Did WotC underestimate the Paizo effect on 4E?

[billd91]

Please keep in mind that M:TG is selling like gangbusters for WOTC (and even Hasbro is mentioning it in their quarterly reports with reporters) so WOTC itself as a company is probably in fantastic shape.

Whether being robust overall matters with respect to D&D, I think, would depend on how the company is managed. Does each division have to pull its own weight? Unless the Magic side of WotC has been suffering the layoffs the RPG side has suffered, I'd hazard a guess that D&D is expected to pull its own weight.

As for DDI, WOTC isn't going to say peep about it until the product is one to two weeks away. WOTC learned its lesson that it better to say NOTHING than even hint at something.

In other words, they're starting to act like a software company, at least with their software. There's a reason software companies are vague about dates if they're positive about features or vague about features when specific with dates.

 

[Shemeska]

Upon the release of 4E, did Paizo gain some customers that WotC lost?? But, and this is important, anyone who thinks that WotC released 4E expecting 100% customer retention is being rather unrealistic. They knew that they would lose customers when 4E released. The amount of money that WotC losing to Paizo is probably rather close to insignificant when compared to WotC D&D revenue as a whole.

How high do you think the 3.x to 4e conversion rate was? I'm curious.

I would have initially guessed 70%, though I've heard estimated rates of just over half that mentioned by people I knew.

 

[mudbunny]

How high do you think the 3.x to 4e conversion rate was? I'm curious.

I would have initially guessed 70%, though I've heard estimated rates of just over half that mentioned by people I knew.

My guess would be around 80%.

But again, that is my guess. WotC, OTOH, probably had an estimate that came within 5% of the actual conversion numbers.

 

[Jack99]

For those that want to do some quick math, the DDI subscribers group (which is only those people that both have an active subscription to DDI *and* have registered on the forums, according to WotC) currently has over 37,000 members. Who are currently paying between $6 and $10 a month in subscription fees.

I was actually about to post just this, when I saw you had beaten me to the punch. 37.000 (and rising) subscribers, at an average $8 a month, that's $3.5 million a year, just from the DDI. Also the subscription number available to us are only those who have an account on the WotC forums.. From personal experience, the real number could easily be 2 to 5 times as big. That's a decent amount of money, just from their digital initiative.

In my mind, there is no doubt that Paizo can't compete with WotC when it comes to $. I am however not surprised that they can compete when it comes to the quality of their products. Paizo are after run and made up largely by great former WotC talent. They made awesome stuff for WotC, why shouldn't they be able to continue doing so, especially with the 3.5 engine freely available due to the OGL.

I play 4e but I also subscribe to the PF adventure paths. Both companies make outstanding products, in each their own way.

There is however only one of them able to use the Dungeon & Dragons brand name, which will reflect a lot on the sales numbers.

Cheers

 

[Riley]

Ummm.... I would be very suprised to hear anything like that. Heck, I'd be suprised if they even had 5% of the RPG market. And I'm a Paizo subscriber.

ICv2 has reported for the 2Q of 2010 the top five selling RPG's are
1: Dungeons & Dragons
2: Pathfinder
3: Warhammer Fantasy Roleplay
4: ShadowRun
5: Rogue Trader/Dark Heresy
So yes pathfinder is firmly in 2nd place for table top RPG sells

ICv2 was citing "Top 5 Roleplaying Games (hobby channel)." I am not suprised to hear that Pathfinder is #2 in the hobby market, but that leaves out the entire book trade, Amazon, and mainstream store trade - and the direct DDI subscription income, as mentioned above.

I'll still be very surprised to learn that Paizo has even 5% of RPG sales.

 

[Steel_Wind]

I think a lot of folks here are missing the actual initial point of the thread. If WotC had had an actual appreciation for the Paizo factor, how would their business decisions surrounding 3.5/4e have looked different?

Given how matters have turned out? I'm not sure, but my guess is that they would have gone with a continuation of the OGL, if for no other reason than to keep all the focus on 4E and not to give birth to a direct competitor.

But that's with PERFECT foresightedness. The real world doesn't work that way. They made the decision they made at the time they made it based upon reasonable expectations. Was it the wrong call, based upon what they knew at the time?

Evaluate the decision on that basis? No. I don't think so. You can blame them for the decision to publish so many 3.5 books so fast -- which lead to the push to release 4E much too early in the dev cycle...

But not on the whole OGL/GSL thing. I can't blame WotC for that decision. It seemed a reasonable one to make at the time, given the quality issues with 3.xx 3rd party material.

*shrug* In any case, there are no mulligans in the business world. You place your bet and spin the wheel and live or die by your business judgment.

Now - it turns out that a culmination of events and circumstances lead to the present market place and a real competitor now selling competitive, as opposed to complimentary products.

But could WotC reasonably see that coming? Maybe - but I think it's a weak maybe. I'm not sure that WotC can be blamed for their lack of "vision" -- though they are paying the price for it, just the same.

If they had an actual appreciation of the fact that one (or more) of their OGL ecosystem would defect and cannibalize heir 4e migration with a successful OGL follow-on, then WotC might have moderated their "dramatic thought leadership" in 4e, and actually produced a product that the majority of their existing customer base might have found more appealing.

I don't think that was really the issue with slower adoption/conversion to 4E at the beginning of the game's release. Sure, I'll agree it may be an issue for some NOW, but THEN? No. I don't think the focus on release was in any manner on what 4E was and wasn't; or, as far as the overwhelming number of consumers were concerned -- what was in the OGL or the GSL (or wasn't).

I think the main issue that 4E had was that it was released two years too soon. There was going to be resistance in the marketplace whether it was the Best. Game. Evar.... or not.

Now, add the market resistance to any new edition, a perception that there was a real departure from previous rules, GSL terms which encouraged retention of rights under the OGL, Dragon/Dungeon cancellation -- and the prior licensing of same to Paizo + the Goodwill that went with it?

Add all that together -- yes -- maybe you could have seen Pathfinder coming and rethought the whole thing a little.

I still think that the major event in all of those circumstances was the timing decision of 4E. Take that away? I think matters change drastically. And that in turn stemmed from a decision to publish a vast amount of 3.5 material in a very short time period.

When whoever it was decided that one hardcover a month was the publication schedule in the 3.5 era? The die was cast at that point in time. Since then, we've been essentially playing out the consequences of that decision in the marketplace.

I put it to you that if 4E was being released next week? Even if it was in exactly the same form as it was released 2+ year ago?

My guess is that it would be received NOW much better than it was THEN.

 

[AllisterH]

re: DDI

I think WOTC itself was somewhat surprised by how well DDI has done. Like I said earlier, if WOTC had known what DDI would become, there would be NO reason to actually bother coming up with the GSL IMO.

Keep the OGL, produce DDI and WOTC would've accomplished the same thing WITHOUT the rancor that the GSL produced.

Same thing with DRAGON and DUNGEON. If DDI had been up and running right at the launch of 4e, I imagne more people would've been accepting of WOTC's decision to return DRAGON and DUNGEON in house.

re: Magic vs WOTC.

Billd91, You're quite right that WOTC doesn't use one game to support another game. WOTC isn't stupid to allow that to happen as this has sinked many a game (hell, not just game) company.

That said, I expect that WOTC has different levels of "what is a success" for each game they produce.

Remember, WOTC isn't JUST M:TG and D&D but also Duelmasters, Axis & Allies and Heroscape. While Duelmasters has sales higher than even M:TG (apparently, in SE Asia, it trades #1 CCG with Yuigi-oh), I doubt that A&A and Heroscape are expected to make sales even approaching half of D&D.

 

[Wayside]

In this one realm, we regularly fail to be able to recognize the difference between solid reliable information, and wild-headed inference. We make dire predictions and come to hefty conclusions based on hearsay and anecdote, treating it as if we've seen the balance sheets.

But...but...some guy posted a graph on his blog without even labeling the Y axis! Surely this must be evidence of something.

ICv2 was citing "Top 5 Roleplaying Games (hobby channel)." I am not suprised to hear that Pathfinder is #2 in the hobby market, but that leaves out the entire book trade, Amazon, and mainstream store trade - and the direct DDI subscription income, as mentioned above.

They don't seem to be treating all the World of Darkness settings as a single RPG, either. I have a hard time believing that the World of Darkness doesn't outsell Shadowrun, if not Warhammer.

 

[Aus_Snow]

You mean me, perhaps? If so, let's not be passive-aggressive about it, please.

No, not "perhaps". And oh, the irony. As ever.

No, I don't do WotC damage control.

In thread after thread, sure you do. Well, attempt. As I said.

 

[Hussar]

No, not "perhaps". And oh, the irony. As ever.

In thread after thread, sure you do. Well, attempt. As I said.

Meh, while on the flipside, there are those who would claim that WOTC is TEH EVIL if they were giving away free puppies.

Funny how you can read a thread like this, and know EXACTLY what people are going to post before you read it.

If you have hard numbers to argue, then, let's hear them. Otherwise, wild speculation is just more dueling anecdotes (Well, my FLGS is selling SO many of my favourite product) and navel gazing.

What would likely blow my mind is if someone's opinion of the level of Pathfinder sales didn't graph in direct proportion to how much they either like Pathfinder or hate 4e.