WotC D&D Gets A New Division At Hasbro

Hasbro is reorganizing and giving tabletop gaming -- Dungeons & Dragons and Magic: the Gathering -- a higher priority.

According to the Wall Street Journal, WotC's revenue last year was $816 million (a 24% increase on 2019). Brian Goldner, Hasbro's Chief Executive, says WotC is predicted to double revenue from 2019 to 2023.

Hasbro is dividing into three 'units' -- Consumer Products (toys, classic board games); Entertainment (film, TV, licensing); and Wizards & Digital (WotC plus digital licensing).

Hasbro bought WotC in 1999 for about $325M.

WSJ News Exclusive | Dungeons & Dragons Gets a Bigger Role at Hasbro

Toy maker Hasbro is reorganizing to capitalize on a pandemic-fueled boom in old-school tabletop games, creating a separate division around the publisher of Dungeons & Dragons and Magic: The Gathering.

www.wsj.com

 

[LuisCarlos17f]

I guess this new division is for the digital market, and also as a idea laboratory to create new IPs/franchises. WotC will sell some printed books and physical products, but more focused into PDFs, videogames and online content.

If you remember some previous post by me you know sometimes I love speculations about merger and acquisition by companies, but this 2021 is going to be very tough year with some radical events, even big multinationals could fall, or at least changed hands.

 

[Ruin Explorer]

I guess this new division is for the digital market, and also as a idea laboratory to create new IPs/franchises. WotC will sell some printed books and physical products, but more focused into PDFs, videogames and online content.

We already know this is the case to some degree, so you don't even have to guess. One of the AAA game studios WotC created is working on a new-IP space CRPG - and obviously if that's successful we might well see spin-offs like a TT RPG.

 

[Reynard]

We already know this is the case to some degree, so you don't even have to guess. One of the AAA game studios WotC created is working on a new-IP space CRPG - and obviously if that's successful we might well see spin-offs like a TT RPG.

I assume it will be a tandem launch.

 

[Ruin Explorer]

I assume it will be a tandem launch.

I don't think there's any particular reason to assume that.

It's incredibly unlikely they'll share a system. Systems that work well for AAA games rarely work well for tabletops and vice-versa. Nor would AAA designers want to be restricted by designing a system for tabletop, when even a moderate-selling AAA can make a lot more money than an extremely successful TT RPG.

Given the positions they're hiring, it looks strongly like the CRPG will be 3D and somewhat action-oriented (like Mass Effect, which some of the people involved worked on), which makes it even less likely that they'll share a system.

Plus the lore and art of the game are likely to be in flux until quite late in development. Again, you wouldn't want to bind an AAA CRPG to decisions made for the sake of a TT RPG which hasn't even been released yet.

Once the AAA is out and established, if it's successful, you might then want to look at making a TT RPG.

 

[Reynard]

I don't think there's any particular reason to assume that.

It's incredibly unlikely they'll share a system. Systems that work well for AAA games rarely work well for tabletops and vice-versa. Nor would AAA designers want to be restricted by designing a system for tabletop, when even a moderate-selling AAA can make a lot more money than an extremely successful TT RPG.

Given the positions they're hiring, it looks strongly like the CRPG will be 3D and somewhat action-oriented (like Mass Effect, which some of the people involved worked on), which makes it even less likely that they'll share a system.

Plus the lore and art of the game are likely to be in flux until quite late in development. Again, you wouldn't want to bind an AAA CRPG to decisions made for the sake of a TT RPG which hasn't even been released yet.

Once the AAA is out and established, if it's successful, you might then want to look at making a TT RPG.

Except WotC is a TTRPG company. Unless this sci-fi game is the beginning of them abandoning that for digital games development (and there is no evidence of that) the intent is very likely to create a "Sci Fi D&D" brand for themselves. As to system: I don't think that is relevant at all. As to Lore: the TTRPG is going to be the leader on that because it is likely to offer a lot more over a longer period than the CRPG.

 

[Ruin Explorer]

Except WotC is a TTRPG company. Unless this sci-fi game is the beginning of them abandoning that for digital games development (and there is no evidence of that) the intent is very likely to create a "Sci Fi D&D" brand for themselves. As to system: I don't think that is relevant at all. As to Lore: the TTRPG is going to be the leader on that because it is likely to offer a lot more over a longer period than the CRPG.

Er yeah no.

This shows a serious misunderstanding of the economics involved, sorry.

An AAA CRPG takes $40-100m to develop (Mass Effect 1/2/3/A all were around $40m, Skyrim/FO4 were around $100m, for example - Witcher 3 was $32-40m for the actual development, but made in Poland, if made in the US would have been about double that). And if it sells well, it'll make a number of times that. No TT RPG that isn't D&D makes anywhere near that much, no does it cost anywhere near that much to develop. D&D itself didn't make anything like that sort of money until very recently.

The idea that they're creating an even $40m budget CRPG to launch a TT RPG which is unlikely to make $40m over it's entire lifespan, even if it sells for decades, is fundamentally not tenable. It would be the tail wagging the dog.

If they weren't making an AAA game, I think what you are saying could be plausible. Spending say, $5m on an "indie"-type game to essentially promote and give a strong aesthetic to a new TT RPG could make sense for a company like WotC. But they've explicitly and repeatedly specified AAA. And you can't make an AAA RPG in the US/Canada/Western Europe (and the studio is in Austin, Texas) for less than $40m in 2021 - you probably can't even make it for that little at all - the last AAA CRPG I heard of having a budget that low released in 2017.

There absolutely is evidence that WotC, long-term, want to go digital. The evidence is extremely clear - not only have they explicitly rebranded to include digital (this announcement), but they have two AAA development studios now. To fund those AAA development studios, they're going need tens of millions, and it'll take years before they produce games, where they'll just be a drag to the tune of $10m+ per studio per year. That's a gigantic investment. It may be more than has ever been invested in D&D (almost certainly more than has been invested in any single edition of D&D). D&D is has been so low-priority for Hasbro/WotC that they haven't even been willing to splurge on artists (which is a relatively low investment), where they will for MtG. Maybe that's also changing - I hope so, maybe D&D will get more investment as a TT game too.

But the idea that they're spending $40m+ on AAA CRPG which will take multiple years to launch (they're still at the point where they have about 15% as many people as they'll need to actually make the game, and they were formed like a year or more ago, pre-pandemic), just to launch what, a sci-fi alternative to D&D, which will, if TT RPG history is anything to go by, be at most a moderate success in no way comparable to D&D? Completely backwards.

 

[Reynard]

Er yeah no.

This shows a serious misunderstanding of the economics involved, sorry.

An AAA CRPG takes $40-100m to develop (Mass Effect 1/2/3/A all were around $40m, Skyrim/FO4 were around $100m, for example - Witcher 3 was $32-40m for the actual development, but made in Poland, if made in the US would have been about double that). And if it sells well, it'll make a number of times that. No TT RPG that isn't D&D makes anywhere near that much, no does it cost anywhere near that much to develop. D&D itself didn't make anything like that sort of money until very recently.

The idea that they're creating an even $40m budget CRPG to launch a TT RPG which is unlikely to make $40m over it's entire lifespan, even if it sells for decades, is fundamentally not tenable. It would be the tail wagging the dog.

If they weren't making an AAA game, I think what you are saying could be plausible. Spending say, $5m on an "indie"-type game to essentially promote and give a strong aesthetic to a new TT RPG could make sense for a company like WotC. But they've explicitly and repeatedly specified AAA. And you can't make an AAA RPG in the US/Canada/Western Europe (and the studio is in Austin, Texas) for less than $40m in 2021 - you probably can't even make it for that little at all - the last AAA CRPG I heard of having a budget that low released in 2017.

There absolutely is evidence that WotC, long-term, want to go digital. The evidence is extremely clear - not only have they explicitly rebranded to include digital (this announcement), but they have two AAA development studios now. To fund those AAA development studios, they're going need tens of millions, and it'll take years before they produce games, where they'll just be a drag to the tune of $10m+ per studio per year. That's a gigantic investment. It may be more than has ever been invested in D&D (almost certainly more than has been invested in any single edition of D&D). D&D is has been so low-priority for Hasbro/WotC that they haven't even been willing to splurge on artists (which is a relatively low investment), where they will for MtG. Maybe that's also changing - I hope so, maybe D&D will get more investment as a TT game too.

But the idea that they're spending $40m+ on AAA CRPG which will take multiple years to launch (they're still at the point where they have about 15% as many people as they'll need to actually make the game, and they were formed like a year or more ago, pre-pandemic), just to launch what, a sci-fi alternative to D&D, which will, if TT RPG history is anything to go by, be at most a moderate success in no way comparable to D&D? Completely backwards.

How much money did D&D bring in last year?

 

[Ruin Explorer]

How much money did D&D bring in last year?

That's not the question though.

The question is "how much did the next best-selling TT RPG after D&D make?".

That's the real question you need to be answering. Because no TT RPG has ever come near to how well D&D is doing right now. In the 1990s, White Wolf eclipsed TSR for a while, but that was because TSR were ailing, and the actual amounts being made were pretty low. In the 2000s, Paizo apparently sometimes sold more books than WotC did with 4E, but only on an irregular basis, and the evidence for total profits is a lot weaker - and again, this was because 4E was underperforming even by the bar of that era. We know 5E is insanely more successful the 3E and 4E were, like no comparison.

(Also do we actually know how much 5E made last year? I'd be interested to know.)

 

[Reynard]

That's not the question though.

The question is "how much did the next best-selling TT RPG after D&D make?".

That's the real question you need to be answering. Because no TT RPG has ever come near to how well D&D is doing right now. In the 1990s, White Wolf eclipsed TSR for a while, but that was because TSR were ailing, and the actual amounts being made were pretty low. In the 2000s, Paizo apparently sometimes sold more books than WotC did with 4E, but only on an irregular basis, and the evidence for total profits is a lot weaker - and again, this was because 4E was underperforming even by the bar of that era. We know 5E is insanely more successful the 3E and 4E were, like no comparison.

(Also do we actually know how much 5E made last year? I'd be interested to know.)

We all know history can't actually be a guide. We have no idea what WotC's next big thing is going to look like, sales wise, because we don't know what the new market is willing to bear. We don't know if a Critical Role level stream is going to promote the new game, or if it is going synergize with digital tools and virtual tabletops in a new, more accessible way. Hell, we don't even know what its pricing structure is going to look like (TTRPG "Games as Service" anyone?).

What we do know is WotC is a tabletop game company. That's where their success comes from. Even beloved, proven AAA game studios completely crash and burn with new games (/Anthem enters the chat) so it makes absolutely no sense for WotC to bank their known successes on a very large unknown risk.

 

[Ruin Explorer]

We all know history can't actually be a guide.

Yeah that's definitely attitude that people high up in businesses succeed with. ROFL.

What we do know is WotC is a tabletop game company. That's where their success comes from. Even beloved, proven AAA game studios completely crash and burn with new games (/Anthem enters the chat) so it makes absolutely no sense for WotC to bank their known successes on a very large unknown risk.

And yet they have.

They have acquired two AAA studios, and are staffing up both of them, they've even announced the projects they're working on. We're talking about them intending to employee 100-200 people per studio, full-time, paying North American salaries, for multiple years, and base salaries in that industry are above average for US salaries (though below-average for software development in general. I mean, even if they averaged at 40k per employee per year (unlikely to be that low), if they had 150 employees, that's $6m/year - and that's just salary - likely to be more like $7.2m including benefits and so on. And that's just to employ the people - now you have to factor in equipment, software, building rental, utilities, and so on, as well as stuff like startup costs. This is huge money. This is a big investment. You don't have to like it, but they're not putting that kind of money into developing TT RPGs, are they? We know they aren't, because if you spent $6m hiring TT RPG people (designers, artists, etc.) on full-time salaries, you'd have hired like half the industry! You'd have enough people to put out dozens of books a year.

And that's for one of the studios - they have two.

They're unarguably investing vastly more in these CRPGs than they are in D&D.

So you can say "that makes no sense" all you like, but you know what really makes no sense? Spending $40-100m to make an AAA CRPG to promote a TT RPG.