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.

 

[Micah Sweet]

Novels were a big part of TSRs downfall via mismanagement rather than the novels themselves.

I suspect TSRs death spirial started around 91/92. By that I don't think anyone could have saved the company no matter what they did.

If someone saner took over 1989/90 and didn't print all the settings, killing off Spelljammer early and being sane with the novels printed they may have been able to turn things around.

Over lavish boxed sets being sold cheaper than it cost to produce then we're an issue a well.

But those boxed sets were so very cool.

 

[Dire Bare]

Building on my last post: the good news is that we know all this because Wizards did a lot of forensic accounting work after they bought TSR and were very public in their findings. So they are well aware of what went wrong. They are also much more professionally managed than TSR ever was (Lorraine Williams was the most capable executive that TSR had, and that's saying something).

Edit: Random House didn't carry TSR for 30 years; TSR only existed for around 25 years, and the Random House deal was struck around 1980. But the deal was actually supporting TSR from about 1984 on. The novels were not the primary problem, and in fact helped save TSR for awhile, though that had started to fade by the mid-90s. The main problem were the various settings that TSR was printing in huge quantities - Dark Sun, Planescape, etc. - that could never be profitable and just got them further and further in hock to RH.

But the Random House deal did, in fact, carry TSR for most of its existence as a company. The reasons while all this happened are complicated and tied up in the shift from hobby stores to regular book stores as the primary vendors for D&D, further tied up with 1980s competition between the major book publishing corporations and all kinds of stuff that go way beyond the scope of TSR and D&D. Suffice to say that Random House essentially gambled on this exploding D&D phenomenon and cut it a deal that Gygax and the Blumes, who didn't know what they were doing, took short term advantage of without foreseeing the long term consequences. Lorraine Williams did know what she was doing, a little bit, and managed to use the arrangement with RH to keep kicking the financial can down the road for about as long as possible, but she was in over her head.

Edit 2: Ultimately: TSR's demise happened because Gygax caught lightning in a bottle with D&D and he and the Blumes built TSR around that early, staggering success but never really understood business and so TSR never had a realistic strategy to shift towards normal, managed growth. Once its exponential growth years of the early 80s ended, it was already probably doomed because it was built on a shoddy foundation.

The reason this is relevant today is that we have just seen a second period of exponential growth for the game, and Hasbro/Wizards are now trying to figure out how to land that ship without crashing it. That's what OneD&D is: an attempt to change the game's sales paradigm away from the "editions" model that TSR used, which was always a stop-gap strategy that created continuous boom/bust cycles, into a model of gradual sustained growth and diversification. That is why they are absolutely militant that they are keeping the 5e chassis and just calling the game "Dungeons and Dragons" going forward: they want to stop splitting up their brand.

This is why I think the insistence by so many folks on this board that OneD&D is a new edition is so wrong. Not only is it not a new edition (in the sense that the word "edition" has previously been used by TSR/WotC), it is a complete rejection of the whole editions paradigm. Hasbro/WotC want brand unity.

Thanks for the clarification on the timeframe. The novel line lasted over 30 years, but that bridged between TSR and WotC.

When I say Random House didn't "carry" TSR, what I meant was RH didn't support an unprofitable line for decades. The novel line was very profitable and successful, until it wasn't, and it was huge for Random House and TSR. TSR was able to survive longer than it would have otherwise due to this success, but ultimately screwed up the novel line also.

I just get tired of the same old toxic complaints that the entire novel line was crap and played a major role in the death of TSR. The truth is quite different.

 

[Zardnaar]

But those boxed sets were so very cool.

They were but they should have cost around double or 50% more for the more elaborate ones.

 

[darjr]

They were but they should have cost around double or 50% more for the more elaborate ones.

imagine the screaming if they did.

I was around then and people were grumpy about the price back then.

 

[doctorbadwolf]

The difference is that people, left to their own devices, will generally form cooperative groups. This can be seen, for example, when social order breaks down in the wake of large-scale disasters and people band together to help each other out. This is not universal, and we need laws and society to deal with those inclined to act otherwise, but it's by-and-large true.

Corporations, on the other hand, are explicitly money-making machines. They are expected to maximize shareholder value. They use different strategies for this where some have a more long-term and PR-oriented view of value where they pretend to be good citizens in order to make customers like them and buy more from them, whereas others are more honest and try to squeeze both customers and workers as hard as possible, but they're all primarily designed to maximize value.

Just want to clarify that there is a difference between all corporations and publicly traded corporations. My in-laws' automotive shop is an owner-operated corporation, for instance. In-N-Out is a corporation. Twitter is still a corporation.

Corporation isn't inherently related to shareholders at all, the issue is shareholder owned businesses, specifically because being publicly traded means that all incentives and priorities point toward always expanding profits. IE, because they are publicly traded corporations "it's never enough" is literally, and unavoidably, true.

 

[Alzrius]

No. Dragon Dice was ultimately a failure that did hurt them a bit, but it was small potatoes compared to the real culprit: it was the books.

The topic under discussion was which products specifically were returned in such large degrees that it ultimately brought TSR down. That they had a bad deal going with Random House to begin with isn't in dispute. What's in dispute was whether or not the novel side of things were returned in such quantities that it hastened TSR's demise (which is false).

More specifically, it was the book deal that Gary Gygax worked out with Random House way back in the day that let TSR essentially borrow from RH against the future sales of the books that Random House was printing for them.

I'm not sure if it was Gary Gygax who specifically worked out that deal, or if it was Brian and/or Kevin Blume.

This grew out of control to the point that eventually TSR were having RH print books that they could never realistically sell just to get the advance, and when RH finally called them on it and demanded repayment, TSR was doomed.

Factoring was also a major part of what did them in, as Ben Riggs pointed out in Slaying the Dragon. That was where TSR essentially took out a loan against a forthcoming year's products from a bank, getting something like 83% of the total annual revenue all at once. But that locked them in for the entire year, allowing for no flexibility in their schedule.

 

[Micah Sweet]

They were but they should have cost around double or 50% more for the more elaborate ones.

Well, I'm glad they didn't. I would never have been able to afford them otherwise.

 

[Zardnaar]

Well, I'm glad they didn't. I would never have been able to afford them otherwise.

Well depends on the set. Al Qadim apparently made money Planescapecwas sold at a loss and I suspect Revised DS was as well.

 

[darjr]

Well, I'm glad they didn't. I would never have been able to afford them otherwise.

TSR couldn't afford them either.

 

[darjr]

Imagine if WotC did a box set like that but responsibly at a sustainable price? The outrage would be deafening.