Pathfinder 1E D&D and Pathfinder tied for first place on ICv2 Q3 RPG sales list

[Cergorach]

Like I mentioned previously, I worked at a banking institution, a wholly owned independent subsidiary of a larger banking institution. And while in principle the CEO made the big decisions (based on targets provided by the main office), in practice things weren't always that clear cut, if the CEO wanted to keep his position he better listen when his bosses wanted something. Also, you'll see folks from the main office getting positions of power within the subsidiary.

Let us look at WotC a division of Hasbro, imho in name only WotC. Greg Leeds became WotC CEO in 2008, the seven years previously he was the head of Hasbro's international marketing. So that is Hasbro right at the head of WotC, my best guess is that there's more Hasbro personnel in WotC (everyone at WotC is part of Hasbro, but you know what I mean).

Might not seem like a lot to most folks but there is a big difference between folks who come from a large corporation and folks that work in a small corporation. The CEO has the Hasbro mentality otherwise he wouldn't have gotten the position imho.

It's all just tealeaf predictions, but yours and mine, mostly because we don't have any actual numbers at our fingers. You could be right, I could be right. I only give my view based on my experiences with corps, big changes in products only happen when there's no choice but to make those changes. That motivation is usually motivated by the bottom line, profit. And let's not forget the impressions the folks that actually worked at WotC left regarding management decisions and culture. I remember some startling revelations about how 3E FR source books fared and why that changed/stopped.

 

[Mercurius]

Nice breakdown, Azgulor, and I agree with the gist of what you are saying. However, I'm not sure that your breakdown disproves the "puppetmaster" view. In fact, it reinforces it to some degree, but simply shows how it is more of a "soft mastery," one that is enforced both by the "big bosses" (Hasbro) and the "middle management" (WotC).

A similar situation exists in the book publishing field in general; take sf/fantasy, for example. For the most part, the big publishers only want to publish bestsellers and new authors who have the potential to become bestsellers; the mid-range authors, by and large, are getting driven out. The upper mid-range are able to hang on, but the lower mid-range can't. In many cases it isn't a matter of whether they are profitable or not, but to what degree they are profitable. This is where the "suits" dictate the creative market; certain sub-genres of fantasy simply don't sell well enough (at least based upon the statistics) and most big publishers don't want to risk publishing something too far out of the realm of what has worked before.

To put it another way, the "corporate overlords" do not control the market by saying "You must write this or die!!!" Rather, they say "If you don't reach this level of profitability then your contract won't be renewed."

A smaller company, one that's finances are in control of "fellow gamers," will likely not see the level of profitability as the bottom line. The bottom line will be making great games and making a living (and hopefully a profit).

To put it another way, it is all a matter of priorities. Obviously any business has to at least be able to tread water. And anyone in business is hoping to make a profit. But if you're really in it for love of what you do, and what you produce, then the level of profitability is secondary to the simple ability to create and sell what you love.

I cannot say for sure, but I imagine that Paizo will continue producing RPGs as long as they are able to maintain themselves as company; that is, as long as they don't start losing lots of money. In other words, while I'm sure they want to make as much money as possible, they won't stop doing it if they aren't making bucket-loads. But I imagine if D&D's level of profitability were to dip below a certain level it would be put on cryo-freeze or sold to the highest bidder.

Now it may be that, as you say, Hasbro doesn't care how WotC makes its profit, just as long as they keep on doing so. Hasbro probably gives two shyts about D&D; the execs at WotC are likely the ones that differentiate which of their lines are making what level of profit, and whether or not a lower level of profit can be carried by the lines that make higher levels of profit.

So we have three major levels:
1) Hasbro, who gives WotC a budget and expected level of profit.
2) WotC, who decides how profitable each product line, including D&D, has to be in order to meet Hasbro's "request"; and
3) D&D, who decides what stuff to produce, with the line given by WotC in mind.

But the point being, there is a chain of command and communication. It is not Hasbro that directly dictates to D&D, or so I would imagine, but through the middle-man of WotC, who puts the pressure on our "fellow gamers" at D&D. But everything WotC does in terms of "lording over" D&D is directly the result of Hasbro's dictates.

 

[ggroy]

A smaller company, one that's finances are in control of "fellow gamers," will likely not see the level of profitability as the bottom line. The bottom line will be making great games and making a living (and hopefully a profit).

To put it another way, it is all a matter of priorities. Obviously any business has to at least be able to tread water. And anyone in business is hoping to make a profit. But if you're really in it for love of what you do, and what you produce, then the level of profitability is secondary to the simple ability to create and sell what you love.

The only type of rpg company which can survive, where profitability is secondary or none, is a one-man (or two or three man) operation which publishes everything as pdf-only. The employee(s) of such a break-even or barely profitable one/two/three-man operation, typically have full time jobs doing something else or have an independent source of cash (ie. won a lottery, a sugar daddy, living in parents' basement and still getting an allowance, etc ...).

 

[Azgulor]

It's all just tealeaf predictions, but yours and mine, mostly because we don't have any actual numbers at our fingers. You could be right, I could be right. I only give my view based on my experiences with corps, big changes in products only happen when there's no choice but to make those changes. That motivation is usually motivated by the bottom line, profit. And let's not forget the impressions the folks that actually worked at WotC left regarding management decisions and culture. I remember some startling revelations about how 3E FR source books fared and why that changed/stopped.

Yep, all just speculation.

My own anecdotal evidence is drawn from working for a corporation that was a division of a larger parent company and was later sold off. So I've seen the struggle between field & management, management & executives, & execs & execs from parent company. I've seen selling off & the new buyers paying lip service to growth & profitability yet only focusing on the never-ending "right-sizing" actions. Fortunately, I moved on to greener pastures. (And even more fortunately, on my terms.)

Over the course of my career I work with customers across the spectrum fom finance, manufacturing, healthcare, government, ... you get the idea. I've seen M&As & parent:divisions at various levels within those organizations. The type of micro-management required to maintain the "Hasbro Conspiracy" is possible, even likely, under certain circumstances but it's not sustainable over an extended period of years. Hasbro bought WotC how long ago?

Until reports from ex-WotC-ers begin to surface suggesting that the Hasbro overlords are pounding the poor WotC execs into pudding, I'm going with the belief that WotC is in control of their own success or failure.

 

[ggroy]

One can probably assume that WotC's executives will try to prevent the D&D division from operating at a net loss (ie. more money going out, than coming in) for more than a quarter or so, largely to avoid incurring the wrath of their Hasbro overlords.

 

[prosfilaes]

Common sense & general business practices effectively negate the need for such. If anything, you'd need evidence that Hasbro is micro-managing.

But there's a wide gap between "Hasbro is very hands off" and "Hasbro is micro-managing". And I would expect that when it comes down to selling off major brands like D&D, the people in the division under question should always be more enthusiastic about its value to the company then the people at the top, and hence the drive to sell it off will have to come from above.

The only type of rpg company which can survive, where profitability is secondary or none, is a one-man (or two or three man) operation which publishes everything as pdf-only. The employee(s) of such a break-even or barely profitable one/two/three-man operation, typically have full time jobs doing something else or have an independent source of cash

I feel you're making this a little extreme. Look at Steve Jackson Games; if you look at the reports they've released, GURPS has not been their money maker for at least a decade; for the past few years, Munchkin has held that spot. Is Steve Jackson trying to keep his business profitable? Of course. Is he doing things that a publically traded company might shy away from? I'd say yes.

See for Steve Jackson's report to the stakeholders (not shareholders, because he's the only one of those) Steve Jackson Games 2010 Report to Stakeholders

 

[MrGrenadine]

Common sense & general business practices effectively negate the need for such.

So, in other words, you're going to just take a wild guess, too, but guess the opposite conclusion?

Decisions to hire, promote, demote, or fire staff within WotC are made by WotC execs/management. The decision to launch or scrap products, lines, or IP are made by WotC execs/management.

Just wondering how you know this is true.

I know many love to think of WotC as "fellow gamers" & Hasbro as "evil corporate suits" but unless Hollywood & Shadowrun represent reality -- it ain't frakkin' likely.

On the contrary, it seems to me that (in this case) people love to think of Hasbro as "evil corporate suits" and WotC as "evil corporate suits who take orders from Hasbro".


My point being: Acting like someone who speculates about corporate meddling in WotC's decisions from up the chain is completely off base is kind of silly if all you have to counter is the opposite speculation.

Let's just say that given some of the odd decisions WotC has made over the past couple years, I'm open to the possibility that, at times, there were one or more too many cooks in the kitchen.

 

[jeffh]

So, in other words, you're going to just take a wild guess, too, but guess the opposite conclusion?



Just wondering how you know this is true.



On the contrary, it seems to me that (in this case) people love to think of Hasbro as "evil corporate suits" and WotC as "evil corporate suits who take orders from Hasbro".


My point being: Acting like someone who speculates about corporate meddling in WotC's decisions from up the chain is completely off base is kind of silly if all you have to counter is the opposite speculation.

Let's just say that given some of the odd decisions WotC has made over the past couple years, I'm open to the possibility that, at times, there were one or more too many cooks in the kitchen.

Do you have a specific reason for thinking that all the WotC employees over the years who have, repeatedly and consistently, said Hasbro is extremely hands off are being untruthful? Because I'd just as soon not assume that people I respect are systematically lying without some kind of proof. (To say nothing of the sheer implausibility of no-one in all that time giving the slightest hint of things being otherwise if the conspiracy-theory version of things were correct; even the CIA can't consistently command that kind of loyalty.)

Unless you have powerful evidence for that, I for one would thank you to stop pretending there is any parity whatsoever between the two positions.

 

[Cor_Malek]

(To say nothing of the sheer implausibility of no-one in all that time giving the slightest hint of things being otherwise if the conspiracy-theory version of things were correct; even the CIA can't consistently command that kind of loyalty.)

Bah, CIA chumps! Maybe they got help of those game-designer whisperers that made all the Blizzard employees quiet about Starcraft 2 being made. I'm just sayin'.

IMHO, first and foremost - we're all putting too much weight to DnD as Wizards asset. What would the Big Bad Suits meddle with - the cash making CCG's, or the IP Wizards themselves bought a while back and which is not their main business? And if Hasbro suddenly raises profit expectations for the division - same amount of attention to which will help meet it easier - the 90% CCG's or 10% RPG?


As to pie in the sky "DnD being sold" - damn, I hope not! Especially not to Paizo. I love that bunch, but everyone needs incentive to make their products better. Yay competition!

 

[Azgulor]

My point being: Acting like someone who speculates about corporate meddling in WotC's decisions from up the chain is completely off base is kind of silly if all you have to counter is the opposite speculation.

I'm sorry, I just have to shake my head when I see stuff like this. So my speculation is a silly counterpoint yet the idea of Hasbro dictating the day-to-day operations of an entire division is plausible? Gotta love the Internet.

How do I know? I don't. But having lived in the Parent: Divsion culture for almost 14 years, seeing customers in that culture, & having lived & seen the Merger & Acquistion cycle as an observer and an insider I have NEVER seen the "Hasbro Conspiracy" in action.

Specific to the hiring/firing, sure Hasbro might say "you have to reduce headcount by 7%" but they're not going to select who that 7% should be (although they'd be in those meetings in the initial M&A). Why is this?
A. They don't really care beyond needing to get the staffing to the desired levels.
B. THEY ARE PAYING PEOPLE TO RUN THE DIVISION AND MAKE THESE KINDS OF DECISIONS.

So I'm to believe that the evil money-grubbing corporate masters of Hasbro have forced every bad or unpopular decision WotC has made since being acquired because of their sole concern for profit yet the Hasbro Conspiracists also expect me to believe that Hasbro will waste money on well-compensated positions for the execs at WotC for years so that they can be figureheads? RIIIIIIIIIIGHT.

While I've said all along circumstances could arise to make Hasbro take a more heavy-handed role, I'll stick with my speculation based on common sense, what I've observed in the real world, & business 101 until evidence to the contrary surfaces. If that's silly, so be it.