Could the D20/OGL end up hurting WoTC?

[jmucchiello]

Pramas said:

That's all I'm saying!

Yes, I know these threads have come up in the past, and I believe they are more true now than they were then. I'm constantly reading about people and their AU campaign, their Grim Tales campaign, or some other non-WoTC campaign.

Anyone who has taken basic Marketing 101 knows that there are only so many gaming dollars from the typical gamer to go around in a given month. So, if I have $50 to spend on gaming materials in January, and $25 of that goes to Grim Tales, and another $25 of that goes to Races of Stone (just making up costs here), then that's $25 that WoTC didn't get, but which was made possible through the use of their d20 license.

You are forgetting the network effect:

Yes, you buy AU or GT and you drag a noob into your game and they play and they enjoy it and (MAYBE) buy AU or GT. Eventually you go back to D&D or they find another group and that group plays D&D and lo! and behold that former noob is buying a PHB. Ch-ching. That sale of AU or GT to YOU is a PHB sale to the noob for WotC.

Maybe not today, or tomorrow, but if that new player sticks with RPGs long enough and actually enjoys the D20 based systems, at some point he will find himself in an actual D&D game and the temptation to purchase a PHB will be before him.

Read the old Dancey articles from before 3.0 came out. This was the juju they were selling to upper management. (Did you miss those memos, Chris? )

Is it working? There's no objective way to really tell. Not unless all the d20 publishers and WotC were willing to open their books and we could audit the whole industry. (Yeah, right.)

 

[Rasyr]

A good point, but that brings up a question. Does WotC actually benefit from YOU buying a book? I seem to remember something about them actually getting thier money from distributors, not us lowly consumers.

Well, if he purchased it from a game store, then yes, as that means that the distributor is likely going to re-order at some point.

However, WotC also deals with book trade distributors, who, if they do not sell items ordered, return them to the publisher. Most distributors pay for products 30-60 days AFTER they order it, and book trade distributors (the ones who supply Wlaldenbooks, B&N, etc..) also have clauses that allow them to return books for a refund. These distributors have been known to return books solely to reduce their bills, or to clear a wharehouse prior to end of year accounting. GoO even mentioned large returns as one of the contributing factors in its current situation.

So, if the lost sale of a WotC product would have been purchased through a book store, then there is a chance that it does affect them, in that it is one less the distributor sells, and gets to return to the publisher.

 

[Sir Elton]

Could the D20/OGL end up hurting WotC?

Short answer: Yes . . . and no.

Long answer: Remember when Ryan Dancey explained how people competed against AD&D in the beginning years? "Our system is better than D&D, check us out!" ICE's Arms Law, the supplement made by the company whom Tim/Rasyr works for, was originally designed to be an add on for D&D. Then Rolemaster grew out of that. I bet GURPS, Palladium, and many other RPGs were originally designed as "add-ons" or "tweaks." They grew into their own systems, and they all have the same punchline . . . "Our system is better than D&D, check it out!"

Now we have the OGL, and they all say, "we use the d20 system, check it out!" personally, in the short term, the OGL has hurt WotC where WotC has expected to be hurt. In module sales. But that was in the beginning. Now, the OGL is hurting WotC, still short term mind you, in supplements and accessories. That's why WotC is going to publish modules again.

In the Long Run, nope, no major hurts, just bee stings. WotC is like a human in a world of bees. So, the bees, the companies that serve the d20 system, is helping WotC. So, in the short run, WotC is feeling the sting. In the long run, all these companies are helping WotC.

I personally do not care whether I help or not. the d20 System is like a game console, I.E. Playstation or X-Box. All three major console makers had divulged certain aspects of their console's Input/Output and third party companies create games for Sony, Nintendo, and Microsoft. WotC isn't different in the same regard. Neither is Gold Rush Games, or a few other companies that have their native systems on the Open Game License or a Limited License. If you want to compare the d20 market to any other market, compare it to the Console game market. While its not a perfect match, there is a stark similiarity between the two.

So really, just like Naughty Dog, Electronic Arts, and Sega helps the sales of a Playstation, companies like White Wolf, Malhavoc Press, and my own helps the sales of the Core Rule Books.

 

[kigmatzomat]

Anyone who has taken basic Marketing 101 knows that there are only so many gaming dollars from the typical gamer to go around in a given month. So, if I have $50 to spend on gaming materials in January, and $25 of that goes to Grim Tales, and another $25 of that goes to Races of Stone (just making up costs here), then that's $25 that WoTC didn't get, but which was made possible through the use of their d20 license.

Then you may have missed the point of marketing. While there is a finite amount of gaming dollars per gamer, the goal of marketing is to *increase* the number of gamers. Alternately, find richer gamers.

So far the industry has done the latter more than the former, as the pen'n paper crowd has aged to the point of owning houses and spawning. The increased market penetration is doubtful but I hope it's a glitch. Computer RPGs have captured a large number of people but I'm hoping that as gamers breed and produce new gamers indoctrinated from birth to the joys of paper RPGs that a balance between CRPGs (great for people who can't find other gamers locally or just want a timewaster) and P&P RPGs (more flexibility/creativity & socialization but at the risk of bias & non-game conflict) stabilizes.

 

[Mokona]

d20 vs. Other Dice

Is d20 pushing other "operating" systems out of the market or at least holding them down? OGL obviously created some competition for D&D supplements as secondary purchases to the Player's Handbook.

But has OGL drawn in more players from non-d20 to negate the drawback of internal OGL competition?

Has OGL drawn in more game designers from non-d20 to negate some of the drawback of internal OGL competition?

Has the d20 license drawn in more marketing dollars focused on books printed with the line "The Player's Handbook is required to use material" from non-d20 to negate the drawback of internal OGL competition?

I think those are the correct questions to ask. It's what Ryan Dancey implied all those years ago.

 

[mearls]

I remember one distributor mentioning a couple of years back that in one three month period, there were as many d20 releases as all the products released for the life of 1st Edition AD&D. Now granted, things have cooled out in past year. A lot of companies have dropped out or scaled back, so it's not quite the same as the frenzied years. Nonetheless, I think it's undeniable that d20 as a whole has had an effect on D&D's bottom line. So does WotC care that GR released the Black Company? Probably not. But it should care that Black Company, Hamunaptra, Midnight, Scarred Lands, Warcraft, Diamond Throne, Iron Kingdoms, etc. are all out there and all offering viable alternatives to WotC's own material.

If WotC really did compete with d20 publishers, it's a two way street. Sales wouldn't only flow from WotC to d20 companies. They'd also go from d20 companies to WotC. Given that WotC is the only company in the industry that can offer full color, hard cover books at an affordable price, there isn't much competition to begin with.

On top of that, non-WotC publishers can't really afford to print more than 10,000 or so copies of a book in one go. Even if all those books end up in the hands of people who give up D&D for that new game, they won't put any noticeable dent in the D&D player base.

Distribution-wise, WotC blows everyone out of the water. They're in every hobby store, most chain bookstores, and in many bookstores their fiction line allows them to gain better product placement for RPG stuff. For example, I've seen D&D displays at several Barnes and Noble and Borders locations.

In terms of advertising and spread, D&D has Dragon and Dungeon every month, plus licensed computer games, novels, and a line of collectible miniatures. The 30th anniversary had coverage in variety of mainstream outlets. Many RPG companies try to counter this by latching on to licenses, but that hasn't shown any signs of creating a consistent, evergreen product or gameline.

On top of all this, WotC has far more resources for R&D than any other company in the business. Their designers have far lower word quotas per day, higher pay, and benefits. Their art budget dwarfs everyone else's, and they employ full-time editors and developers to work on books. In terms of QA, they're ahead of everyone else.

In essence, it doesn't matter how many d20 products game companies throw out there. Raw numbers aren't enough to pose a threat to any of these factors. On top of all that, the vast majority of d20 stuff shows up only in speciality stores.

To draw an analogy, WotC is Barnes and Noble and everyone else is a local bookstore. Barnes and Noble doesn't care if there's 1, 5, or 50 small bookstores in an area, as long as no single one of those bookstores has the resources needed to take on the entire B&N chain. That's all that matters.

RPGs aren't a necessity. There isn't a finite pie of money that people have to spend on them. Instead, I believe that the amount of money people spend on them is determined solely by the quality they see available on the market place. They're a pure luxury that people throw their disposable income at. They're like DVDs, or paperbacks. If I want to buy Die Hard and Predator on DVD, but I can only afford Die Hard that day, it's not like I'm never going to buy Predator. I'll eventually get around to it. If I really, really want Predator, I'll be back to pick it up as soon as I have the cash.

RPGs are similar - as soon as a gamer can afford the books he really, really wants, he'll buy them. Now, a lot of publishers think what they produce is top notch, great stuff, but if the sales aren't there, it probably isn't as good as it looks. Reviews and Internet chatter don't mean much when it comes to determining if a book has any sort of wide appeal beyond a narrow slice of gamers who may happen to love the subject matter. A book on bird migrations in Greyhawk might get glowing reviews from the 3 people who care enough about the subject to buy it, but the staggering majority of gamers are just going to ignore it. If a book's sales languish, it has less to do with competition than marketing, quality, utility, or relevance.

Competition between RPG publishers is pure myth. The only real "competiton" lies in avoiding all the pitfalls that can yield a book that has mediocre or poor sales.

 

[Mark]

Could the D20/OGL end up hurting WoTC?

Only if they abandon it with the next edition, and then only for a period of time that could be lessened by throwing more money at the problem. I don't think that there is any doubt that the current success of WotC's D&D RPG (and related products and products lines) is due in a fair measure to peripheral support of the OGL/d20 industry. If WotC were to completely re-invent the game with the 4th edition (so that anything created under the OGL from currently available OGC were virtually incompatible) they would likely have a decent struggle regaining the segment of the market they lost in the backlash.

Part of the success that WotC currently enjoys is due to the nearby shelves being stocked with materials that show how successful WotC is. With older editions, if a customer strayed from the brand they likely picked up a totally different system. At that point it was much harder to regain that customer. Now if a customer picks up another company's OGL/d20 products, they haven't really left the nest and are much more likely to choose a WotC product the next time it hits the shelves. Heck, companies with other game systems have even been funneling their customers toward WotC by jumping on the OGL/d20 bandwagon, essentially acknowledging that it is a worthy system, even as WotC has not been reciprocating.

A single customer might own only the core books and a few others, cherry-picking from the vast field of products coming out over the course of the year. But it is undeniable that the bombardment of compatible materials from WotC, OGL-only/d20-only companies, and companies that primarily work on their own system but dabble in OGL/d20 sends a signal to the market every time a customer interfaces with it, be it through his FLGS, the Internet, or his peer group.

 

[Kid Charlemagne]

Anyone who has taken basic Marketing 101 knows that there are only so many gaming dollars from the typical gamer to go around in a given month. So, if I have $50 to spend on gaming materials in January, and $25 of that goes to Grim Tales, and another $25 of that goes to Races of Stone (just making up costs here), then that's $25 that WoTC didn't get, but which was made possible through the use of their d20 license.

And yes, it may be a small amount on an individual d20 product level, but added up in total, all the Green Ronin's, Sword & Sorcery Studios, Malhavoc Presses, and others of the world in sum have to have some effect on WoTC's bottom line.

It's impossible not to.

The thing that your missing out on is that, yes, WoTC could get that $25 of the gamer's dollar, but it might cost them $25 to get it. And at that point, it really doesn't matter much if you had it or not.

So they're (intentionally) giving up a share of the market, knowing that they can't make money off of those niches.

And in the meantime, the sales of those Hamunaptra boxed sets, and Iron Kingdoms Player's Guides cause people to go out and buy other WoTC products like the DMG or PHB, or MM. Or even the XPH.

So giving up that small share helps them out in many ways - heck they've even used it as a Minor Leagues of sorts - look at Keith Baker and Eberron. They pull some of the best designers from the D20 arena, who have a built-in track record of quality design, and WoTC gets stronger.

 

[mearls]

You are forgetting the network effect:

Yes, you buy AU or GT and you drag a noob into your game and they play and they enjoy it and (MAYBE) buy AU or GT. Eventually you go back to D&D or they find another group and that group plays D&D and lo! and behold that former noob is buying a PHB. Ch-ching. That sale of AU or GT to YOU is a PHB sale to the noob for WotC.

Maybe not today, or tomorrow, but if that new player sticks with RPGs long enough and actually enjoys the D20 based systems, at some point he will find himself in an actual D&D game and the temptation to purchase a PHB will be before him.

That's also a major part of this. Everyone in the RPG hobby ends up playing D&D. The fraction who don't are so small compared to the millions of D&D gamers as to be, most likely, statistically insignificant.

The big benefit to WotC is when someone gets tired of D&D, dives into a different game for a bit, and then gets back into D&D a year or two later. Rather than take up some other hobby, a gamer is more likely to stick around and eventually go back into D&D.

The only thing that could really threaten this network is if WotC produced a long string of bad supplements or if 4e was a repeat of 2e.

 

[mearls]

There's one other point that's worth bringing up - even if the OGL cost WotC sales, in the long run it would still help them. Let's say that WotC does another 2e - they release a long series of supplements that no one wants, and/or they release a 4e that is out of touch with what people want. At that point, we might see d20 stuff tick upward while WotC's sales drop.

Even in this case, d20 could still help WotC. If enough players stick with RPGs because of d20, rather than abandon them altogether, WotC can take advantage of that retention if they get their act together.

I could see a CYA scenario develop where D&D sales plummet and management decides to blame d20 rather than accept responsibility for poor products or line management. In that case, WotC risks turning a bad situation into a diastrous one if enough people stick with d20 rather than upgrade. It might spawn a new network independent of D&D.

When 4e comes out (maybe 2 years away, based on how many freelancers WotC is hiring, but that's a pure guesstimate), I guess some of our questions will be answered, but there'll be a whole new raft of questions.