D&D General Is DnD being mothballed?

[Alzrius]

But we didn't actually see that, did we?

First, and most obviously, 3.5e didn't keep selling. They went to 4e.

We didn't see that, no...with WotC. We saw it with Paizo, which sold 3.5-compatible materials for two years before switching to PF1 (which was 3.5 with a facelift).

Second, Paizo's sales are dwarfed by WoTC's. We can agree on that, right? That's not a value statement, but a statement of fact. And that's okay, because Paizo is perfectly happy selling to a much smaller group of consumers; their model works for that group. I don't think that the model would work for more causal fans ... which is the larger market that WoTC is selling to. Again, WoTC sells tons of books to kids (15% of players are between the ages of 10 and 15) and to casual gamers, while PF remains a lucrative, but more niche product.

I'm nervous when we start talking about actual sales numbers; while it's probably accurate to say that WotC sells more (now) than Paizo does, this tends to lead to questions of "how much (is relevant)?" Which leads to questions of "didn't PF1 outsell 4E at some point?" at which point we're back into an edition war. Again.

That's leaving aside the salient point (which I was making before) that WotC needs to sell larger amounts of product, not because they're trying to keep the lights on, but because their corporate overlords demand larger annual returns (i.e. the ROI thing). "Sustainable" and "profitable" are different issues in that regard, because when the metric shifts from $100M being the target goal in 2007 to being "undermonetized" in 2023, then that's going to impact how many sales is considered "sustainable."

Again, I am not saying that this is necessarily the sweet spot. But given that we've seen over nine years of uninterrupted growth - something unheard of in the history of D&D ... I think we can at least acknowledge that the "slow & steady" approach has some merit.

No one is arguing otherwise. This isn't about whether or not WotC's current strategy was working, but the idea that their previous strategy had to fail. It didn't, and ideas that it did are a zombie idea: it just keeps shuffling along despite having been killed already.

People saying, "But they could sell more," aren't adding much in terms of factual content. Yes, things could always be different, but this release schedule has, so far, worked in terms of long-term viability.

Again, that's a separate issue (much like the ethical conduct thing that was introduced as a tangent).

 

[Snarf Zagyg]

That's leaving aside the salient point (which I was making before) that WotC needs to sell larger amounts of product, not because they're trying to keep the lights on, but because their corporate overlords demand larger annual returns (i.e. the ROI thing). "Sustainable" and "profitable" are different issues in that regard, because when the metric shifts from $100M being the target goal in 2007 to being "undermonetized" in 2023, then that's going to impact how many sales is considered "sustainable."

Now I am truly confused by whatever it is you are saying.

When we are talking about ROI (return on investment) ... that's a very specific concept.

In other words, imagine the following:
A. Produce 5 books at a cost of $1 each and sell for $10. ROI=-
B. Produce 10 books at a cost of $2 each and sell for $10.
C. Produce 20 books at a cost of $3 each and sell for $10.

For A, you have a cost of $5, revenue of $50, and profit of $45. ROI= 900%
For B, you have a cost of $20, revenue of $100, and profit of $80. ROI= 400%
For C, you have a cost of $60, revenue of $200, and profit of $140. ROI= 233%

Now, imagine that the company has another project that has an anticipated ROI of 300%. In that scenario, they would want to produce 10 books. On the other hand, if their only alternative is to stash the cash into cash equivalents, then they would proceed with 20 books.

This is why I am completely confused! Generally, scale matters when it comes to ROI. My example seems weird because, normally, it is relatively easy to increase output of a product with a lower cost (not always, but usually). A lot of your fixed costs ("keeping the lights on," "labor") stay the same, and you can usually get slightly better rates for doing things in bulk.

So, arguably by looking purely at ROI at a single point in time (and certainly looking at revenue) WoTC should be making more books. But the reason they aren't doing that is because they adopted a strategy ... one initially born out of desperation, mind you, but continued ... to protect the long-term viability of the brand in terms of the books.

And, to be honest, the monetization of D&D for increased revenue is largely occurring in areas that aren't book-related. Computer software, licensing for TV and movies, DDB, toys, etc.

Again, I express no opinion on this, but I am seriously confused by your use of ROI as you have been using it.

 

[Alzrius]

Now I am truly confused by whatever it is you are saying.

When we are talking about ROI (return on investment) ... that's a very specific concept.

In other words, imagine the following:
A. Produce 5 books at a cost of $1 each and sell for $10. ROI=-
B. Produce 10 books at a cost of $2 each and sell for $10.
C. Produce 20 books at a cost of $3 each and sell for $10.

For A, you have a cost of $5, revenue of $50, and profit of $45. ROI= 900%
For B, you have a cost of $20, revenue of $100, and profit of $80. ROI= 400%
For C, you have a cost of $60, revenue of $200, and profit of $140. ROI= 233%

Now, imagine that the company has another project that has an anticipated ROI of 300%. In that scenario, they would want to produce 10 books. On the other hand, if their only alternative is to stash the cash into cash equivalents, then they would proceed with 20 books.

This is why I am completely confused! Generally, scale matters when it comes to ROI. My example seems weird because, normally, it is relatively easy to increase output of a product with a lower cost (not always, but usually). A lot of your fixed costs ("keeping the lights on," "labor") stay the same, and you can usually get slightly better rates for doing things in bulk.

So, arguably by looking purely at ROI at a single point in time (and certainly looking at revenue) WoTC should be making more books. But the reason they aren't doing that is because they adopted a strategy ... one initially born out of desperation, mind you, but continued ... to protect the long-term viability of the brand in terms of the books.

And, to be honest, the monetization of D&D for increased revenue is largely occurring in areas that aren't book-related. Computer software, licensing for TV and movies, DDB, toys, etc.

Again, I express no opinion on this, but I am seriously confused by your use of ROI as you have been using it.

I noted before that I'm not a business executive, so if I'm using that particular term wrong, mea culpa. As I remember it, the term was used in a seminar I attended by an ex-TSR/WotC employee who used it as I have here, to refer to the idea that a company wasn't looking at whether or not they made more money than they spent as a determinant with whether or not to continue producing a particular product line, but as to whether or not it was hitting their projections for how much money they expected it to make (or rather, needed it to make in order for them to feel it was worthwhile to continue putting money into).

For 3.5, my understanding (as per the seminar with Ben Riggs about why WotC changed editions to 4E) was that 3.5 wasn't hitting the ROI that WotC/Hasbro had set for it (which they blamed on World of Warcraft), and that was why the decided to make a new edition. Which is to say, it's not that 3.5 was losing them money, but because it wasn't making them enough money (and as per old quotes from Ryan Dancey, we know that the target number was $100M per year).

Given that, as per the link I posted before, a statement was made that the pace and content of 3.5's releases were losing WotC money, and that's what caused WotC to move away from 3.5 (and 4E). That, however, isn't the case; they weren't losing money, they just weren't making enough for those editions to be something they wanted to invest in. That's important to keep in mind, because I see parallels drawn between the 3.5/4E era of WotC and TSR, when in fact the circumstances of the two companies (both of which had voluminous output at times) were very different.

 

[Micah Sweet]

Setting an ROI target is something all companies do. They evaluate the amount of investment in production that will net the greatest profits. I don't understand why you heavily imply that it's a bad thing. Some companies do engage in bad behavior hence the examples I gave that I consider bad behavior that would make me reconsider a purchase. Setting an ROI target is not something I would ever consider bad behavior.

And because WotC changed their mind on the OGL issue because their profits were suddenly threatened, it doesn't matter that they had every intention to pull the trigger on it until then? As long as you don't take that last step (no matter what the reason) everything up until then is ok?

 

[Parmandur]

Well, I don't know how much is "a lot," but there seem to be plenty of other people who feel differently, and I can't say bring myself to say that they're unreasonable in doing so. Again, there are certainly much larger gaps between any TTRPG company out there as compared to the very best/worst of all companies, but that doesn't make a comparison between TTRPG companies not worthwhile.

A serious comparison isn't something I see much of, more people trying to reply their feelings and preferences. And we are talking about games here, so making purchases on preferences is more than fine, that's the point. But feelings are not ethical analysis.

I'll point out that I never said that making money and excellence were incompatible goals; indeed, that's what people value in companies that adopt a "excellence leads to profit" standpoint. The issue is that people tend to look skeptically at companies that put profits above excellence, as that often comes at the expense of their customers, and it's not like we don't have any examples of that in the TTRPG space.

If company A says that they're deliberately holding back on monsters that people want, in order to get them to buy subsequent books, and company B puts all of their monsters online, both are still seeking profits. But company A is doing so in a manner that doesn't work in their customers' best interests (i.e. they could have given them what they want upfront, but deliberately didn't do so), whereas company B is working in their customers' best interests (i.e. giving them what they want, and trusting that the quality of their work will encourage future purchases).

Now, that's nowhere near the level of something involving Big Tobacco, but it's still an ethical stance that people can perceive and react to.

Paizo isn't posting stuff for free outbof generosity: that's a strategy to make money, same as ORC or the OGL.

 

[Parmandur]

Given that, as per the link I posted before, a statement was made that the pace and content of 3.5's releases were losing WotC money, and that's what caused WotC to move away from 3.5 (and 4E). That, however, isn't the case; they weren't losing money, they just weren't making enough for those editions to be something they wanted to invest in.

And yet now theybare: thst would seem to indicate it is a better strategy, if it both has a higher ROI percentage, but higher absolute sales.

 

[Alzrius]

A serious comparison isn't something I see much of, more people trying to reply their feelings and preferences. And we are talking about games here, so making purchases on preferences is more than fine, that's the point. But feelings are not ethical analysis.

Except that this thread (at least recently) is about an ethical analysis...not originally, but that was the tangent that another poster introduced, so now here we are. Which honestly strikes me as fine, because it allows us to talk about why we feel the way we do, instead of just being vaguely aware of it and struggling to articulate it.

Paizo isn't posting stuff for free outbof generosity: that's a strategy to make money, same as ORC or the OGL.

That's literally what I said; it's a strategy that's to the benefit of their customers, as opposed to a strategy to make money that's to their customers' detriment.

 

[Parmandur]

That's literally what I said; it's a strategy that's to the benefit of their customers, as opposed to a strategy to make money that's to their customers' detriment.

So, similar to adopting a slower release schedule for books?

 

[Alzrius]

And yet now theybare: thst would seem to indicate it is a better strategy, if it both has a higher ROI percentage, but higher absolute sales.

Presuming I'm understanding you correctly (i.e. that "theybare" is supposed to be "they are"), that doesn't indicate that it's a better strategy, simply because we can't attribute those higher sales/ROI to their new product release schedule. As was noted earlier in the thread, a lot of factors (many of which are outside of WotC's control) are responsible for why 5E is so popular now. Saying "they slowed down the release schedule, and that's why they're profitable now" isn't a deep, or correct, analysis.

 

[Alzrius]

So, similar to adopting a slower release schedule for books?

No, that's not at all similar. I don't know why you'd think it was (unless you're making a veiled reference to piracy).