Is Wotc Slipping?

[Retreater]

Since everything I'm writing seems to be being used as fuel for a flame-war, I'm going to stop posting in this thread ... after I clear up some of Fifth Element's confusion about my previous post.

Obviously. I was pointing out that his thoughts are based on some very big assumptions that have no necessary basis in reality.

Let's look at an example with which you may have no emotional interest.

In this example, we will say that a delicious Subway sandwiches restaurant opens next door to your office. However, you and your coworkers always get together on Wednesdays for chili and Frosties at the Wendy's on the other side of your office.

Unless you go out to eat twice a week, you and your coworkers will be purchasing your lunch at either Wendys or Subway. If you alternate one week going to Wendys, the next to Subway, Subway will be selling to you exactly one half the number of footlong meatball subs they would if you would go there every Wednesday.

Now out of my hypothetical example, let's switch some terms. Coworkers = fellow gamers; Wendys = WotC and 4E; Subway = Paizo and Pathfinder. The individual products (meatball subs, Frosties, etc.) = game products including DDI, Adventure Path, Campaign Settings, etc.

WotC has to be making less money than it did during the height of 3.5. This is an assumption, sure, but it is based in reality:
1) The economy is not as good; discretionary income has dropped.
2) Many players (maybe not 50% but a sizable chunk) are playing other systems (either Pathfinder, 3.5, etc.) - let's be generous and say 20%
3) If the existing players of 4E do not purchase product to replace the amount that the lapsed players are not purchasing - and if WotC doesn't get more players to help plug that purchasing gap - they will be making less money.)

So unless you think that WotC's profits during their 3.5 peak were so super-stellar that they could afford to shave off 20% profit and not notice, then you can beat that the lost revenue is coming out of something other than the Hasbro CEO's kids' college fund.

Not big assumptions. Little assumptions.

Retreater

 

[Fifth Element]

Unless you go out to eat twice a week, you and your coworkers will be purchasing your lunch at either Wendys or Subway. If you alternate one week going to Wendys, the next to Subway, Subway will be selling to you exactly one half the number of footlong meatball subs they would if you would go there every Wednesday.

That's your assumption: that we'll only go out to eat once per week. That's not necessarily true. Your analogy is flawed as well, since at restaurants you buy consumable goods, while books are not consumable. Once you buy the book, you have it. Since I have no emotional involvement with the subject at hand, you could stick with it and keep away from the analogies.

WotC has to be making less money than it did during the height of 3.5. This is an assumption, sure, but it is based in reality:

During the height of 3.5? I'd probably agree, but would still know that it's simply an assumption. But for the rest of 3.x's life? I don't know.

WotC is presumably making good money off of DDI, which didn't exist in the 3.5 days. Many players have probably purchased both 4E and PF products (like me, for instance), so people playing PF doesn't mean they're only PF players, and people playing 4E aren't only 4E players. Many gamers play both systems, and buy stuff for both. We have no idea what the degree of overlap is, but it is there and makes simplistic 75/25 (or whatever) breakdowns of the market naive.

Also, when you say "making less money", do you mean gross or net? Gross sales are one things, but costs also factor into profit. And if you think we know nothing about WotC sales figures, we know even less about their costs.

 

[Fifth Element]

Exactly. Most Pathfinder fans are happy with Pathfinder. It doesn't matter if WotC releases a much different feel of 4E (the Essentials series) or makes an online-only Character Builder. Most Pathfinder fans seem to be happy with the game that they chose.

That's not what he said. You seem to be saying that PF fans made their choice, and they're sticking to it regardless of what happens in the future. While that may describe some people, I'd say most people would take notice of any big changes and investigate them to see if they're to their liking. Most people make (relatively) rational choices, and wouldn't ignore everything WotC does just because they once decided that they preferred PF to 4E.

 

[Deset Gled]

Let's look at an example with which you may have no emotional interest.

[Food example]

Not big assumptions. Little assumptions.

Retreater

Personally, I don't really disagree with you about the basics of the economics involved. Your example show the situation relatively well. There are some interesting nuances that make this an imperfect example, and are worthy of discussion, but I don't see that as being as big of a deal with your stance.

The point where you lose me is when you say (paraphrasing using your example):

"Subway doesn't have the brand recognition to lure in new eaters. Wendy's is losing the market share of the healthy eaters. Hence, both restaurants are doomed to turn into food carts." And, "This means that Wendy's is no longer selling as many burgers, so quality of everything goes down."

Nothing in your example explains how you get from point A (economics) to point B (doom and gloom). You seem to be assuming that competition will lead to death, when it can really lead to a multitude of different options.

 

[Aberzanzorax]

Pretty much amazon is worthless. <snip>

Ok, this post wasn't bad by itself, really, at all (no offense directed at you carmachu), but I gotta say, it's a very small part of a trend that has really begun to piss me off.


Yes, anecdotes are tiny pieces of information. Yes, Amazon is only a part of the sales of both companies. Yes, ENworld polls are not "all gamers" or even "all gamers who frequent online websites."

But, WOW, to call informaion worthless is missing something. No, it's not scientific...it's not a dual blind comparison, but it is data. Enough anecdotes (especially when there are no counter anecdotes), enough data (even if it's data points that only express single hours of sales) from a major (THE major) online seller of books, enough polls (with the context/perspective of who is being polled taken into account), and you start to have some valuable information.


Is it perfect? No. Is imperfect information used daily by clinicians, scientists, researchers, and companies of all sorts, especially if it is "the best" information they can obtain to inform themselves? Yes.



I'm just making the point that small pieces of information can be important...and they can be especially important in aggregate. To dismiss them is shortsighted (whether you agree with them or disagree with them). You might ask for more, you might deny a trend, but to say that "ENworld polls are worthless/don't mean anything" or somesuch is fairly obtuse, in my opinion.

 

[nedjer]

Probably.

Bizarrely that's my research specialisation aka systemic predictive modelling. So far, theory describes RPG industry outcomes at 96% accuracy; but only as a closed system.

It's pretty widely used in most industries and I'd be surprised if larger TRPG companies don't consult with modellers on a regular basis. Not doing so is much like taking a walk along a cliff front with a blindfold on.

Put another way, the videogame industry sure does.

 

[Erik Mona]

Does this probably mean that the sales of the tabletop rpg branch is not what makes the most profits for the D&D brand?

I think that's an interesting lens through which to view the brand's development in the last year or so, but I have no data to say one way or the other. I know for the longest time that conventional wisdom said the novels brought in more money than the game. I don't know if that's true, and it does seem like the D&D "footprint" in the novels section of most bookstores has shunk a bit in recent years, but it wouldn't surprise me.

--Erik

 

[Fifth Element]

I think that's an interesting lens through which to view the brand's development in the last year or so, but I have no data to say one way or the other.

Don't let that stop you; the theme in the RPG Industry forum lately seems to be "what can we assume about WotC and/or Paizo's finances, based on little or no data?"

 

[Erik Mona]

I have a few responses to Mr. Mona's earlier post.

Cool. I appreciate the measured response and always appreciate a chance to get into it on the business side of things every once in a while.

True. I was merely stating that some players will play only "D&D" due to the name recognition.

I'd call those folks "brand loyalists," and my suspicion is that they will migrate to the new version of the game pretty much no matter what it is. I don't think this audience is all that firm in its convictions, though. If they start to sour on the system or can't find any players I think a fair number of them would be willing to migrate, especially if their friends are playing something else, the other game is available in local game and bookstores, and there's decent organized play. A lot of folks who would never touch a non-D&D (or non-WotC) game probably don't have a tremendous amount of experience with other games. Show them something fun, with a good network of local players, and I suspect many of these guys would try it out. If I had friends pulling me to the local D&D Encounters game I'd probably go, even though I'm not all that interested in the system.

Others will never switch, and will eventually end up posting on a future version of Dragonsfoot, only for whatever edition they decide they love the most. More power to them.

If you're in a community such as mine (for example) where 50% of the people will play only D&D and the other only Pathfinder, this schism results in a fragmented player base. Stores don't know what materials to carry, GMs have trouble sustaining groups with enough players, etc.

It's the stores' responsibility to keep pace with public demands, and it's the game producers' responibility to make products that appeal to the widest number of gamers possible. Lots of retailers in lots of communities are making lots of money selling Pathfinder, just as lots of them are making lots of money selling D&D.

We're in the process of reaching out to local retailers and providing them with information about how to stock our product lines. Just this last weekend we held two packed seminars at the Gama Trade Show in Las Vegas where a retailer named Gary Ray at Black Diamond Games in California did a presentation of how he has had success stocking both Pathfinder _and_ Dungeons & Dragons. Here's a link to his presentation.

It's up to the game companies to make games people want to play. We're certainly going to keep releasing appealing game stuff, and I suspect the folks at Wizards of the Coast (and other publishers, as well) are going to try to do the same. Ideally, everyone's products are so awesome that it grows the pie overall. I think that was certainly Wizards of the Coast's goal with the Essentials line, and for all the internet chatter I hear about relatively new customers becoming engaged in their D&D Encounters program, it sounds like they have had some success with it. See also the Red Box in Target and Wal Mart.

However, the Basic Set is not the only way to get new players interested in the hobby. Consider that even in my small area that WotC has Encounters, D&D Game Day, etc., while the Pathfinder Society has no presence.

Where do you live? We've recently signed on volunteer "venture-captains" who help to get Pathfinder Society chapters started all over the country (and world, but that'll take a bit more time), so this is a problem I can very likely rectify.

The Pathfinder Society is still relatively young (and the Pathfinder RPG is even younger!), so it'll take a while before we have a completely solid infrastructure of local organized play gaming, but we are working on it!

What if Paizo could create some short Encounters-like sessions that could be given to game stores so they can test drive Pathfinder with interested players?

That would be awesome.

I do disagree that most Pathfinder fans will defect from Pathfinder to play 4th edition. Most I know will never purchase another WotC product - even those that are not edition specific including miniatures, dungeon tiles, etc. They consider Pathfinder the final evolution of D&D. They detest 4E and aren't in the slightest bit interested in a 5th edition release.

Well, I think a lot of those folks could probably be wooed with a good marketing strategy and some products that appeal to their interests, but that's some other guy's job, not mine.

So what was once the industry leader with the greatest market penetration is now turning out fewer products and has less market presence than they did 5 years ago.

I fail to see how this isn't bad for the hobby in general. It's terrible for WotC specifically. Good for Paizo. I personally have doubts if the hobby can survive without the D&D brand.

Lots more bad stuff needs to happen for Dungeons & Dragons to "die" and leave the hobby without its anchor brand.

I mean, geez. How did we go from Red Boxes in Wal Mart to "D&D is going to die and leave the hobby in quicksand" so rapidly? Wasn't that just a couple of months ago? I guess time really goes fast on the internet.

What now needs to happen is to grow the Pathfinder fan base. Go for a 75/25 split with WotC. Make it so that GMs can find 3 PF players instead of 2 PF players and 2 4E players.

Ok.

--Erik

 

[TheAuldGrump]

Heh, Pathfinder will find true name recognition when Jack Chick and the 700 Club hold up the Pathfinder RPG as the Devil's Bible.

Seriously though, D&D has enough name recognition to have impact on non-gamers. The only other game that I can think of that has had similar impact is Vampire: the Masquerade.

I know of folks who use the terms Dungeons & Dragons and D&D synonymously with Role Playing Games. (My mom was one of them.)

The Auld Grump