Could the D20/OGL end up hurting WoTC?

[Desdichado]

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.

I was going to say this same thing, only you beat me to it and said it better to boot. Congratulations! Of course I bought Die Hard and Predator the same day; the day I joined the Columbia House DVD club...

 

[Dragonblade]

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.

I don't completely agree with this. The logic is flawed. Just because a gamer buys Grim Tales doesn't mean they would have bought a WotC product if Grim Tales wasn't available.

Software and entertainment companies use that same logic when estimating the ridiculous estimates of billions in lost profits due to piracy. Of all the people I know who have pirated copies of this software or that, not one of them would have bought it if the pirated copy was unavailable. Not one. And of all the people I know who have downloaded music, perhaps 1 in 10 people didn't buy a CD because they got a copy from the internet. But of those 10 people, 5 would never have even heard of the artist if it wasn't for their friends telling them about some cool MP3 they downloaded. In other words, the amount of money lost to piracy is far outweighed by the amount of money gained. Last time I checked, record companies were doing just fine.

If we could see the books for every RPG company and run computer simulations for what WotC's profits would be with or without the OGL, I think you would find that some gaming dollars spent on competitive producs would come back to WotC if there was no OGL. But I think this sum would be dwarfed by the extra profit WotC has generated over the past 4 years by growing the d20 market as a whole.

In other words, they have made far more money from the OGL and d20 license than they have lost.

The thing that piracy or something like the OGL really does though, is force companies to create quality products. Being able to see competing products via the OGL, or get a free sample of software, music, or movies really means that garbage will quickly be identified as such.

Those companies that create bad products will make less money than they would have 15 years ago. But those companies that make good products will make more money than they would have. Informed consumers make better educated choices. Good companies will succeed and bad companies will fail.

 

[Dragonblade]

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.

I agree. They absolute worst possible business decision WotC could make in the next few years would be to release a non-open 4th edition, in my humble opinion.

 

[der_kluge]

I see there are a number of people that disagree with me, which is cool. A good debate is always nice.

However, consider the number of people on here who admitted that they used to be WoTC "whores" in that they would purchase everything that WoTC would put out, to keep up with the collection. The number of people who admit to doing that has gone way down as there is just too much product out there to purchase. Luxury items aside, there *is* a finite amount of funds available and even in the Barnes and Nobles scenario, in a city with 50 independent bookstores - *any* book purchased at someplace other than Barnes and Nobles is money being taken away from Barnes and Nobles.

Besides, part of my earlier argument was that differing product lines could precipitate different needs. For example, someone might have Grim Tales and Eberron on their "to buy" list. So, they order Grim Tales and it totally blows them away, and they decide that they're going to wait for Cydonia instead, and to hell with Eberron because GT has convinced them to switch "operating systems" if you will.

One final question, and perhaps this is best served by a poll. Do you believe that the advent of the d20 license has caused you to purchase *more* RPG products than you purchased in previous editions? If the answer to that is yes, than my argument is wrong. If it's not, then my argument may have some merit. The answer may be biased, because we're all older now, and make more money, but it's food for thought. I believe my answer to be no. I'm just as selective now as I always have been.

 

[Rasyr]

Dragonblade - Yes, that might be possibly the worst business decision, from the point of fans, but it might not be so from a business perspective. We already know that 3.5 was planned for THIS year, but was released 2 years early for some reason.

Was that a bad decision for WotC? According to Charles Ryan, it was not, as 2004 was apparently a great year for them. The fans complained a bit, but then went ahead and for the most part switched over. The upper management likely thinks the same result will happen when 4.0 is released, and chances are, they will.

Something that needs to be taken into account is that WotC may not be the one making such a decision. Remember, WotC is owned by Hasbro, a company well reknowned for some of its decisions (and its lawsuits - such as suing a guy for making a parody of a single card from monopoly).

Now, Mearls also said that he thinks that 4.0 will be out in a year or two because of how many freelancers WotC is hiring. In other threads, I have said that I expect 4.0 in 2006, although my reasons for this conclusion are different, being based on past events and the wording of some things that some people have said (including Charles Ryan repeatedly dodging and side-stepping the question in an interview early last year). I have also heard similar conclusions from a number of other publishers, some of whom do have contacts within WotC. However, until WotC makes some sort of announcement about it, it is all conjecture.

Gamers are not the ones who have to worry about, the publishers are. It would be sheer folly for publishers to ignore the possibility, especially when they are seeing various signs, and hearing rumors from people within WotC in some cases, to the effect that it is coming, and no too far away.

And of course, there have been rumors of 4.0 since 3.0 was released and there will continue to be such rumors until 4.0 is actually announced/released, and then the rumors will be about 4.5 or 5.0 and its projected release....

 

[der_kluge]

I don't completely agree with this. The logic is flawed. Just because a gamer buys Grim Tales doesn't mean they would have bought a WotC product if Grim Tales wasn't available.

I wasn't saying that they would. What I am saying is that the demand for RPG products remains flat, despite an increase in the number of products available in the marketplace.

In other words, I am arguing that there is no correlation between RPG sales and the number of RPG products available. Therefore, as the number of RPG products increase, each product gets a smaller and smaller share of the RPG market.

And yes, I do believe that with the initial release of 3.0, many gamers who were previously discouraged by the genre returned happily to the fold. But I don't know that there is any strong evidence which suggests that the current trend of fragmentation within the OGL continues to encourage additional PHB sales. I'm just not seeing it. Perhaps someone who is a retailer here could shed more light on this.

 

[Pramas]

{Long list of irrelevant factors snipped}
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.

You seem to be under the impression that I'm arguing that WotC is in some sort of dire danger from d20 publishers. I'm not. I'm sure WotC is doing fine. The question is has the OGL and d20 helped or hurt their bottom line? Would D&D be more or less profitable if there had been no OGL and d20?

I think the huge number of d20 products has cost WotC sales. Some percentage of their previously captive audience suddenly had a lot more options. Now maybe that only meant each D&D sourcebook sold 5,000 or 10,000 units less than it might have, but that adds up quickly. Furthermore, the money lost was the gravy, the pure profit after all a book's costs have been recouped. Some would claim any lost revenue is made up in sales of core books to these fans. I doubt it. People who buy d20 books probably have the core books already. That's also why this isn't a two way street. Maybe a handful of people bought WotC's psionics rules so they could play in our Mindshadows setting, but lots of psionics fans bought Mindshadows instead of WotC's new release the month it came out.

This doesn't mean I think WotC's RPG business going to keel over and die next year. I just think D&D would be a stronger brand and more profitable had WotC kept it proprietary. Obviously I'm happy that they didn't (as is the average gamer, who now has lots more stuff to choose from). I'm also happy that the health of D&D is not my responsibility. Charles Ryan surely has the devil's choice ahead of him with 4th Edition.

[/QUOTE]Competition between RPG publishers is pure myth. [/QUOTE]

This is so profoundly ridiculous, I don't know where to begin.

 

[Fenes]

One final question, and perhaps this is best served by a poll. Do you believe that the advent of the d20 license has caused you to purchase *more* RPG products than you purchased in previous editions? If the answer to that is yes, than my argument is wrong. If it's not, then my argument may have some merit. The answer may be biased, because we're all older now, and make more money, but it's food for thought. I believe my answer to be no. I'm just as selective now as I always have been.

I can safely say that d20 has caused me to buy more rpg products than before. With d20, the chance that I can use something in my actual games is much higher than with a non-d20 book, so I buy more books.

 

[Henry]

This doesn't mean I think WotC's RPG business going to keel over and die next year. I just think D&D would be a stronger brand and more profitable had WotC kept it proprietary.

I hve to debate that, myself, given that nothing would have changed the situation as it stood in the late 1990's. D&D would have picked up short term with the release of 3E, the pool of gamers would not have grown significantly, and the different companies would have still been cannibalizing each others' players and sales. Long term, OGL means that the market itself can grow when the number of game systems decrease and split mindshare, among other things.

Guess I'm a Danceyist, at heart.

Competition between RPG publishers is pure myth.

This is so profoundly ridiculous, I don't know where to begin.

More accurately, I'd say, "competition between RPG publishers is futile." Looking at it from the overall market perspective, to fight fellow publishers for each others' sales is like the animals that fight over the table scraps that fell from WotC's table. Instead of fighting for what falls, it's more profitable to work together to overturn the table. That's one reason why I like to see coordinated projects like Malhavoc's and Necromancer's tie-ins over AU, or like the add-ons to M&M through the Superlink line - what one company cannot accomplish by itself can be MUCH better handled by two or more companies coordinating a release of material for the same game or system. But instead, what more often happens is AU competes with Midnight, which competes with Oathbound, etc. etc. The big dog is content, as Mike Mearls said, as long as the minor companies are fighting each other, instead of them.

 

[Staffan]

the PH, DMG, and MM have sold hundreds of thousands of copies (certainly at least 200,000 each).

I have a vague memory of some business guy from WOTC (Jim Butler?) mentioning that the first print run of the PHB was 500,000 copies, and had sold out. That was about 6-12 months after PHB 3.0 was first released, about the same time they raised the price on the core books from $20 to $30.