RPG Evolution: The Child Becomes the Parent

D&D is doing really well, well enough that Wizards of the Coast is starting to take over its parent company, Hasbro. So what's next?

Graphic courtesy of Hasbro.​

Chris Cocks is Doing Really Well​

The untimely death of Hasbro's CEO Brian Goldner triggered a leadership shuffle that resulted in President and Chief Operating Officer of WOTC, Chris Cocks, being named Hasbro's Chief Executive Officer and a member of the Board of Directors, effective February 25, 2022.

Cocks was named CEO of WOTC on April 11, 2016. He was CEO of WOTC for six years before being promoted to lead Hasbro. Cocks in turn was replaced by Microsoft's General Manager and VP of Gaming Ecosystem, Cynthia Williams.

The move is surprising until you take into account just how well WOTC is doing.

Wizards is Doing Really Well​

As Russ posted previously, WOTC made over $1 billion in total sales in 2021, including $952M in tabletop games (some of that at least due in part to Magic: The Gathering sales). Tabletop games grew 44% and accounted for 74% of the $1.3B sales for WOTC in 2021. WOTC was responsible for a staggering 72% of Hasbro's total operating profit.

With numbers like that, it's not surprising that Hasbro noticed. Investors have noticed too.

"Let My Wizards Go"​

Alta Fox Capital Management, an activist shareholder group, has a problem with Hasbro's Brand Blueprint. Here's what Hasbro has to say about their strategy:

The Brand Blueprint is Hasbro’s strategic framework for bringing our brands to life in exciting new ways. We see our brands as story-led consumer franchises that we bring to life through compelling content across a multitude of platforms and media, with a wide variety of digital experiences, music, publishing, and location-based entertainment, and an impressive array of consumer products, spanning a broad range of diverse categories. Each brand activates the Blueprint differently, but the result is consistent: deeper consumer engagement, innovative brand and product experiences and increasingly expansive opportunities for our portfolio.

We can see this in action in how the D&D brand is being leveraged across multimedia. Hasbro's strategy is to do the same with all of its brands, including My Little Pony and Transformers. The idea is that Hasbro is not merely a toy or game company, but a brand company that spins products out of its core brands, from toys and games to movies and esports.

Activist investors Alta Fox Capital feels differently:

We believe Hasbro, Inc. (“Hasbro” or the “Company”) is severely undervalued due to its ineffective “Brand Blueprint” strategy, flawed corporate structure and consistent misallocation of capital ... Alta Fox sees a three-year path to $200/share, more than 100% higher from current levels, with a refreshed Board, new strategy, improved capital allocation and tax-free spin-off of Wizards of the Coast.

To address what they see as these inequities, Alta Fox nominated a slate of five candidates to the Board of Directors to "improve alignment, restore accountability, bring fresh ideas and ultimately reverse Hasbro’s chronic underperformance."

We're finally at the point that investors like Alta Fox think WOTC is now better off without its parent. It's no accident that Alta Fox is making this proposal at the same time a new CEO from WOTC has been announced. Hasbro's response:

The Board and the Board’s Nominating, Governance and Social Responsibility Committee will review the proposed director nominees and present its recommendation regarding director candidates in the Company’s proxy statement and accompanying WHITE proxy card, which will be filed with the U.S. Securities and Exchange Commission. Proxy materials will be mailed to all shareholders eligible to vote at the Company’s 2022 Annual Meeting. The date of the Annual Meeting has not yet been announced.

Whether or not Alta Fox's play will work remains to be seen. But one thing is certain: the D&D and Magic: The Gathering brands are so powerful that they are now calling the shots for older board game companies. Here's hoping that's good news for fans of D&D.

 

[LuisCarlos17f]

My opinion is Entertaiment-One will produce horror action-live movies that maybe set easily in a (until now unknown) dark domain from Ravenloft (even some underground secret soviet lab during the Cold War). We will see more videogames, one of them a survival set in Dark Sun. Witchlight will be the new setting, enough family-friendly to sell toys. Throne of Eldraine and Innistrad also will appear as D&D sourcebooks.

Gamma World will appear as a videogame, and later as tabletop game, with antropomorphic animals to be sold as toys (or skins in Fortnite). Here it is important to notice the firearms are very powerful, but the ammo has to be saved for the worst enemies, then the power balance of the encounters has to be designed meticulously. After this and with the experencie adquired then to dare to publish d20 adaptations of no-fantasy franchises, for example Overwatch, Starcraft, Mass Effect or Fortnite: Save the World.

Some forgotten Hasbro's franchises could find a second life thanks a mash-up version in the D&D multiverse.

Maybe the partnership with Paramount will continue, but Disney and Warner/DC have noticed the potential of the TTRPGs to promote their own franchises. Videogames move more money, but also these need more money, staff and time to launch new titles.

My suspects are the links between Hasbro and Microsoft will be stronger. I love speculations, but we shouldn't bet about possible future mergers and adquisitions. Maybe Hasbro starts to buy 3PPs because other companies also want those new IPs.

 

[Rhineglade]

And the meek shall inherit the earth.

 

[WageMage]

I feel like the D&D movie will determine how Hasbro moves forward. If it does well, Hasbro will probably push hard to make more non-gaming media in an effort to make D&D a household name (like GIJoe or My Little Pony).

Other than the 80s cartoon, D&D hasn't had much luck in movies or TV shows. Their bread and butter is in games (whether it be video games, ccgs or tabletop). As long as they don't stray too far from their fans, they should continue to succeed. But I feel a lot rests on the success of the movie in terms of what's next.

 

[Oofta]

I feel like the D&D movie will determine how Hasbro moves forward. If it does well, Hasbro will probably push hard to make more non-gaming media in an effort to make D&D a household name (like GIJoe or My Little Pony).

Other than the 80s cartoon, D&D hasn't had much luck in movies or TV shows. Their bread and butter is in games (whether it be video games, ccgs or tabletop). As long as they don't stray too far from their fans, they should continue to succeed. But I feel a lot rests on the success of the movie in terms of what's next.

The Legend of Vox Machina is doing quite well on Amazon Prime, even if it isn't a Hasbro property. It does show that D&D can be successful.

 

[LuisCarlos17f]

A D&D show can be successful, and it can fail, and the same about Transformers, G.I.Joe, Ninja Turtles, Star Trek, Star Wars, Conan the barbarian.. Of course, it was so easy then movie produces also would create their own fantasy franchises. Sometimes they push the right keys, and other it is a flop.

A lot of things can happen, for example, Paramount mergers with Comcast, and then Hasbro can sell more products based in Universal's IPs, or a crossover Universal's monsters with Ravenloft. If Hasbro discovers the secret to produce blockbusters that worked in the hitbox then they would be a step to become a media empire as Disney or Warner.

Other possible option is Paramount with Forgotten Realms, but other lines (Mystara, Dragonlance, Greyhawk...) licenced to other companies (Warner, Disney, Netflix..). Maybe it is a crazy idea and we we should doubt about that. Maybe Hasbro wants to create videogames with their own studio, or some deal with Microsoft.

 

[Mark Craddock]

And the meek shall inherit the earth.

And the geek shall inherit the earth.

 

[Mark Craddock]

The Legend of Vox Machina is doing quite well on Amazon Prime, even if it isn't a Hasbro property. It does show that D&D can be successful.

I think what we all know, but Hollywood doesn't seem to is that any property can be successful if the people involved understand it and take the proper approach with the quality of the product. Sadly, quantity seems to be what makes money for Hollywood.

 

[The White Sorcerer]

'To address what they see as these inequities, Alta Fox nominated a slate of five candidates to the Board of Directors to "improve alignment…"'

I hope they go back to just the Law and Chaos axis.

 

[Oofta]

I think what we all know, but Hollywood doesn't seem to is that any property can be successful if the people involved understand it and take the proper approach with the quality of the product. Sadly, quantity seems to be what makes money for Hollywood.

Yeah. Do we really need another Spider-Man/Batman/Avengers/Fast and Furious movie? Don't get me wrong, I really enjoyed the most recent Spider-Man movie, but I'm getting prequel/sequel/remake-itis.

I mean, come on already! Branch out! How about a Fast and Furriest movie. I can see it now, Vin Diesel in a Bugs Bunny suit carrying a giant stuffed carrot speaking in his usual gravelly voice "What's up ... doc.". Practically writes itself.