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Hasbro's CEO Reports OGL-Related D&D Beyond Cancellations Had Minimal Impact
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<blockquote data-quote="Cergorach" data-source="post: 8940471" data-attributes="member: 725"><p>I'm seeing a lot of assumptions being made, and I also got the impression that my recollection about events might be influenced by my feelings, so I checked:</p><p></p><p>21st of December:</p><p>[URL unfurl="true"]https://www.enworld.org/threads/wotc-announces-ogl-1-1-revised-terms-royalties-and-annual-revenue-reporting.693973/[/URL]</p><p></p><p>That's four days before Christmas, I don't know about you, but most of the holiday shopping/expenditure has already been done by that time. With the exception of foodstuffs, drinks and the like. That announcement was still light on the details and was lacking the actual new OGL text that was later leaked.</p><p></p><p>Q3 2022 ended before October 18th 2022 (see sources), as that was the date that Q3 2022 results were publicized. So that would mean that Q4 2022 ended before January 18th 2023. I do not have 100% proof, but I can say with a large degree of certainty that Q4 2022 didn't include any part of January 2023.</p><p></p><p>The DND Beyond cancellations only hit the 'peak' half way through January: <a href="https://www.gamingbible.com/news/dd-beyond-website-crashes-due-to-cancellations-430802-20230116" target="_blank">D&D Beyond hit with so many subscription cancellations that the website crashed</a></p><p></p><p>The financial impact of those cancellations will only 'hit' when your current subscription runs out. Depending on when you started your subscription and for how long it runs, it might not even 'hit' this year. Even if we're talking about 50,000 cancellations that is $100k-$200k/month or $1.2M-$2.4M/year. And that is only IF those cancellations do not get replaced by new subscribers (or are only temporary)...</p><p></p><p>As for 'lying' to customers/investors, messing with the revenue numbers is very difficult, but there are companies that have done so before and companies at this scale in the US in this era of automation, that is very rare. Is it possible? Sure, but so is winning the lottery. Someone does win the lottery of course, but the chances of you winning the lottery... The chances that Hasbro/WotC are messing with the revenue numbers is very small imho. Not realistic to mention...</p><p></p><p>Hasbro is generating significantly less revenue (and profit) in 2022 then in 2021. Which honestly doesn't surprise me at all. What does surprise me is that Magic is generating (significantly) more revenue then compared with the year before. And that WotC is also generating more revenue, but a little less profit.</p><p></p><p>Profit and loss are something that creative bookkeeping can influence, generally nothing illegal is going on (but can be), it's just very difficult to understand for people that have no experience with accounting at this scale and they conclude that they are being lied to because they don't understand it. If there was something iffy going on, then this would be where that iffyness would happen. Again, it could happen, but chances that it's happening are slim.</p><p></p><p>Especially when you do some math, look at the revenue Magic is generating. Even with the controversy the last year with Magic, they are still seeing a huge amount of revenue. ~80% of WotC's revenue. If Magic saw a 7% increase and WotC only saw an increase of 3% for that same period, that means everything besides Magic was doing way worse at WotC then in 2021, around 11% worse then 2021. But looking at the timing of the OGL debacle, that has close to 0 impact on those numbers. And this is where the spin is, do we see anything about that 11% worse revenue at WotC when not looking at Magic? No.</p><p></p><p>When looking at a potential revenue loss of $2.4M/year from DND Beyond subscriptions. WotC had a revenue of $1.3B in 2022, that DNDB has only less then a 0,2% impact in revenue. That is virtually nothing! Even if we disregard Magic, that is still less then 1% of the rest of the WotC revenue.</p><p></p><p>As someone else mentioned, people have this tendency to get overly invested in their choices and want their choices to matter in the grand scheme of things and won't or can't accept that their choices just don't really matter to the world at large. Your choices are something that you have to live with, not the rest of us.</p><p></p><p>I also suspect that many people have already reversed their choices regarding D&D after the WotC backpedaling or this will just blow over and people will forget and keep consuming WotC/Hasbro products/services... And honestly, D&D is pretty small next to Magic. If there are any big shakeups in 2023 at WotC, I suspect that it will be in the Magic side of the business.</p><p></p><p>Sources:</p><p>[URL unfurl="true"]https://hasbro.gcs-web.com/press-releases/quarterly-financials[/URL]</p><p>[URL unfurl="true"]https://hasbro.gcs-web.com/news-releases/news-release-details/hasbro-reports-fourth-quarter-and-full-year-2022-financial[/URL]</p></blockquote><p></p>
[QUOTE="Cergorach, post: 8940471, member: 725"] I'm seeing a lot of assumptions being made, and I also got the impression that my recollection about events might be influenced by my feelings, so I checked: 21st of December: [URL unfurl="true"]https://www.enworld.org/threads/wotc-announces-ogl-1-1-revised-terms-royalties-and-annual-revenue-reporting.693973/[/URL] That's four days before Christmas, I don't know about you, but most of the holiday shopping/expenditure has already been done by that time. With the exception of foodstuffs, drinks and the like. That announcement was still light on the details and was lacking the actual new OGL text that was later leaked. Q3 2022 ended before October 18th 2022 (see sources), as that was the date that Q3 2022 results were publicized. So that would mean that Q4 2022 ended before January 18th 2023. I do not have 100% proof, but I can say with a large degree of certainty that Q4 2022 didn't include any part of January 2023. The DND Beyond cancellations only hit the 'peak' half way through January: [URL="https://www.gamingbible.com/news/dd-beyond-website-crashes-due-to-cancellations-430802-20230116"]D&D Beyond hit with so many subscription cancellations that the website crashed[/URL] The financial impact of those cancellations will only 'hit' when your current subscription runs out. Depending on when you started your subscription and for how long it runs, it might not even 'hit' this year. Even if we're talking about 50,000 cancellations that is $100k-$200k/month or $1.2M-$2.4M/year. And that is only IF those cancellations do not get replaced by new subscribers (or are only temporary)... As for 'lying' to customers/investors, messing with the revenue numbers is very difficult, but there are companies that have done so before and companies at this scale in the US in this era of automation, that is very rare. Is it possible? Sure, but so is winning the lottery. Someone does win the lottery of course, but the chances of you winning the lottery... The chances that Hasbro/WotC are messing with the revenue numbers is very small imho. Not realistic to mention... Hasbro is generating significantly less revenue (and profit) in 2022 then in 2021. Which honestly doesn't surprise me at all. What does surprise me is that Magic is generating (significantly) more revenue then compared with the year before. And that WotC is also generating more revenue, but a little less profit. Profit and loss are something that creative bookkeeping can influence, generally nothing illegal is going on (but can be), it's just very difficult to understand for people that have no experience with accounting at this scale and they conclude that they are being lied to because they don't understand it. If there was something iffy going on, then this would be where that iffyness would happen. Again, it could happen, but chances that it's happening are slim. Especially when you do some math, look at the revenue Magic is generating. Even with the controversy the last year with Magic, they are still seeing a huge amount of revenue. ~80% of WotC's revenue. If Magic saw a 7% increase and WotC only saw an increase of 3% for that same period, that means everything besides Magic was doing way worse at WotC then in 2021, around 11% worse then 2021. But looking at the timing of the OGL debacle, that has close to 0 impact on those numbers. And this is where the spin is, do we see anything about that 11% worse revenue at WotC when not looking at Magic? No. When looking at a potential revenue loss of $2.4M/year from DND Beyond subscriptions. WotC had a revenue of $1.3B in 2022, that DNDB has only less then a 0,2% impact in revenue. That is virtually nothing! Even if we disregard Magic, that is still less then 1% of the rest of the WotC revenue. As someone else mentioned, people have this tendency to get overly invested in their choices and want their choices to matter in the grand scheme of things and won't or can't accept that their choices just don't really matter to the world at large. Your choices are something that you have to live with, not the rest of us. I also suspect that many people have already reversed their choices regarding D&D after the WotC backpedaling or this will just blow over and people will forget and keep consuming WotC/Hasbro products/services... And honestly, D&D is pretty small next to Magic. If there are any big shakeups in 2023 at WotC, I suspect that it will be in the Magic side of the business. Sources: [URL unfurl="true"]https://hasbro.gcs-web.com/press-releases/quarterly-financials[/URL] [URL unfurl="true"]https://hasbro.gcs-web.com/news-releases/news-release-details/hasbro-reports-fourth-quarter-and-full-year-2022-financial[/URL] [/QUOTE]
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