WotC Hasbro Bets Big on D&D

During today's 'Hasbro Fireside Chat', Hasbro's Chris Cocks, chief executive officer, and Cynthia Williams, president of Wizards of the Coast and Digital Gaming mentioned D&D, and about betting big on its name. This was in addition to the Magic: The Gathering discussion they held on the same call.

The following are rough notes on what they said.

D&D Beyond

• Leaning heavily on D&D Beyond
• 13 million registered users
• Give them more ways to express their fandom
• Hired 350 people last year
• Low attrition

What’s next for D&D

• Never been more popular
• Brand under-monetized
• Excited about D&D Beyond possibilities
• Empower accessibility and development of the user base.
• Data driven insight
• Window into how players are playing
• Companion app on their phone
• Start future monetization starting with D&D Beyond
• DMs are 20% of the audience but lions share of purchases
• Digital game recurrent spending for post sale revenue.
• Speed of digital can expand, yearly book model to include current digital style models.
• Reach highly engaged multigenerational fans.
• Dungeons and Dragons has recognition, 10 out of 10
• Cultural phenomenon right now.
• DND strategy is a broad four quadrant strategy
• Like Harry Potter or Lord of the Rings or Marvel
• New books and accessories, licensed game stuff, and D&D Beyond
• Huge hopes for D&D

What is success for the D&D Movie

• First big light up oppourtunity for 4th quadrant
• Significant marketing
• They think it’ll have significant box office
• It has second most viewed trailer at Paramount, only eclipsed by Transformers
• Will be licensed video games, some on movies
• Then follow up other media, TV, other movies, etc.
• Bullish on D&D.

 

[Charlaquin]

Well, most don't. Most players never touch loot boxes, or only buy one. But the players who buy them regularly spend hundreds or even thousands. They're called whales because they're big spenders... and they're the main source of revenue in mobile games.

Which is a diplomatic way of saying that this model works by preying on a small, vulnerable subset of the player base. Game devs want to create the impression that these “whales” are all people with tons of expendable income who can just casually drop tons of money on cosmetics. The truth is, most “whales” are ordinary people with gambling additions or other conditions that negatively impact their impulse control, and a few of them are children with parents who had their console save their credit card information.

 

[Charlaquin]

We literally have no idea if that will be true here, or not. I just don't see the point in assuming the worst. But I'm old, and have learned that just makes me (and most everyone else I know) less happy. I choose not to do that to myself anymore.

We do know, because that’s the most profitable route for them to take, and profit is their primary motivation. And we’ve already seen WotC destroy Magic the Gathering this way.

 

[overgeeked]

For me, part of the explicit appeal, the reason I go to this hobby over others, is that a one time purchase can create almost indefinite value. It's not a quirk, it's a feature. So a change in that is a change in the draw.

That said, we obviously can't know now, but if what they add is visual flair to their online arena, fine, whatever. But I certainly can't say it excites me in any way. It adds nothing to my games.

The trouble is what they'll have to do to other VTTs to get people to use theirs. They will quickly tire of the competition and pull whatever licenses are in place and force people to use OGL only content or do it themselves by hand. It's not going to be pretty.

 

[occam]

“D&D is under monetized” is a terrifying thing to hear from the Hazbro CEO.

What else would you expect him to say? "We think D&D has the potential to be a global brand on par with Marvel, Harry Potter, and Lord of the Rings... but we're fine with how much we're making now, so it's all good."?

As a HAS investor and D&D fan, I'm glad they're thinking of ways to make D&D more prominent and monetize the brand to make it a bigger deal, the same way I was happy that Marvel monetized its comic book IP with movies, TV, merchandising, etc. More fun stuff, some of which I will buy and enjoy.

 

[Zaukrie]

I've said my piece. The alternative is for Hasbro to say "DnD is not part of our future, and we are going to stop investing in it." Those are literally the two paths a big company chooses between for products.....I know which I prefer. YMMV, and that's fine. I choose not to assume the worst. Have a great day everyone.

 

[darjr]

OK the four quadrants are for D&D.

1. Blockbuster entertainment
2. Tripple A gaming. (part of the digital push)
3. Amazing set of products. (hobby stores and books and accessories and DnDBeyond).
4. Casual things like toys and games for casual fans.

@Morrus

What is a four-quadrant strategy?

A strategy to extract as much money as possible of of your accessible market. Basically divides customers and products into existing and new and then uses different tactics to maximize each resulting quadrant.

See my post above. It’s what Chris said from the chat what the 4 quadrants are.

 

[Greg Benage]

What else would you expect him to say?

"We believe we can create such great products that we'll be able to drive increasing sales to existing customers while also broadly expanding our market reach."

 

[Charlaquin]

What is a four-quadrant strategy?

As we’ve already been discussing, it’s vague marketing-speak that could mean a lot of things. In the movie industry it specifically refers to the four demographics of women over 25, women under 25, men over 25, and men under 25. I suspect they are more likely referring to the four quadrant model for maximizing growth in sales, which is increase customer base, increase usage, introduce new products, and enter new markets.

 

[darjr]

I'll admit, I might look foolish later, but for how I play the game, I can not imagine a subscription ever benefiting me more than the current model.

The current model is part of what they meant in the chat. The chat is partly about what they are already doing, trying to explain themselves to the investors.

 

[darjr]

"We believe we can create such great products that we'll be able to drive increasing sales to existing customers while also broadly expanding our market reach."

They said this too.