's senior vice president of strategic planning and then helped implement as senior vice president of business development over Hasbro's games segment."

So while working for Hasbro he drafted the plan, and then implemented it as the VP of strategic planning, then he was put in charge of WotC to 'bring it into alignment with Hasbro's revised long-term strategic plan'.

According to Wikipedia 4E was started to be designed shortly after he took over.

All it took was a 10 second www.startpage.com search to find this stuff out. Its really not that hard.

 

[Derren]

So while working for Hasbro he drafted the plan, and then implemented it as the VP of strategic planning, then he was put in charge of WotC to 'bring it into alignment with Hasbro's revised long-term strategic plan'.

And considering how abruptly 4E was discontinued we can guess how well the goals in this plan were met.

 

[TwoSix]

Its not me. It was posted on the WotC forum with links and references for the fact checking. Go take it up with them. They pretty much proved it. The only thing that might be contended is whether 5E is running on its own income or whether WotC is footing the bill with MtG profits to keep it alive. I freely admit that is my own speculation.

http://www.bizjournals.com/seattle/stories/2003/03/10/story4.html?page=all

"The former Coca-Cola executive is fast bringing Wizards into alignment with Hasbro's revised long-term strategic plan. A plan that Huebner helped draft as Hasbro's senior vice president of strategic planning and then helped implement as senior vice president of business development over Hasbro's games segment."

So while working for Hasbro he drafted the plan, and then implemented it as the VP of strategic planning, then he was put in charge of WotC to 'bring it into alignment with Hasbro's revised long-term strategic plan'.

According to Wikipedia 4E was started to be designed shortly after he took over.

All it took was a 10 second www.startpage.com search to find this stuff out. Its really not that hard.

First off, that article is 11 years old.

Chuck Huebner (the alleged Hasbro plant) was only there from 2002 until 2004. Loren Greenwood (who joined Wizards in 1996, i.e. pre-Hasbro) was president/CEO from 2004 until 2008, when Greg Leeds (Hasbro executive) took over.

The design diaries from the two 4e preview books are pretty explicit on 4e development timelines, and they didn't start until 2005, a year after the native-WotCian took over.

Now, obviously, the decision to axe 4e in favor of 5e was done by someone with a Hasbro background, but your references above aren't backing that up.

<That was 10 minutes of Googling, BTW. This stuff isn't hard to figure out.>

 

[Lokiare]

And considering how abruptly 4E was discontinued we can guess how well the goals in this plan were met.

Oh we know they missed the $50,000,000 sales goal by quite a bit. 3.5E missed it by only getting around $35,000,000 and we know for the first year 4E was beating the 3.5E sales. They bragged about it on one of their blogs/articles. Of course what most people don't realize is that even with 90% of the market you won't hit $50,000,000. It was a totally unrealistic goal.

Hopefully 5E is not under those constraints and not operating on a shoestring budget composed of PDF sales and retro game book sales. Hopefully WotC is being charitable and letting them suck off of MtG profits to build the property again.

 

[TwoSix]

Oh we know they missed the $50,000,000 sales goal by quite a bit. 3.5E missed it by only getting around $35,000,000 and we know for the first year 4E was beating the 3.5E sales. They bragged about it on one of their blogs/articles. Of course what most people don't realize is that even with 90% of the market you won't hit $50,000,000. It was a totally unrealistic goal.

Hopefully 5E is not under those constraints and not operating on a shoestring budget composed of PDF sales and retro game book sales. Hopefully WotC is being charitable and letting them suck off of MtG profits to build the property again.

And DDI subscriptions.

 

[Lokiare]

First off, that article is 11 years old.

Chuck Huebner (the alleged Hasbro plant) was only there from 2002 until 2004. Loren Greenwood (who joined Wizards in 1996, i.e. pre-Hasbro) was president/CEO from 2004 until 2008, when Greg Leeds (Hasbro executive) took over.

The design diaries from the two 4e preview books are pretty explicit on 4e development timelines, and they didn't start until 2005, a year after the native-WotCian took over.

Now, obviously, the decision to axe 4e in favor of 5e was done by someone with a Hasbro background, but your references above aren't backing that up.

<That was 10 minutes of Googling, BTW. This stuff isn't hard to figure out.>

Yeah, go back and read my quote. The framework for how things were to be were put into place with Chuck Huebner. Changing internal rules, massive firings, merging departments with Hasbro, etc..etc... Then Loren Greenwood took over and worked within those plans 1 year before 3E was axed for 4E. There's no way Loren came up with the idea of axing 3.5E in less than a year and started working on 4E in 2005 without the planning being in place from Chuck Huebner. In fact it was the plan to make D&D a $50,000,000 property or let it sink or swim on its own that was the Hasbro 'plan' that was put in place by Huebner.

Another helpful link: http://www.enworld.org/forum/showthread.php?315975-WotC-DDI-4E-and-Hasbro-Some-History

Which shows that the unrealistic sales goal was what killed 3.5E.

Some quotes from that link:

"Sometime around 2005ish, Hasbro made an internal decision to divide its businesses into two categories. Core brands, which had more than $50 million in annual sales, and had a growth path towards $100 million annual sales, and Non-Core brands, which didn't.
...
Core Brands would get the financing they requested for development of their businesses (within reason). Non-Core brands would not. They would be allowed to rise & fall with the overall toy market on their own merits without a lot of marketing or development support. In fact, many Non-Core brands would simply be mothballed - allowed to go dormant for some number of years until the company was ready to take them down off the shelf and try to revive them for a new generation of kids."

So its entirely possible that 5E is running on its own income.

 

[TwoSix]

Yeah, go back and read my quote. The framework for how things were to be were put into place with Chuck Huebner. Changing internal rules, massive firings, merging departments with Hasbro, etc..etc... Then Loren Greenwood took over and worked within those plans 1 year before 3E was axed for 4E. There's no way Loren came up with the idea of axing 3.5E in less than a year and started working on 4E in 2005 without the planning being in place from Chuck Huebner. In fact it was the plan to make D&D a $50,000,000 property or let it sink or swim on its own that was the Hasbro 'plan' that was put in place by Huebner.

Another helpful link: http://www.enworld.org/forum/showthread.php?315975-WotC-DDI-4E-and-Hasbro-Some-History

Which shows that the unrealistic sales goal was what killed 3.5E.

The link there says that the Core Brands concept didn't occur until 2005. That would be synchronous with the first design passes on 4e.

More importantly, what does the historical precedent prove? That Hasbro/WotC won't provide enough money to support the growth of D&D? There's just not enough in the tea leaves to either support or deny that.

I do think Mistwell is jumping the gun a bit on assuming WotC will take a more prominent place in deciding Hasbro priorities. Boys Toys sales are down, but that's assumed to be a temporary blip due to the lack of supporting movie releases last year. The 4th Transformer movie, plus Captain America 2 and Spider-Man 2 should push their Marvel sales way up vs 2013. Still, Hasbro is in a pretty solid position, and I don't think any of the executives are looking to rock the boat at WotC, which has 6 straight quarters of growth, both from Magic and other brands.

Some quotes from that link:

"Sometime around 2005ish, Hasbro made an internal decision to divide its businesses into two categories. Core brands, which had more than $50 million in annual sales, and had a growth path towards $100 million annual sales, and Non-Core brands, which didn't.
...
Core Brands would get the financing they requested for development of their businesses (within reason). Non-Core brands would not. They would be allowed to rise & fall with the overall toy market on their own merits without a lot of marketing or development support. In fact, many Non-Core brands would simply be mothballed - allowed to go dormant for some number of years until the company was ready to take them down off the shelf and try to revive them for a new generation of kids."

So its entirely possible that 5E is running on its own income.

True, but that business plan is also nine years old. There's no guarantee that's what still going on. From the earnings report, it looks like Core brands are now called Franchise brands. But yea, 5e may well be running on only its own income. There's just no way to tell.