WotC Hasbro's CEO Reports OGL-Related D&D Beyond Cancellations Had Minimal Impact

Hasbro held a quarterly earnings call recently in which CEO Chris Cocks (who formerly ran WotC before being promoted) indicated that the OGL controversy had a "comparatively minor" impact on D&D's revenue due to D&D Beyond subscription cancellations. He also noted that D&D grew by 20% in 2022 (Magic: the Gathering revenues grew by an astonishing 40% in Quarter 4!)

WotC as a whole was up 22% in Q4 2022.

Lastly, on D&D, we misfired on updating our Open Gaming License, a key vehicle for creators to share or commercialize their D&D inspired content. Our best practice is to work collaboratively with our community, gather feedback, and build experiences that inspire players and creators alike - it's how we make our games among the best in the industry. We have since course corrected and are delivering a strong outcome for the community and game.

 

[Mirtek]

No, it would not be "necessary". All actions are choices. Even publicly owned companies have choices, and let's not have anyone repeating facile myths about them always having to do the most short-term profitable thing by law - that's complete bollocks.

WotC is not a charity either. Whether someone else can make a living on their product is of no concern to them. When they do deem it beneficial they enable it, when they do not.

The OGL/SRD was not gift to the world but a calculated move to dominate the market and kill all other systems. At least for the management. Maybe the architects of it truly just wanted to give a git to the gamers, but they certainly had to hide this intention and wrap it in promises of market dominance to get green lights to proceed from management.

It all but worked. Remember when almost everything was suddenly D20? Even if it had a long history of something else. It was jump on the D20 bandwagon or die

When their internal calculations and forecast now say that a couple hundred small RPG companies being able to make a living or not is inconsequential for the further growth of the market, then the survival of those small publishers stops being of concern to WotC.

If they see an opportunity for growth that just so happens to kill those companies as a side effect, that side effect will not cause them to hesitate for a second.

Not that they immediately set out to kill them or merely see this as a positive side effect, it's just not longer a factor at all. Decision will not be taken just to kill them, but no decision will even be taking their death or survival into consideration at all.

Whatever fallout hits those small publishers will not be of any concern to WotC when they they a good chance to secure a lions share of future market trends (e.g. become dominant in VTT).

Whether they look only at short term or at least midterm if not long term is mostly up to the current leadership. If the CEO only has a 7 year contract of which he actually only plans to fulfill 5 years before going into full paid garden leave for the rest while a successor takes over, than expect brutal short term thinking.

 

[UngeheuerLich]

Thank you, a perfect way to describe it. The whole "intent" question is one of those "inconvenient truths" and it's easier just to try to ignore it. Unfortunately I think those that don't want to ignore it seem to be in the definite minority now. People think they have the outcome they want and now just want to forget, but I can't help feeling that there is more to come, albeit probably not for a couple of years when everything has settled and 1D&D and wotc's VTT come out. When people like Kyle Brinks say words like "there aren't any plans to do xyz", it is perfect politician speak and I personally take that as an admission that there may not be now, but there sure will be later. But yeah, I'm cynical.

So. I still have not read the other post, but I chose to answer this one.

I have a big problem with you telling otgers what "the truth" is. And that others conveniently ignore that.
I actually consider that dismissive.

People can look at the same facts and draw different conclusions. Until we get a statement from someone inside, tgat destroying 3pp was the goal, I don't think that is what happened.

I think, it really started to be a shield vs BIG 3pp and Disney etc. Building a competitor product. Disney could decide to buy a big 3pp producer and build a competing product. It would not be the first time that happened.
Then I think, they thinking, when we are at it, we can prevent NuTSR stuff at the same time. And then it went downhill.

I don't see any scenario, where destroying the whole 3pp market would have been a good business decision.

So that is my take. I don't want to be called out as someone ignoring "the truth" for convenience.

Edit: as noted below, the post was mainly adressed at JusticeAndRule

 

[BlueFin]

So. I still have not read the other post, but I chose to answer this one.

I have a big problem with you telling otgers what "the truth" is. And that others conveniently ignore that.
I actually consider that dismissive.

People ca look at the same facts and draw different conclusions. Until we get a statement from someone inside, tgat destroying 3pp was the goal, I don't think that is what happened.

I think, it really started to be a shield vs BIG 3pp and Disney etc. Building a competitor product. Disney could decide to buy a big 3pp producer and build a competing product. It would not be the first time that happened.
Then I think, they thinking, when we are at it, we can prevent NuTSR stuff at the same time. And then it went downhill.

I don't see any scenario, where destroying the whole 3pp market would have been a good business decision.

So that is my take. I don't want to be called out as someone ignoring "the truth" for convenience.

That's all cool, and I essentially agree with you, but a few points ...

You're quoting a post of mine that was a direct response to something said by @Justice and Rule. They said "It really feels like a lot of people want to avoid the whole "intent" question ...". By extension I was agreeing with "it really feels" and that I have the same "feeling" of things as they do. So if you put "I agree that it really feels ..." at the beginning of my sentence, then I think that adjusts the tone - but I didn't put it there because it was already there in the post I was responding to, and I think my post should be read in that context.

Most importantly, I'm not telling anyone what "the truth" is. I am remarking on the fact that a lot of people appear to be willing to let things go and they are expressing it in a way that, to me, comes across as being "inconvenient" to pursue it any longer, because to do so would get in the way of what they want - and that's totally fine. Anyone is entitled to do that. I do it myself at times. But, I have not made an accusation at any particular person, and I think that is important to remember. I am commenting on the general impression I am getting.

But that will (hopefully) be clearer if (and I have no expectation) you do read my longer post. You will see I have absolutely acknowledged the idea of the "inconvenient truth" (although I described it differently) as valid. As said, I do it at times myself. In that longer post I have been pretty clear to say "my opinion", "to me" etc, and have acknowledged that other people have different perspectives, and I respect those. What I do also go on to describe is why this particular topic is something that concerns me a lot and why I think wotc is a risk to the hobby. Agree, don't agree, that's up to the reader. I have not told anyone they have to agree, or what "the truth" is.

 

[Teemu]

I'm not convinced that WotC wanted to shut down 3PP publishers (and/or Paizo and others) in order to take over the tabletop RPG market. They already took over it a few years ago. 5e is a behemoth. To me it looks like the suits at Hasbro/WotC are more concerned about video games and movies and TV shows. The Legend of Vox Machina could've been a revenue stream for Hasbro if the licensing around D&D was different. Right now it's a big hit on Amazon Prime, originally based on or using Hasbro's IP but in a roundabout way, yet a massive lost opportunity for the brand. It's possible that other similar business opportunities arise from the fairly lax legal situation around D&D.

 

[Ulorian - Agent of Chaos]

Most importantly, I'm not telling anyone what "the truth" is. I am remarking on the fact that a lot of people appear to be willing to let things go and they are expressing it in a way that, to me, comes across as being "inconvenient" to pursue it any longer, because to do so would get in the way of what they want - and that's totally fine.

What do you mean by this? Get in the way of what they want?

 

[Cergorach]

Greed:
intense and selfish desire for something, especially wealth, power, or food.

Can a company be selfish? Can a company be intense? Can a company desire? Maybe the people that work for, control and/or own the company, but not the company itself.

I would say that how companies work are the direct consequence of the capitalistic and democratic system as currently implemented (in all it's different forms) all over the west... You want to eliminate (corporate) greed, then you need to change society and imho that is not done on a RPG forum.

In my experience deciding to go for more profit does not have to be greed (as defined as an intense and selfish desire for wealth). That is just a different road taken without any intense desire. Selfish, maybe. But aren't we all selfish? I see you posting here instead of fixing the worlds wrongs. I would call that selfish. And I'm selfish as well on many levels and not so much at other levels. I personally think that is part of the human condition: survival. If I was completely selfless I would be building infrastructure in the poorest parts of the world and would probably already be dead...

Now, how have we gotten here? Hasbro is a publicly traded company, so it's owners suffer from a herd mentality (many unanimous members that are all moving blindly in the same direction), that's having issues right there! Hasbro bought WotC, but someone must have sold WotC to Hasbro in the first place. WotC bought TSR, someone must have sold TSR. And ownership of TSR was sold a couple of times internally. Some of these people were greedy, but how selfish do you have to be to sell something to a greedy person? Along the way there have been many 'good' people that did incredible work to get D&D to where it is now. Even the 'bad' people did some 'good' and some of the 'good' people became 'bad'...

The OGL thing was simple: I found the changes problematic and I let WotC/Hasbro know the only way I knew how. I purged every WotC/Hasbro (licensed) item from my wishlist and even let their partners know why I wouldn't be buying their products in the future. Maybe they should have a chat with their partner WotC/Hasbro. When WotC rethought their direction and even threw in the Creative Commons thingy, I had what I wanted, so no longer any reason why I would continue my only way of protest. The alternatives presented by different companies to what WotC was doing was appreciated, but I also saw the opportunistic side of those announcements. In the same way I saw that even if WotC/Hasbro wouldn't correct their direction, many people/companies would eventually relent and go back to WotC/Hasbro... Why? Because I've seen the same happen for the last three decades with similar types of fans and companies! Games Workshop is a perfect example of this (but certainly not the only one).

 

[LuisCarlos17f]

It was their fault and their mistake. They believed they could milk us easily because our loyalty and devotion was totally unconditional. OK, D&D is the superstar of the show, but that doesn't mean you can be... rude and unpolite. We have also to pay taxes and bills, and we suffers toxic people, trickers and cheaters in our jobs and we don't want to feel scammed in our hobby paying more necessary.

Their failure was not only they were too greedy, but they didn't understand the psychology of the roleplayers. Not only we have got a lot of imagination, but we learn our lessons after suffer the tricks and machinations by mercyless DMs.

They can say whatever they want, that doesn't mean we have to blindly believe them.

D&D is maybe now the key of the survival of the company. If they don't recover after the economic crisis, they will be praying for a good deal in a future acquisition. Do you want D&D owned by Disney, Amazon or Microsoft?

 

[Cergorach]

It was their fault and their fault. They believed they could milk us easily because our loyalty and devotion was totally unconditional.

And they were right, they can easily milk 'us'. And with 'us' I mean the consumer group that buys D&D products and services. Maybe not you and me specifically, but probably 95%+ of that customer base wouldn't be impacted, just a very loud minority. And yesterday people left D&D for reasons unconnected to OGLgate, as will people leave today, tomorrow, next week, next year, etc. On the other side, new people will join the D&D customer group. They just buy what they can afford and enjoy, they do not care about meta concerns around D&D or their owners.

Some people here and elsewhere seem to forget that a relatively small amount of D&D consumers even get exposed to OGL licensed material. They just buy D&D stuff to play with. Even of those that are exposed to OGL material, 80% of those haven't bought anything OGL, they are just playing in/with something their DM pulled from an OGL product. They couldn't care less about the OGL itself. If that DM is influenced by OGLgate, that doesn't mean that the group will stop playing D&D. If it's a friends group, that DM will keep playing D&D with it's friends, if not the rest of the group will find someone else to DM/play with... This is generally the hard reality of the situation. Are there exceptions, of course, but they are rare!

D&D is maybe now the key of the survival of the company. If they don't recover after the economic crisis, they will be praying for a good deal in a future acquisition. Do you want D&D owned by Disney, Amazon or Microsoft?

D&D is less then 20% of WotCs revenue, Magic is 80%+. Just look at the financial report. If you do some math, revenue from the rest of WotC (outside Magic) was actually declining in 2022 before OGLgate became even relevant for revenue numbers. D&D currently isn't a keystone for WotC OR Hasbro, nor would it become one anytime soon...

At this point I would say that WotC being acquired by Disney or Amazon wouldn't change anything. I see them as similarly 'bad' as Hasbro, just a whole lot smaller then Disney or Amazon. WotC being bought by MS I would actually see as an improvement! MS is not a 'good' company, but looking at how they've let their game studios operate, availability of console titles on PC. I think that their influence/relationship with their game studios is a LOT better then Hasbro's has been. I also think that the acquisition of Activision/Blizzard by MS is a good move, I can see them rehabilitating the mess that is Activision/Blizzard. I could also see them rehabilitating WotC (management) and they have the expertise to setup gamestudios for WotC properties (Magic/D&D)...

 

[Ulorian - Agent of Chaos]

It was their fault and their fault. They believed they could milk us easily because our loyalty and devotion was totally unconditional.

Step 1: don't make it personal. No one personally attacked you, despite what you are feeling right now. You are misinterpreting, so redirect that thought.

OK, D&D is the superstar of the show, but that doesn't mean you can be... rude and unpolite. We have also to pay taxes and bills, and we suffers toxic people, trickers and cheaters in our jobs and we don't want to feel scammed in our hobby paying more necessary.

A corporation is going to do what it needs to survive. Giving it the task of managing your hurts will not compute in that organism. It's not right or wrong; it just has nothing to do with you. Your best step forward IMO is to acknowledge that and move on.

Their failure was not only they were too greedy, but they didn't understand the pschology of the roleplayers. Not only we have got a lot of imagination, but we learn our lessons after suffer the tricks and machinations by mercyless DMs.

I understand what you're saying. But roleplayers, as you call them, are a fringe of society. Hasbro cares about appealing to the masses. The masses don't have the 'psychology of the roleplayers'.

They can say whatever they want, that doesn't mean we have to blindly believe them.

The key, I think, is to properly understand your motivations and their motivations, then move forward. Going off your personal gut instincts, with only rage/pain/zero understanding of the other side's motivation as your guide... not a good plan IMO.

 

[Krachek]

Magic like card game will always be a niche game. even at 1 billion revenue.
DnD is also in the same niche, a game with 3 books and over 600 pages as core rules will stay in a narrow niche forever.

Wotc may dream of more billions revenue and more millions customers, but the last crisis bring them back to reality.

improved VTT is another business, DnD simplified to appeal the mass is also another business to create.