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

[Cergorach]

I don't know why people insist Hasbro is on the verge of selling D&D all time. Well, other than wishful thinking.

Companies do not get rich by selling intellectual properties.

Sure, if they were not making a lot of money, they might put D&D into a dormant state, but I see no signs of them doing so. DDI 4E, and a solid line of products do not look like a company that is on the verge of going down the drain. Sure, they are probably not making a ton of money, but there is cash flow, and I assume they are not bleeding rivers of red, the main thing that would attract Hasbro's attention.

I really think the higher-ups at Hasbro are more on the lines of if it ain't broke, don't fix it or waste a lot of time worrying about it.

Sure the situation could come up when Hasbro might have to decide what to do with the brand, but that time is not now.

And as a final point, would Paizo even actually have the resources to buy the D&D IP? I rather doubt it.

Not making a loss on a property is not enough for corporations, if the profits aren't high enough it is also an issue. Money is not made in a vacuum, it is made with other money, folks want a healthy return on that. If there are other investments that the invested money can raise a better return, companies close down lines/companies.

I've worked at a banking institution in the past (as an IT guy) and when management announced that we had a year to turn things around I was surprised, we were making money (a lot of it)! The thing I didn't know was the amount of money it took (the investment) to make those profits, when presented with those numbers I concluded that at the time it was more profitable for the parent company to keep the investment in a bank account and let it accumulate interest. Less risk, less hassle. Companies are not philanthropic institutions that exist for their customers and employees, the exist for a healthy profit. A profit that relates to the risks involved, the more risks, the higher the expected profit.

Some interesting facts:
1997 - WotC bought TSR and the Five Rings Publishing Group for $25 million (total)
1999 - WotC is bought by Hasbro for $325 million

TSR didn't become worth $300 million more in two years, the difference was Magic and Pokemon.

As for Hasbro selling things:
2001 - Hasbro sells Hasbro Interactive (computer game branch) for $100 million
2002 - Hasbro sells Origins and Gen Con

I also believe that Wizards sold the rights to SLA Industries and Ars Magica, but can't find a statement to that effect at the moment.

D&D isn't as valuable as we like to think (compared to other properties like magic and other CCGs). D&D as WotC has it isn't worth hundreds of millions of dollars.

I'm pretty sure that Paizo doesn't have enough spare cash to buy D&D outright, but they are big enough to get a decent loan. Not that I am saying that Paizo could/should/want to buy the D&D brand at this time.

 

[ggroy]

I've worked at a banking institution in the past (as an IT guy) and when management announced that we had a year to turn things around I was surprised, we were making money (a lot of it)! The thing I didn't know was the amount of money it took (the investment) to make those profits, when presented with those numbers I concluded that at the time it was more profitable for the parent company to keep the investment in a bank account and let it accumulate interest. Less risk, less hassle.

For a bank this most likely means, leave the capital "parked" in government treasury securities with short maturities. (In America, this would mean US treasury bills).

 

[nedjer]

D&D isn't as valuable as we like to think (compared to other properties like magic and other CCGs). D&D as WotC has it isn't worth hundreds of millions of dollars.

This might be a bit of a problem if Hasbro do wish to sell-off the D&D brand. On the one hand its got plenty of brand value/ recognition, on the other it doesn't seem to have much IP so far as I can see?

Pathfinder kind of demonstrates that you don't need the original IP to sell 'a D&D', and their relative success (whatever the specifics), perhaps, suggests that D&D is 'a brand' rather than 'the brand'. So Hasbro appear to have a sector leading brand to sell rather than a fully franchised monopoly + IP.

If a company of Piazo's means can easily escape IP costs and approach matching the older brand through building their own brand, then who's ever going to be interested in paying large sums for a slice of nostalgia.

 

[ggroy]

I'm pretty sure that Paizo doesn't have enough spare cash to buy D&D outright, but they are big enough to get a decent loan. Not that I am saying that Paizo could/should/want to buy the D&D brand at this time.

At this point in time (and near future) with the present state of the economy, I don't know if Paizo could even get such a large loan to purchase the D&D brand from Hasbro.

Judging by Paizo's contact list, there's around 25 employees listed, which would place it in the small business (or medium sized business) category. (Paizo most likely has more employees which are not listed, such as people working in their warehouse and online store). Small businesses have been having a hard time getting bank loans in recent years.


There's also other considerations in such a transaction, regardless of who becomes the new owner of the D&D brand (whether Paizo, Mongoose, Cubicle 7, Steve Jackson Games, etc ...). For example:

- Are there any outstanding legal disputes directly involving D&D?

- Are the present WotC D&D employees being kept on board at their present salaries and benefits, after the sale of the D&D brand? Or are they all being fired, once the sale goes through? The new management may want to start off with a "clean slate", by removing most or all remnants of the previous regime. The new management will most likely be egotistical enough to want to design a new edition of D&D according to their own personal "vision", similar to what happened after WotC acquired TSR. Since they are the new owners of D&D, they get to call the shots.

- Will the subsequent owners of D&D still have Random House as their distributor in the book trade business? If Random House does not stay on board, how much less valuable will the D&D property be?

- More generally, will Hasbro/WotC sell the D&D novels division or will they hang on to it? In a situation where WotC declines to sell the D&D novels division, how will the new owners of D&D manage canon for the settings (ie. Forgotten Realms, etc ...)? Will the D&D game settings be made completely non-canon and independent from the novels, regardless of any "world changing events" featured in future novels?

In principle, Hasbro/WotC could sell the D&D brand without selling some of the D&D settings IP. In such a scenario, Forgotten Realms, Eberron, Dragonlance, etc ... could just become pure WotC novel lines, with no corresponding rpg products made by WotC.

 

[ProfessorCirno]

People do realize that Hasbro is very hands off, right? As long as WotC brings in sufficient profits - regardless of what product brings them in - Hasbro won't touch them. And with card games making a steady income, WotC has plenty of leeway even if D&D was failing massively.

And it's not.

So it's not even really worth thinking about.

The idea that D&D will be sold off is pie in the sky thinking at best. It starts with "I don't like this thing" and ends with "I bet if anyone else had this thing they'd change it to something I like!"

 

[Maggan]

People do realize that Hasbro is very hands off, right?

My guess ... or wild stab in the dark ... is that the answer to that question is "no".

/M

 

[prosfilaes]

People do realize that Hasbro is very hands off, right?

Citation needed.

 

[Keith Robinson]

So it's not even really worth thinking about.

Of course it's worth thinking about. Sure, it's just pure speculation, but it's interesting. It's fun And given the length of this thread, someone somewhere has just got to be right!

As for your central point about card games, I tend to agree with you. I think people often think about WotC as being a single brand company (ie D&D), whereas the real money spinners for WotC are their card games and MtG in particular, which still remains very popular. To a certain extent, this relieves the pressure on the D&D brand. Also, the brand has a greater value beyond the game itself, especially in the CRPG market, which won't be reflected in Pathfinder vs D&D trends.

As for the idea of the D&D brand taken over by another company, I have to admit that I rather like the idea, however unlikely it may be. When WotC first took over D&D, they revitalized the game, but seem to have lost their way in recent years and their marketing and PR strategies have all too often been ill-conceived and ill thought through. I don't doubt for a minute that there are a number of companies (and Paizo in particular) who could do a much better job. That said, I don't think it's likely to happen anytime soon.

But it sure is fun to speculate...

 

[La Bete]

Mmph. After years of "wouldn't it be great if I won a bazillion dollars and gave the game back to Gygax", I'm pretty over that sort of 'speculation'.

 

[Azgulor]

Citation needed.

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

Facts:

1. WotC has its own executive management
2. WotC is a division of hasbro
3. Hasbro has its own executive management team
4. Executives are typically highly compensated employees
5. Parent companies set sales or profit targets for divisions
6. Divisions develop their own business plans on how to reach those targets

Now this isn't universally true, especially if the division is performing poorly or if the division is newly acquired. By all appearances, the first is not true and the second is certainly not true any longer.

So, unless Hasbro likes paying its executives to micro-manage a division that already has its own highly-compensated executives (which would be a significant waste of money and resources) it is extremely unlikely Hasbro is "pulling the strings" of those "poor WotC puppets". Believing this implausible scenario to be true implies the following:

• WotC's fiscal health is in serious disarray.
• The execs at WotC are empty suits with a title, salary, & benefits but no real power.

The far more likely scenario is that in the beginning of each fiscal year, Hasbro identifies the financial targets WotC needs to meet. WotC's management team then develops a business plan that comprises the strategies, planned products, & planned services that they feel will enable them to meet those targets. Each individual product line (like MtG & D&D) are then assigned their individual targets. The development of the business strategy, the management of the staff towards meetings those goals, and attaining the profits and controlling the costs of doing business are the jobs of the WotC Execs & Mgmt teams. Understand? It's their job.

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.

Exceptions occur, of course, if D&D weren't profitable yet WotC was fighting to save it after a lengthy period of failure (multiple quarters or years), Hasbro might step in to sell off or close down that piece. The perceived need to do so, however, would imply a serious lack in confidence in the WotC executive team and you'd like see a major shakeup within the upper ranks in the days, weeks, or months to follow.

So what does all of this mean to the Hasbro/WotC master/puppet conspiracy?

It's bunk.

The GSL? WotC's decision (Perhaps in response to Hasbro saying "We want greater control over our IP")

Hiring & Firiing? WotC's decision

New products? WotC's decision

DDI? WotC's decision


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.