WotC Hasbro Bets Big on D&D

During today's 'Hasbro Fireside Chat', Hasbro's Chris Cocks, chief executive officer, and Cynthia Williams, president of Wizards of the Coast and Digital Gaming mentioned D&D, and about betting big on its name. This was in addition to the Magic: The Gathering discussion they held on the same call.

The following are rough notes on what they said.

D&D Beyond

• Leaning heavily on D&D Beyond
• 13 million registered users
• Give them more ways to express their fandom
• Hired 350 people last year
• Low attrition

What’s next for D&D

• Never been more popular
• Brand under-monetized
• Excited about D&D Beyond possibilities
• Empower accessibility and development of the user base.
• Data driven insight
• Window into how players are playing
• Companion app on their phone
• Start future monetization starting with D&D Beyond
• DMs are 20% of the audience but lions share of purchases
• Digital game recurrent spending for post sale revenue.
• Speed of digital can expand, yearly book model to include current digital style models.
• Reach highly engaged multigenerational fans.
• Dungeons and Dragons has recognition, 10 out of 10
• Cultural phenomenon right now.
• DND strategy is a broad four quadrant strategy
• Like Harry Potter or Lord of the Rings or Marvel
• New books and accessories, licensed game stuff, and D&D Beyond
• Huge hopes for D&D

What is success for the D&D Movie

• First big light up oppourtunity for 4th quadrant
• Significant marketing
• They think it’ll have significant box office
• It has second most viewed trailer at Paramount, only eclipsed by Transformers
• Will be licensed video games, some on movies
• Then follow up other media, TV, other movies, etc.
• Bullish on D&D.

 

[Scribe]

It's like if you're fighting a giant with a hundred hp, and the fighter and rogue together deal it like 85 points of damage. If you then magic missile it for 15, that's still your death blow.

Wizards always stealing the glory SMH.

 

[Clint_L]

There is some anecdotal evidence that an attempted increase to push hardcover sales hurt TSR towards the end of the company's life, but I don't know if that was hardcover novels or hardcover game books (I suspect the latter, though). Insofar as particular products (or types of products) goes, I seem to recall that it was Dragon Dice that did the most damage to the company.

No. Dragon Dice was ultimately a failure that did hurt them a bit, but it was small potatoes compared to the real culprit: it was the books. More specifically, it was the book deal that Gary Gygax worked out with Random House way back in the day that let TSR essentially borrow from RH against the future sales of the books that Random House was printing for them. This grew out of control to the point that eventually TSR were having RH print books that they could never realistically sell just to get the advance, and when RH finally called them on it and demanded repayment, TSR was doomed.

TSR was a financial house of cards from the moment that its exponential sales increases stopped in the early 80s, and it survived for the next decade and a half basically on increasingly desperate accounting practices. It was probably doomed for a decade or more before it finally died.

 

[Dire Bare]

That's why I said it was the death blow, not the sole cause.

Random House had a contract with TSR that allowed them (and book stores) to pulp unsold books and get reimbursed for them. This, I believe, is fairly standard for mass market books. For a long time, they allowed that reimbursement to be in the form of credit toward new books, but eventually they said "No, we don't want more of your unsellable books, we want actual money, thank you." And that left TSR unable to service any of its other debts, such as paying their printer.

Now, had TSR been in better financial shape to begin with, e.g. by not churning out dozens of unsellable sourcebooks each month and splitting their customer base over a dozen settings, they could probably have weathered that blow. But they weren't, and so they didn't.

It's like if you're fighting a giant with a hundred hp, and the fighter and rogue together deal it like 85 points of damage. If you then magic missile it for 15, that's still your death blow.

Was it the final blow? Who cares? Again, doesn't change the fact that the novel line was incredibly successful for decades.

 

[Staffan]

Was it the final blow? Who cares? Again, doesn't change the fact that the novel line was incredibly successful for decades.

But apparently not as successful as they thought. Did it have the occasional gem? Sure. But there was a lot of crap to wade through to get to them.

 

[Dire Bare]

But apparently not as successful as they thought. Did it have the occasional gem? Sure. But there was a lot of crap to wade through to get to them.

Over 30 years dude. Multiple NYT bestsellers. Random House didn't carry TSR for 30 years, even if ultimately they had to pump the breaks.

The line had the occasional gem, yes . . . but was characterized by solid, good, fun stories. Not crap. Where there some crap stories? Oh god yes, but they didn't characterize the line.

The novels didn't kill TSR. TSR's mismanagement of the novel line, and the Dragon Dice line, and D&D, and just about every aspect of their business killed TSR.

 

[Clint_L]

Building on my last post: the good news is that we know all this because Wizards did a lot of forensic accounting work after they bought TSR and were very public in their findings. So they are well aware of what went wrong. They are also much more professionally managed than TSR ever was (Lorraine Williams was the most capable executive that TSR had, and that's saying something).

Edit: Random House didn't carry TSR for 30 years; TSR only existed for around 25 years, and the Random House deal was struck around 1980. But the deal was actually supporting TSR from about 1984 on. The novels were not the primary problem, and in fact helped save TSR for awhile, though that had started to fade by the mid-90s. The main problem were the various settings that TSR was printing in huge quantities - Dark Sun, Planescape, etc. - that could never be profitable and just got them further and further in hock to RH.

But the Random House deal did, in fact, carry TSR for most of its existence as a company. The reasons while all this happened are complicated and tied up in the shift from hobby stores to regular book stores as the primary vendors for D&D, further tied up with 1980s competition between the major book publishing corporations and all kinds of stuff that go way beyond the scope of TSR and D&D. Suffice to say that Random House essentially gambled on this exploding D&D phenomenon and cut it a deal that Gygax and the Blumes, who didn't know what they were doing, took short term advantage of without foreseeing the long term consequences. Lorraine Williams did know what she was doing, a little bit, and managed to use the arrangement with RH to keep kicking the financial can down the road for about as long as possible, but she was in over her head.

Edit 2: Ultimately: TSR's demise happened because Gygax caught lightning in a bottle with D&D and he and the Blumes built TSR around that early, staggering success but never really understood business and so TSR never had a realistic strategy to shift towards normal, managed growth. Once its exponential growth years of the early 80s ended, it was already probably doomed because it was built on a shoddy foundation.

The reason this is relevant today is that we have just seen a second period of exponential growth for the game, and Hasbro/Wizards are now trying to figure out how to land that ship without crashing it. That's what OneD&D is: an attempt to change the game's sales paradigm away from the "editions" model that TSR used, which was always a stop-gap strategy that created continuous boom/bust cycles, into a model of gradual sustained growth and diversification. That is why they are absolutely militant that they are keeping the 5e chassis and just calling the game "Dungeons and Dragons" going forward: they want to stop splitting up their brand.

This is why I think the insistence by so many folks on this board that OneD&D is a new edition is so wrong. Not only is it not a new edition (in the sense that the word "edition" has previously been used by TSR/WotC), it is a complete rejection of the whole editions paradigm. Hasbro/WotC want brand unity.

 

[Staffan]

That’s like saying all humans are inherently evil and that is why we have laws to not kill, steal, etc.

Both are imo wrong. Not everyone is inherently evil, but some do commit evil deeds regardless, and that is why we have laws. Same for companies.

The difference is that people, left to their own devices, will generally form cooperative groups. This can be seen, for example, when social order breaks down in the wake of large-scale disasters and people band together to help each other out. This is not universal, and we need laws and society to deal with those inclined to act otherwise, but it's by-and-large true.

Corporations, on the other hand, are explicitly money-making machines. They are expected to maximize shareholder value. They use different strategies for this where some have a more long-term and PR-oriented view of value where they pretend to be good citizens in order to make customers like them and buy more from them, whereas others are more honest and try to squeeze both customers and workers as hard as possible, but they're all primarily designed to maximize value.

 

[Zardnaar]

Over 30 years dude. Multiple NYT bestsellers. Random House didn't carry TSR for 30 years, even if ultimately they had to pump the breaks.

The line had the occasional gem, yes . . . but was characterized by solid, good, fun stories. Not crap. Where there some crap stories? Oh god yes, but they didn't characterize the line.

The novels didn't kill TSR. TSR's mismanagement of the novel line, and the Dragon Dice line, and D&D, and just about every aspect of their business killed TSR.

Novels were a big part of TSRs downfall via mismanagement rather than the novels themselves.

I suspect TSRs death spirial started around 91/92. By that I don't think anyone could have saved the company no matter what they did.

If someone saner took over 1989/90 and didn't print all the settings, killing off Spelljammer early and being sane with the novels printed they may have been able to turn things around.

Over lavish boxed sets being sold cheaper than it cost to produce then we're an issue a well.

 

[doctorbadwolf]

I get that corporations are lawful neutral. They don't really "care" about me as a customer as long as I'm happy to buy their product. But they've also learned what doesn't work, such as over-publication and diluting the brand.

I'd say Neutral Evil, or True Neutral at best. They certainly aren't lawful, generally speaking, unless you count actively seeking to change the law in their favor. But the thing to remember is that wizards of the coast is not actually a company. It's a department or Hasbro, which is a publicly traded corporation owned by people who literally would only care if the entire operation burned to the ground if it turned out they couldn't come out of it having made money.

I think merging DmsGuild with DDB and the potential VTT would be a good thing, I think it's probably in the works. Let people publish mods, possibly with custom monster and maps that can be used to run a game. If (and this may be a big if) they can create an interface to better build custom items, classes and subclasses, let people sell them as well.

I think this is probably the single biggest focus for the DDB team right now. If people can publish their DMsGuild content on DDB for people to use with the DDB character builder and sheet, or the encounter builder, or whatever tools are added in the future, that is an enormous increase in monetization.

There are technical and IP hurdles of course, you don't want to hurt the core business but I think there's real options there. The main push for additional profits seems to be in non-game-related opportunities, but that just means that they'll still want to keep the core game healthy and thriving. I just don't see this as a push to publish ever more books hopefully they learned their lesson by now on that.

Yeah, the thing working in favor of this is that what is needed to accomplish it (an easy to use general features system) is also needed to efficiently add official content to the platform, and to actually fully support existing rules, like PC sidekicks and self-adjusting summon and pet statblocks.

 

[Thunder Brother]

And something where fandom can publish their fanfiction, but with different levels: child-friendly, teenage, young adult and NSFW (nothing only+18 but like 3rd Ed or Book of Vile Darkness and Exalted Deeds).

In the list of things definitely not ever happening, this is one of them.

Maybe even Hasbro dares to acquires some comic publisher to publisher licenced comics of those super-famous superheroes.

Which publisher? DC or Marvel? Already locked up tight.

Image? Is Saga x D&D the next big crossover?