D&D General Hasbro activist begins proxy fight, urges Dungeons & Dragons spinoff

billd91

Hobbit on Quest (he/him)
I dint know if this hasn’t been mentioned.

Without Hasbro the grand experiment that was 4e would not have been possible, nor the grand endeavor of 5e.

Whatever you think about either edition, D&D would have probably been mothballed for more Magic only projects.

Note I am NOT knocking magic either.
I'm not sure of that. It looks to me more like Hasbro has complicated D&D's development and not in an always good way. I think we're pretty sure from various accounts that one reason 4e got sidelined was because of Hasbro and the $50 million core brand designation and 4e didn't have enough legs for that. By comparison, back in WotC's independent days, it looked like Peter Adkison was more than willing to subsidize other games (like D&D) with Magic's largesse.
I think the success of 5th edition has more to do with Hasbro backing off or adjusting to lessons learned from 4e's record. So I'm less sure they promoted it to that level of success as much as got out of the way.
 

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Zaukrie

New Publisher
The plan could threaten the film/TV plans, and the game. I see nonparticular reason to suspect thst this group has Magic or D&Ds best interests at heart, or would know what the best thing to do would be if they did.
These groups care about short term gain, nothing more. So, ya, the product would suffer and anything that cost money would be scrapped. 100%.
 

nevin

Hero
Why would Hasbro spin off a cash cow?
When companies spinoff like that they have to buy their freedom. They usually end up taking on a ton of debt to pay off the parent company. It is rarely good for the company being spun off. Best case they get stuck for several years paying down debt instead of spending money on income drivers.
 

I think we need to be careful when we use the term "activists" when it comes to these types of issues.

"Shareholder activists" ("SA") can mean a lot of things. For example, SA can push to reduce CEO compensation. Or SA can demand that the company pay its workers more (usually with the idea that increased wages will lead to more long term profits). Or SA can demand that the company provide dividends instead of sitting on cash. And so on.

In this case, the SA is a hedge fund that promises investors returns well-above average. The interest of the SA is to make a large short-term profit, either through the adoption of this strategy, through increased volatility that leads to a scenario wherein the stock rises (a buyout by another company or a stock buyback, for example) or through getting "paid off."

That doesn't mean that the proposal doesn't necessarily have merit; but this isn't about the long-term viability or success of the company either in whole or in component parts.
The “make the world better” activists commonly have resolutions added to the proxy for shareholder votes. Very rarely do these ever get passed and never seen where this helps the stock price. I also am not aware of these types of activists being large investors.
(The counter proof to this is Blackrock which pushes ESG hard and is a large investor as well.)

The “fix the company and increase shareholder value “activists are the more general use of the term. When you hear about activist funds, this is what is being talked about. They try and takeover the Board of Directors and force change.
 

Umbran

Mod Squad
Staff member
I think the success of 5th edition has more to do with Hasbro backing off or adjusting to lessons learned from 4e's record.

It isn't clear to me that Hasbro really had input in the design direction of either 4e or 5e. If someone has evidence that they did, I'd be interested in seeing it. And that's evidence I'm looking for, not plausible narrative.
 

Snarf Zagyg

Notorious Liquefactionist
The “make the world better” activists commonly have resolutions added to the proxy for shareholder votes. Very rarely do these ever get passed and never seen where this helps the stock price. I also am not aware of these types of activists being large investors.
(The counter proof to this is Blackrock which pushes ESG hard and is a large investor as well.)

The “fix the company and increase shareholder value “activists are the more general use of the term. When you hear about activist funds, this is what is being talked about. They try and takeover the Board of Directors and force change.

Eh ... I think that we need to be clear about something, here. I made sure to differentiate different types of SAs (shareholder activists)- some of are motivated by environmental concerns, some by corporate governance concerns, some by financial concerns, some by ethical concerns, etc. This includes everything from "tree huggers" and "higher wage" types to "give us higher dividends" and "you aren't maximizing shareholder value."

I think most people are fairly aware of those in common discussions. However, I think there are also those who benefit from the confusion between the first group and the more specific type of SA here- those who acquire a specific interest in order to immediately capitalize in the short term; common terms used in the past were "Corporate Raider," or "Asset Stripper," or even "Perennial Strike Suit Litigant."

I agree that the umbrella term "activist shareholder" covers all of this (and more). I was making what I thought was the rather banal point that many people were unaware of these distinctions; that they might not know that the asset fund behind this was a Hedge Fund behind this (Alta Fox Capital Management) prides itself on generating "exceptional risk-adjusted returns" and, for example, previously did the same thing with Collector's Universe, Inc., which led to Collector's Universe being sold to an investor group led by ... Nat Turner, you know, the guy they nominated for the board of Hasbro (also, the sale would encumber the target with a lot of debt).

This is all perfectly normal, and I'm not saying it's wrong- I'm just saying that there are different types of shareholder activists, and that there are those who benefit from people unknowingly using the term.
 

billd91

Hobbit on Quest (he/him)
It isn't clear to me that Hasbro really had input in the design direction of either 4e or 5e. If someone has evidence that they did, I'd be interested in seeing it. And that's evidence I'm looking for, not plausible narrative.
This doesn't have anything to do with design decisions - rather management of the product/brand.
 


Yora

Legend
It isn't clear to me that Hasbro really had input in the design direction of either 4e or 5e. If someone has evidence that they did, I'd be interested in seeing it. And that's evidence I'm looking for, not plausible narrative.
The story that I always heard is that Hasbro is very hands off with Wizards and grants them a great deal of autonomy as long as the profits look good. And from all we've heard, recent years have been very good.
While I don't know any sources about that either, this seems to have been the common knowledge for a long while.
 

billd91

Hobbit on Quest (he/him)
The success of the editions has nothing to do with the designs?
Just what do you think you're trying to argue here? What do you think I'm trying to say? It looks to me like you're on some kind of tangent when I was just responding with an alternative viewpoint to darjr's post about Hasbro's impact on WotC's development of D&D.
 

It isn't clear to me that Hasbro really had input in the design direction of either 4e or 5e. If someone has evidence that they did, I'd be interested in seeing it. And that's evidence I'm looking for, not plausible narrative.
The success of the editions has nothing to do with the designs?

I don't think Hasbro's management had any direct input into game design. They don't care if D&D is based on a d20, if there's damage on a miss, or what's canon in the Realms. But their plans do shape the overall game design, and their management has large trickle down effects that determine how designers build mechanics, expansions, and editions/revisions.

For example, my understanding is that selling D&D as a subscription/service rather than simply a book product was a goal from Hasbro in 4e. This indirectly but significantly affected game design by making sure the game was made for use with the online tools. Also, the fact that it didn't meet Hasbro's targets as a subscription service is why 4e was a shorter lasting edition, regardless of how good the design was or how successful or not the book sales were going.

For 5e, Hasbro was specifically aiming for a longer product lifecycle. This is one of the main reasons why we have so few 5e books compared to earlier editions; it's intentionally a slow burn rather than flooding the market. I expect this is something the designers took into account for each new release. It also means that if you partially measure "success" by how long the edition lasts without a major revision, Hasbro's management decisions are a large factor.

There's also a lot of stories about how pre-Hasbro management plans shaped the mechanics and release of 3.5e. And I think it would also be easy to show that major personnel hiring/firing events are based on Hasbro's fiscal cycle.
 

I have to say that the things Alta Fox are claiming don't smell right on a first pass. A lot of the things they talk about don't necessarily sound wrong, per se, but what they are focused on certainly does not match up with what Hasbro considers important in it's major info releases. For example, the brands that Alta Fox talks about as important (other than WotC) aren't what I understand to really be the biggest drivers at Hasbro. And letting go of IP has never been a part of Hasbro's playbook since they transitioned from manufacturing to brand management.

It's possible there's a lot that I just don't know about the scenario; I don't keep up with Hasbro's financials as an investor. And I certainly know nothing about the politics involved. But I also remember the giant nothing-burger from a few years ago when some Youtube investment bros tried to claim Hasbro was going to sell off WotC/D&D. And this really doesn't feel that different. So far.
 

Umbran

Mod Squad
Staff member
Just what do you think you're trying to argue here?

I am responding to the following:

"I think the success of 5th edition has more to do with Hasbro backing off or adjusting to lessons learned from 4e's record."

It is unclear to me in what way in which their "backing off" could have had an impact, unless they'd had fairly direct influence over the design. There seems to me that there's an implication that Hasbro leaned in heavily on design for them to "back off" of, and I'm asking for more direct support for that implication.

I mean, if you find Mearls had said somewhere, "Yeah, Hasbro had a lot of design goals for us to fulfill," then you'd have a great point. But otherwise, it seems an unsupported assertion that Hasbro was forward, to have to "back off".
 

Hasbro is not going to do it because they know the future of the entertaiment are the multimedia franchise. Would you sell your stock package if you know they are going to be more valious in the future? WotC is a rising value. They aren't going to shoot in the foot.

If you are going to sell, then you should wonder who is willing to buy and why.

Other reason is to avoid the spin-off could be adquired by a rival company.
 



Jer

Legend
Supporter
or 5e, Hasbro was specifically aiming for a longer product lifecycle. This is one of the main reasons why we have so few 5e books compared to earlier editions; it's intentionally a slow burn rather than flooding the market. I expect this is something the designers took into account for each new release. It also means that if you partially measure "success" by how long the edition lasts without a major revision, Hasbro's management decisions are a large factor.
I am pretty sure that was a WotC move, not a push from Hasbro. WotC had watched two editions basically crash and burn with an aggressive production cycle for books, they'd had to lay off a huge chunk of the D&D group and they had to try something different. A slower release schedule was the "something different".

Now there was something in the recesses of my memory about someone in the chain deciding that different product lines had to support themselves - so the Magic line wasn't going to carry the rest of the company anymore financially - and I think that also played into those decisions. But again, I think (though I could be wrong) that that was from the high ups at Wizards, not a directive that was pushed on them by Hasbro specifically.
 

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