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.

 

[GDGD]

Wanting a company to be profitable is one thing. Wanting it to maximize profitability is another. Profit always comes at someone's expense – usually customers being overcharged, workers being underpaid, or costs being externalized.

Generally, no. Or at least, those strategies only work for brief periods. If you overcharge customers, you're inviting competition and profits will shrink. If you underpay workers, you're inviting a disengaged workforce who deliver poor-quality results, again damaging profits in the long term. If you know of any companies that have proven, long-term profitability based on a strategy of overcharging customers and underpaying workers, let me know.

Cost externalization is a bit of a different animal. I've seen companies boost profitability by outsourcing functions. For instance, I've seen companies move their customer service call centre and accounts payable departments to India because the wages are a fraction of what you have to pay in first world nations. That's just following the trend started by moving manufacturing to wherever labour is cheap, though, which has been going on for decades. Of note, a lot of game publishers have their books printed in China, but WotC still prints in the US.

 

[darjr]

VTT is a different beast. People aren't paying extra money to play an orc.

Yes they are.



Or at least they could be. No one is getting kicked off dndbeyond because they won’t let a player play their purchased orc.

 

[Malmuria]

Generally, no. Or at least, those strategies only work for brief periods. If you overcharge customers, you're inviting competition and profits will shrink. If you underpay workers, you're inviting a disengaged workforce who deliver poor-quality results, again damaging profits in the long term. If you know of any companies that have proven, long-term profitability based on a strategy of overcharging customers and underpaying workers, let me know.

So no need for a minimum wage law or for weekends, then, because you'll get poor-quality results? No need for workplace safety laws, child labor laws, environmental and anti-trust regulations? Energy companies never price gouge, banks don't have extraneous fees (and/or ever collapse the global economy), heathcare insurance companies always provide cost efficient benefits to their customers? Service workers are never subject to wage theft? You've never tried to cancel your cable subscription?

This is some Ayn Rand stuff. Either that or please tell me how to get to the utopia in which you live. I've run inter-planar planescape games that are less fantastical than this.

 

[Malmuria]

Yes they are.

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Or at least they could be. No one is getting kicked off dndbeyond because they won’t let a player play their purchased orc.

I wonder if certain classes or options are under monetized? Like, how much would people pay for an artificer class, $10? $15? Right now all options of a similar type cost the same, but maybe they should charge more for the more popular options?

 

[GDGD]

So no need for a minimum wage law or for weekends, then, because you'll get poor-quality results? No need for workplace safety laws, child labor laws, environmental and anti-trust regulations? Energy companies never price gouge, banks don't have extraneous fees (and/or ever collapse the global economy), heathcare insurance companies always provide cost efficient benefits to their customers? Service workers are never subject to wage theft? You've never tried to cancel your cable subscription?

This is some Ayn Rand stuff. Either that or please tell me how to get to the utopia in which you live. I've run inter-planar planescape games that are less fantastical than this.

That seems like a bit of an extreme extrapolation on my argument. I'm sure there are endless instances of companies acting unethically. I never said otherwise. I simply said that it isn't an effective strategy for generating and maximizing profits in the long term. How are Enron's profits looking these days? Not too good? How about Theranos? Worldcom? Even Ticketmaster is about to have their come to Jesus moment with the lawsuits they're facing.

The problem I see is this pervasive notion that a successful, profitable company must be a diabolical force of evil. It isn't true. If Hasbro wants to improve profitability, good for them. I certainly don't see any evidence they're violating child labour laws to achieve profitability, or any of the other unethical practices you listed.

 

[Staffan]

Generally, no. Or at least, those strategies only work for brief periods. If you overcharge customers, you're inviting competition and profits will shrink. If you underpay workers, you're inviting a disengaged workforce who deliver poor-quality results, again damaging profits in the long term. If you know of any companies that have proven, long-term profitability based on a strategy of overcharging customers and underpaying workers, let me know.

All of them? I mean, it's pretty rare that a worker is paid as much the value their labor is producing. Instead they are paid according to how hard they are to replace, which is usually a significantly lower price. That's how unions work, by workers collectively agreeing to not undercut one another when selling their labor, and by withholding that labor if their demands are not met.

Cost externalization is a bit of a different animal. I've seen companies boost profitability by outsourcing functions. For instance, I've seen companies move their customer service call centre and accounts payable departments to India because the wages are a fraction of what you have to pay in first world nations. That's just following the trend started by moving manufacturing to wherever labour is cheap, though, which has been going on for decades. Of note, a lot of game publishers have their books printed in China, but WotC still prints in the US.

That's not what I mean by cost externalization. I mean costs (and not just in monetary terms) incurred by a business that are then foisted off on someone else. The main example would be pollution.

 

[MonsterEnvy]

Do you really think they'll implement a reporting system solely to report DM's who won't let players use cheater items?

That also don’t exist.

 

[Malmuria]

That seems like a bit of an extreme extrapolation on my argument. I'm sure there are endless instances of companies acting unethically. I never said otherwise. I simply said that it isn't an effective strategy for generating and maximizing profits in the long term. How are Enron's profits looking these days? Not too good? How about Theranos? Worldcom? Even Ticketmaster is about to have their come to Jesus moment with the lawsuits they're facing.

The problem I see is this pervasive notion that a successful, profitable company must be a diabolical force of evil. It isn't true. If Hasbro wants to improve profitability, good for them. I certainly don't see any evidence they're violating child labour laws to achieve profitability, or any of the other unethical practices you listed.

It's not about being evil; it's just that corporations exist to enrich shareholders. There are all sorts of practices that are good for profits and shareholders that are not good for consumers or workers: price gouging, exploitative conditions, monopolies, deceptive marketing. It most cases, it doesn't really matter if the company is around long term; shareholders and executives are thinking of what increases profit this year.

The business of elfgames is of much lower stakes than banks and energy corporations. But we've seen paizo and noble knight workers unionize due to workplace condition problems and pay issues, we've seen several companies express interest in nfts, and Wotc has a quasi-monopolistic hold on the hobby in general. The idea that these companies, even in a relatively small hobbyiest market, will not seek profits at the expense of their workers or their long-term fanbase is naive.

 

[mamba]

I mean, it's pretty rare that a worker is paid as much the value their labor is producing. Instead they are paid according to how hard they are to replace, which is usually a significantly lower price.

Makes perfect sense, if they paid the value the labor produces they could not turn a profit, by definition.

Of course business when left to its own devices will try to make as much money as possible and pay as little as possible. Labor laws etc. have to establish a framework where this works more to everyone's benefit. Granted, the US is pretty bad at establishing this, compared to all other first world countries at least.

 

[GDGD]

All of them? I mean, it's pretty rare that a worker is paid as much the value their labor is producing. Instead they are paid according to how hard they are to replace, which is usually a significantly lower price.

It's difficult to have a meaningful debate against concepts like "all of them" and "it's pretty rare" without any concrete examples. I run four companies, and none of them overcharges customers or underpays workers. The notion that someone should be paid "as much the value their labor is producing" isn't valid. How is that value determined? Price? So a worker should be paid the full price of what they produce? How would the company cover its overheads if the full price of its products goes to direct payroll? How would it attract investment dollars when it's guaranteed to be not profitable? Your arguments seem to suggest a lack of understanding of the financial realities of running a company.