D&D 5E Hasbro Acquires D&D Beyond For $146M

D&D owner WotC and D&D Beyond have announced that the online tools platform is being acquired by WotC.

DDB’s (former) owner was Fandom, which acquired it in 2018, and which also acquired the Cortex Prime TTRPG system recently. Fandom is producing a range of licensed games using the Cortex Prime system starting with the recent Tales of Xadia: The Dragon Prince RPG. Several DDB core staff members and founders moved on to other projects last year.


This move has been widely expected for some time. The purchase figure being circulated is $146 million. By comparison, when WotC purchased then-D&D owner TSR in 1997, it did so for $25M. Hasbro later purchased WotC for $325M.

D&D Beyond was created in 2017 by Curse LLC, a company owned by Twitch. Fandom purchased Curse in 2018. WotC will be the third owner of the platform.

In other news, back in November WotC applied for a trademark for 'Atomic Arcade' for a variety of electronic gaming applications, and earlier in the year, rumours spread regarding WotC’s plans for its own virtual tabletop platform (VTT) following a survey in which they gauged opinions and allegedly showed off graphically rich 3D screenshots.

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Hasbro, Inc. (NASDAQ: HAS) today announced that it is acquiring D&D Beyond, the leading digital toolset and game companion for the Company’s groundbreaking fantasy franchise, DUNGEONS & DRAGONS, from Fandom. Fandom, the world’s largest fan platform, has owned and operated D&D Beyond since 2019 and has grown the direct-to-consumer business to be the leading role-playing game (RPG) digital toolset on the market with close to 10 million registered users. This strategic acquisition, for $146.3 million in cash, will further strengthen Hasbro’s capabilities in the fast-growing digital tabletop category while also adding veteran talents to the Wizards of the Coast team and accelerating efforts to deliver exceptional experiences for fans across all platforms.

Since 2017, D&D Beyond has helped to power DUNGEONS & DRAGONS tabletop play and deliver the brand's eighth consecutive year of growth in 2021. Over the last three years, the royalty paid to Hasbro by D&D Beyond has represented a significant contribution to the fastest growing source of revenue for DUNGEONS & DRAGONS. The strategic acquisition of D&D Beyond will deliver a direct relationship with fans, providing valuable, data-driven insights to unlock opportunities for growth in new product development, live services and tools, and regional expansions. As part of Wizards, the brand’s leadership will soon be able to drive a unified, player-centric vision of the world’s greatest role-playing game on all platforms.

“The acquisition of D&D Beyond will accelerate our progress in both gaming and direct to consumer, two priority areas of growth for Hasbro, providing immediate access to a loyal, growing player base,” said Chris Cocks, Hasbro Chief Executive Officer. “Hasbro’s gaming portfolio is among the largest and most profitable in the industry, and we continue to make strategic investments to grow our brands, including in digital.”

“This is the perfect next step for the talented D&D Beyond team, who built a transformative digital product that engaged and delighted millions of D&D fans around the world,” said Perkins Miller, CEO of Fandom. “We can't wait to see what this team will do next as an integral part of the D&D franchise, and I look forward to investing in more brands and products to super serve Fandom’s 300 million+ global fans.”

“D&D Beyond has been one of our most valuable partners in the digital space for the past six years and we’re excited to bring their best-in-class talent onto our team,” said Cynthia Williams, President of Wizards of the Coast and Digital Gaming. “The team at D&D Beyond has built an incredible digital platform, and together we will deliver the best-possible DUNGEONS & DRAGONS experience for players around the world.”

Hasbro’s continued investment in Wizards of the Coast’s digital growth for its two iconic franchises, DUNGEONS & DRAGONS and MAGIC: THE GATHERING, is representative of the significant opportunity in PC and mobile gaming, an industry that represented over 3 billion players globally and $129 billion in revenue in 20211. With the launch of Magic: The Gathering Arena on PC in 2019 and on mobile in 2021, Wizards has built a unique ecosystem of best-in-class tabletop and digital play to create deeper player engagement and satisfaction and grow revenue across all expressions and regions. Similarly, with more than 80% of DUNGEONS & DRAGONS fans having already played the game virtually in 2021, aided by online digital platforms such as D&D Beyond, this acquisition accelerates the game’s ability to penetrate new markets, gather valuable consumer insights and provide players with the best DUNGEONS & DRAGONS experience on all platforms.

The transaction is subject to customary closing conditions and the receipt of certain regulatory approvals, and is expected to close during the second or third quarter of 2022. The transaction will be funded out of cash on hand and is expected to be immaterial to revenue and earnings per share in 2022 and accretive to earnings per share in fiscal year 2023 and beyond. The transaction has been approved by both Hasbro’s and Fandom’s Boards of Directors.


 

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Russ Morrissey

Russ Morrissey





Jer

Legend
Supporter
So, they're bringing it back in-house? Hope that it goes better than 3e/4e.
This time they let someone else start a company to do the development work and then bought the company once they had proven they could do it. That's actually the way to do it if you don't already have the in-house expertise in software development needed to mount a project that size (and frankly what they should have done for 3e and 4e as well - I mean they're near Redmond for crying out loud, it isn't like there aren't literally hundreds of people creating startups every day in their immediate area).

Also wonder what this means for the sponsorships they do for streams, like with Critical Role.
That is a good question. I hope they keep it up.
 


Not a huge surprise, and personally I'm glad. No more worries about what they will support going forward or if I shouldn't have purchased as much as I did online.

As long as they don't shake up the dev team too much I don't see this as a bad thing.
Honestly, I hope they shake the sugar (ahem) out of the dev team.

They're godawful, and have been getting worse, and worse, and worse for nearly three years. Before that they were actually improving, gradually. Have you been following the development? It's slowed to almost nothing, and it's been largely features that are either monetized junk, or that nobody was asking for being added, whilst basic stuff, that's in actual rulebooks, is written off as "too hard to implement" - for literally years.

I profoundly hope WotC kick them very hard in the bottom about that.

But yes I am happy we probably don't have to worry about product support. That was always a good reason to hope/expect WotC would buy this too.
 


Also, on the WotC announcement they say DnDBeyond has more than 10 million users. That's much more than I expected
Doesn't surprise me at all, given it includes a lot of unpaid users.

I actually found out about this because my most terminally-online player, who is an unpaid user, told me (a few minutes ago). He was confused because he assumed Beyond had always been owned by WotC, because what an insane business model if not. I noted that their business model was indeed risky as heck.
I wonder if this will have any impact on VTTs who use things like D&D Beyond Importers.
If WotC have any sense they'll avoid intentionally messing with anything like that until they have their own fully-functional VTT on Beyond at the very least, so I don't expect any changes any time soon.
 

deganawida

Adventurer
This time they let someone else start a company to do the development work and then bought the company once they had proven they could do it. That's actually the way to do it if you don't already have the in-house expertise in software development needed to mount a project that size (and frankly what they should have done for 3e and 4e as well - I mean they're near Redmond for crying out loud, it isn't like there aren't literally hundreds of people creating startups every day in their immediate area).

Maintaining the software in an Operations environment still requires technical know-how, especially when dealing with multiple formats (Android, iOS, various browsers). Hopefully, they hired on some of the developers who have previously worked on it. That's the best way. Otherwise, you're just assuming a lot of risk and a heck of a lot of technical debt, because eventually your Operations support is going to need to understand the entire setup (including server infrastructure, database support, failover, and so forth.

I understand the new president of Hasbro has a background at MS, as does the new head of WotC, so hopefully they have been through enough acquisitions to have thoughtfully planned this out.
 

Doesn't surprise me at all, given it includes a lot of unpaid users.

I actually found out about this because my most terminally-online player, who is an unpaid user, told me (a few minutes ago). He was confused because he assumed Beyond had always been owned by WotC, because what an insane business model if not. I noted that their business model was indeed risky as heck.
Their business model got them purchased three times with their founders making money each time, probably.
 

Their business model got them purchased three times with their founders making money each time, probably.
Alternatively, their business model got them sold three times.

Usually a very successful business model gets you sold once, for a vast amount of money. Whereas the perception was that they were something to be "sold off" in the previous two cases. I strongly suspect WotC didn't exactly overpay for them this time, either. In fact I'd be shocked if they weren't sold for a relatively low amount, because WotC had essentially infinite leverage, given WotC could have just moved to 5.5E/6E and left them behind.

Are the founders even still with the company?
 

Oofta

Legend
Honestly, I hope they shake the sugar (ahem) out of the dev team.

They're godawful, and have been getting worse, and worse, and worse for nearly three years. Before that they were actually improving, gradually. Have you been following the development? It's slowed to almost nothing, and it's been largely features that are either monetized junk, or that nobody was asking for being added, whilst basic stuff, that's in actual rulebooks, is written off as "too hard to implement" - for literally years.

I profoundly hope WotC kick them very hard in the bottom about that.

But yes I am happy we probably don't have to worry about product support. That was always a good reason to hope/expect WotC would buy this too.
Not knowing anything about the internals of the development process, the team, the goals and restrictions they were given I'm not sure we can say too much about the team. I've been on software development teams that were great but were given unrealistic goals and deadlines while being forced to take shortcuts. Unfortunately far too often deadlines are set based on unrealistic assumptions by people who either have no clue how much effort this type of development takes or by people who should know better but put on rose colored glasses for management.

In any case I hope WOTC provides appropriate funding and direction going forward. It's all we can ask for. 🤷‍♂️
 

Jer

Legend
Supporter
Maintaining the software in an Operations environment still requires technical know-how, especially when dealing with multiple formats (Android, iOS, various browsers). Hopefully, they hired on some of the developers who have previously worked on it. That's the best way. Otherwise, you're just assuming a lot of risk and a heck of a lot of technical debt, because eventually your Operations support is going to need to understand the entire setup (including server infrastructure, database support, failover, and so forth.
Right - Wizards needs to make sure that in this acquisition they keep the staff happy so they don't go off elsewhere. That's the risk with something like this - hopefully Wizards higher ups understand that the real asset that the D&D Beyond company has is the people who understand how it all works. Lots of companies making acquisitions don't always get that.

I understand the new president of Hasbro has a background at MS, as does the new head of WotC, so hopefully they have been through enough acquisitions to have thoughtfully planned this out.
That's right. Which is why i'm pretty sure they "get" this aspect of it.
 


Umbran

Mod Squad
Staff member
Usually a very successful business model gets you sold once, for a vast amount of money.

If your business model is very successful, you don't get bought at all, because you don't sell a goose that lays golden eggs.

If your business model is mediocre to middling, and you have built functionality that aligns strongly with a bigger fish, that's when you get bought.
 


Jer

Legend
Supporter
Honestly, I hope they shake the sugar (ahem) out of the dev team.

They're godawful, and have been getting worse, and worse, and worse for nearly three years. Before that they were actually improving, gradually. Have you been following the development? It's slowed to almost nothing, and it's been largely features that are either monetized junk, or that nobody was asking for being added, whilst basic stuff, that's in actual rulebooks, is written off as "too hard to implement" - for literally years.
Having worked in software dev and IT for a long time before leaving in frustration to pursue a different career path, what you're describing is very unlikely to be a problem with the "dev team". Those are management issues - what are they prioritizing, how much are they budgeting for hiring new staff, how much are the existing staff having to deal with legacy support issues instead of improvements, etc.

It's unlikely that the dev team needs a kick - they likely just need more people and a direction that isn't "we need to figure out a way to make money off this to please our investors - focus on that". Heck management might not even need a kick - just a change in ownership and the new owners setting down a new direction is probably enough for them to actually start doing the things they want to do instead of floundering around trying to figure out how to increase profits every quarter to make their owners happy.
 


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