How Wizards of the Coast Could Slay in Profit

[Matt James]

Yep. You only get profit after factoring in cost, and the cost of getting the old editions running again would pop the profit like a minion in a lava pit. WotC can't even manage to keep the pagecounts up on one edition's worth of books.

My article wasn't speaking to reprints of physical books.

 

[Incenjucar]

My article wasn't speaking to reprints of physical books.

Nor did I claim it was.

WotC's dollar-per-content ratio has been getting steadily worse as the years go on. Expecting them to quintuple that output is unrealistic at best.

 

[Umbran]

I'm just talking about article support.

I don't think they're going to get much subscription revenue for a few articles now and then.

 

[delericho]

Why would they need to move on...? WotC can support Pathfinder on DDI also.

Indeed. WotC, or anyone else who wanted to, could provide electonic tools for Pathfinder. And there are already fan materials and third party products out there; DDI would just be another example.

That said, WotC might be leery of supporting a competitors products. Indeed, the DDI team might be all in favour of it, only to have the plans killed at the last minute by some marketing/legal guy.

I think there'd be a lot of Pathfinder Players and GM's that would be interested in a 4E'esque Character Builder, Monster/NPC Builder, and Encounter Builder with rules support for the Virtual Table Top.

If WotC were to provide this, I would almost certainly subscribe. (If they did it for 3e, I definitely would.)

But that represents a massive undertaking - almost as big as developing those same tools for 4e. And I can't see it doubling their subscriber numbers.

 

[kitsune9]

Firstly, there's an issue that although there are lots of old-edition fans out there (as well as Pathfinder fans, of course), in a great many cases they simply have no interest in what WotC are doing. After all, if you never moved on from 1st Edition, there's no reason you'd necessarily even know about DDI, never mind care enough to spend money every month on a subscription. Likewise, where the Pathfinder fans have moved on, there's a real good chance they simply won't look at whatever WotC offer.

I agree. If 80% of your market moved on, 10% dropped out, and 10% of your market stayed in x edition, that's only 10%. Back in 1e and 2e's days, they had millions of active players because that's what there was to play. Now I doubt that there's even 1% of that who is adamantly strictly 1e (not a retro-clone). With each new edition, there is the issue of adopting, non-adopting, or dropping out (finding a new game or leaving the hobby altogether).

Then there's the issue of cost. If WotC want to offer ongoing support for old editions, then an article here and there in the magazines just isn't going to cut it. They would need to offer regular and frequent updates. Essentially, they would have to produce at least 3 (soon to be 4) magazines each month - one each for pre-3e, 3e, and 4e at the minimum. There could be significant overlap, to be sure, but even so that would be a lot of material to convert. Given that the 4e board sees regular complaints that the e-magazines (esp eDungeon) are pretty sparce, I suspect tripling the workload is a non-starter. (And, worse, they would have to start supporting the old editions, and publicise that they're doing so, before they could expect to see any real bump in subscription numbers.)

Excellent point! Working up a production budget for a limited market is a sure fire way toward losses. A lot of people don't understand the costs of production--direct costs (salaries, benefits, vacation accrual, vendor agreements such as hiring artists and freelance writers, printing, supplies, shipping, distribution fees, etc.) and indirect costs (utilities, janitorial, IT support, business licensing renewal, rent, maintenance, etc.).

The comment about the publication and advertising just to generate interest is going to involve start up costs.

Finally, and bluntly, there's an issue of quality. Simply put, the OSR guys may well be better able to support the old editions than WotC (who haven't ever actually done so). Likewise, Paizo are certainly better able to support Pathfinder than WotC, and probably better able to support 3e (even if we have to convert the material ourselves). WotC have moved on, and the people who used to do that work are mostly now gone, so they'd have to either recruit or retrain people for the job... the OSR and Paizo have no such issues.

Another well-said point. You described what is commonly called in business "core competency" and "strategic advantage". WotC's core competency is working and designing support for the current edition and providing licensing and add-on products for the brand. Their strategic advantage is the strength of the brand itself and how they position themselves in the market. Since they abandoned the previous editions, that's no longer their core competency and now OSR's core competency is everything related to old editions and Paizo's is Pathfinder.

Now, all that said, it is entirely possible that I'm wrong. Maybe there is a big demand out there, maybe large numbers of people are eagerly dreaming of 'official' support of their edition of choice. My gut says, no... but I have been known to be wrong.

If I were WotC, and I were considering something like this as a direction going forward, here is what I would do: Produce a single, new adventure module for 1st Edition.

The other thing that they probably should do is get those old edition PDFs up on DDI in some form. That would seem to be a pretty cheap thing to do (although some will need rescanned, and they'll need to do something about DRM/format/whatever), and it would probably bring in a bunch of new subscribers.

(Oh, and incidentally - everything I said about old-edition fans not watching what WotC are doing applies equally to 5e. If they're banking on 5e pulling back huge numbers of 1st Ed fans, I fear they're going to be disappointed - if neither of WotC's previous editions provoked you to upgrade, why would you even look at their new attempt?

Spoken like someone who attended MBA classes. Excellent post.

 

[GregoryOatmeal]

So let's assume the ultimate goal of WOTC is to sell subscriptions to DDI. I'm guessing the service has much higher profit-margins than print books and more likelihood of returning customers. WOTC should make every reasonable and affordable attempt to use DDI to appeal to as many customers as possible. This could include:

1) Republishing old books from past editions
2) Providing a basic character builder for editions past (without support from all of the splatbooks). I just started programming and it really seems that, since a 4E builder already exists, one would simply remove a lot of the powers and change variables. It wouldn't be too hard to get something running.
3) Providing edition-neutral tools such as VTT.
4) Possibly, if this is successful, contracting writers from fan-sites to write articles and content about past editions.

You described what is commonly called in business "core competency" and "strategic advantage". WotC's core competency is working and designing support for the current edition and providing licensing and add-on products for the brand. Their strategic advantage is the strength of the brand itself and how they position themselves in the market. Since they abandoned the previous editions, that's no longer their core competency and now OSR's core competency is everything related to old editions and Paizo's is Pathfinder.

But their core competency used to be producing content for those old editions, and they still own that content. They still have a strategic advantage over the competition (maybe not Paizo since they make quality products) because they produced the content that inspired the clones. Their quality control then was greater than the current OSR content since it was professional and the OSR is driven by hobbyists. And people will want the original - not the clones.

But if customers do use OSR products or PF I think they could still find a lot of value in older content on DDI. Retroclones are designed specifically to be compatible with older content. So someone could have a PF/OSR PHB and play exclusively with old monster manuals and adventures from DDI while feeding money to WOTC.

So in a nutshell if WOTC allowed access to the entire catalog of 3E materials with DDI they could offer more value to Pathfinder customers via subscription than Paizo ever could.

 

[Crazy Jerome]

The only way they could possibly make it worth their time and effort to support digital tools (and possibly any digital content whatsoever) for older versions is to do it as pure service--of material created and managed by fans. For example, offer to host a BECMI/RC character/NPC/monster utility (or three) if someone will write it. Treat it like "mods" for a computer game.

People writing the stuff are mainly getting social approval, but if someone wants to donate to help them out, no problem. Meanwhile, they don't need to deal with advertising or hosting or anything like that. And since he is hosting on the official site, he isn't worried about crossing lines that should not be crossed, and then getting slapped with a "cease and desist". If he does cross lines, WotC simply won't host his thing until he fixes it.

Meanwhile, WotC isn't selling you the product. You can go get that from the guy who wrote it, if you want. They are selling a convenient place to go get it, along with a lot of other like things, virus-checked, reviewed, rated, etc. That mightly actually be worth a modest subscription.

Keeping it all in house is not selling services, but products. Products sold as services have usually not done well. If WotC wants to sell digital products, they should go all in, make good products for their majority users, and sell those as things you can download and install, not browse. If they want to go all service model, they should do that.

 

[kitsune9]

But their core competency used to be producing content for those old editions, and they still own that content. They still have a strategic advantage over the competition (maybe not Paizo since they make quality products) because they produced the content that inspired the clones. Their quality control then was greater than the current OSR content since it was professional and the OSR is driven by hobbyists. And people will want the original - not the clones.

You have to be careful about that. Even though they own the brand, it's no longer their core competency, because they no longer support that particular product line (i.e. old editions). They would need to "tool up" in order to get back into making games to support the old editions. I'm not saying that's difficult though, just that it will take time and money. They've definitely lost strategic advantage because they left the field. In order for a business to have a strategic advantage in the market with their old products, they still need to be competing. Now if they did, they could regain it, that's always a possibility. I wouldn't contest that. I'm sure if they put out a new splat book for 1e and began to compete in earnest with the OSR or Paizo (if they want to do something 3.0ish), it would generate buzz to say the least. However, there's a few factors against them though--1) the OSR picked up the pieces and came out with retro clones. Paizo did it with PF. Players who have them are satisfied and it's become their game of choice. 2) Players who have stuck to the true editions, but had no interest in buying supplements, splat books, etc. even during the time when those editions are active. They bought their PH, DMG, and MM and that's it. 3) Players who just quit the hobby or picked up a new game altogether when the next edition came out.

You do make one excellent point though that if they did come out with original material for the old stuff, people are like to want the original. That's brand strength which I think WotC has it in spades.

 

[Rogue Agent]

Then there's the issue of cost. If WotC want to offer ongoing support for old editions, then an article here and there in the magazines just isn't going to cut it. They would need to offer regular and frequent updates. Essentially, they would have to produce at least 3 (soon to be 4) magazines each month - one each for pre-3e, 3e, and 4e at the minimum.

This.

Not to mention all the people who would see DDI support for a game system they're not playing and say, "Why is WotC wasting money on that? It's of no use to me!" (This is a perpetual problem that faces every gaming magazine that has ever existed: You can actually increase the page count to add a new feature and people will complain about the new feature because they're somehow "getting less" now.) WotC could do this, quadruple their development costs (in order to support all editions equally), and still end up losing subscribers as a result.

Also: There's no strong indication that DDI subscriptions are being driven by magazine content. And the costs of offering DDI software support to previous editions would be considerable.

Also: I have yet to see any indication that the pre-3E crowd is actually significant in comparison to the 3E/4E crowd. Pure numbers aside, the pre-3E crowd seems to be heavily filled with people who say things like "supplements are for suckers". These people aren't customers and they never will be.

 

[Kzach]

On the matter of what 'support' entails, and the level of investment from WotC's perspective, when I first read the OP (I haven't read the linked article), my immediate reaction was that through DDI you'd have access to all previous edition's CORE rules (ie. not splatbooks, just PHB, DMG and MM's) through the Compendium and support for Character Building and Monster Building.

Now, whilst the initial task might be significant, that output would never again need to be updated. Anyone wishing access to it would pay for a DDI subscription for that specifically and that alone, choosing not to take advantage of whatever other edition material is available and not engaging in the current edition's updated content.

Sure, they would be paying for content they don't want or need, but that's their choice. What they'd be paying for would be the same convenience and power that 99% of subscribers to DDI pay for, that being the Compendium (number one by far), the Character Builder and Monster Builder. Those three alone are well worth the price, no matter what edition you use.

What's more is that it exposes these people to all the NEW content as well. This would seriously help to break down barriers and walls of edition-haters as they would constantly be seeing what's on offer through Dungeon and Dragon articles. What's more, WotC could make an effort to make edition neutral articles in order to entice people to read those articles and thus be more exposed to new edition concepts.

Apple has become one of the largest companies on the planet, in part due to what's known as the 'halo' effect. People buy an iPod and think, "Ooh, I like this... I wonder if an iMac is as cool..."