Paizo laying off 12 due to fallout from Diamond's bankruptcy

Paizo is laying off 12 employees, due to losses sustained from Diamond Comics' bankruptcy last year. Paizo announced the news in a post made to their website today, citing losses caused by ongoing litigation surrounding Diamond's bankruptcy. Paizo stated they lost $2 million in 2025, which has necessitated the move. Diamond was Paizo's exclusive bookstore distributor and Paizo was one of several RPG companies caught up when Diamond declared bankruptcy last year. JP Morgan Chase claimed a lien on all product currently held by Diamond after they declared bankruptcy, which included stock owned by Paizo that was held by Diamond for consignment sales. Diamond also appealed the termination of Paizo's exclusive contract, meaning that Paizo hasn't been able to move to a new bookstore distributor.

Paizo is currently working with their union on the layoffs, with severance offered to impacted employees. If volunteers aren't found, Paizo will layoff the least-senior employee in each impacted division.

Additionally, Paizo will reduce their new Pathfinder Society and Starfinder Society offerings to once a month starting in October. Foundry VTT modules for organized play will also be paused until Paizo can find a way to increase profitability. "These changes are not a retreat," Paizo said of the changes. "Paizo believes strongly in the power of Organized Play and always will, but the current publishing model for Society scenarios is not working and we need to slow down, stem the financial losses from a struggling program and evaluate where to go from here."

 

[JLowder]

is that it was previously determined as part oft his whole mess that companies were perfectly aware that they were cutting corners, but figured it would be OK

That's possible, certainly, but not what I have heard from the companies I've talked to. And when you look at the original list of companies impacted, it included some very big operations, with legal departments that would not be cutting corners. This points strongly to problems with the way Diamond was framing the consignment deals and inventory control rather than the publishers cutting corners.

But shortsightedness or not crossing Ts is a possibility in some instances. A number of game industry publishers were cut out of the recent Anthropic AI copyright theft settlement because they did not formally register their copyrights. To be fair, that can be a challenge for smaller operations, so there are good reasons some did not. That's understandable. But some publishers with resources simply chose not to. Cutting that corner likely cost them tens of thousands of dollars, or even hundreds of thousands, from the settlement.

Back to the original consignment topic--even with publishers tempted to cut corners or unaware of the corners existing, Diamond should have insisted all their business partners have all the paperwork done to make the deal run the way it was supposed to.

 

[Parmandur]

Back to the original consignment topic--even with publishers tempted to cut corners or unaware of the corners existing, Diamond should have insisted all their business partners have all the paperwork done to make the deal run the way it was supposed to.

Oh, yeah, pretty clear who is at fault ethically here...tragically, I am skeptical the legal cogs will turn well here for the companies involved.

 

[Mustrum_Ridcully]

That sucks a lot. I hope Paizo can weather this storm and recover, and the people lay-off find other employment and keep using their talents and following their RPG passion.

 

[JLowder]

If you are looking for ways to immediately support Paizo and the other publishers impacted by the Diamond situation, buying things directly from the publisher web store, if they have one, is the most direct option. If the publisher is set up at a local convention, buying from them there is great, too.

That said, supporting your local brick and mortar store and getting them to stock the games from the publishers you support is also vital, especially for the mid-tier and small publishers--and the health of the hobby ecosystem writ large. Having a game on the shelves of a local store increases the chances of new players discovering and trying it, and local hobby stores can help build and support player communities. And at the end of the day, TTRPGs are all about player communities.

 

[smiteworks]

If you are looking for ways to immediately support Paizo and the other publishers impacted by the Diamond situation, buying things directly from the publisher web store, if they have one, is the most direct option. If the publisher is set up at a local convention, buying from them there is great, too.

That said, supporting your local brick and mortar store and getting them to stock the games from the publishers you support is also vital, especially for the mid-tier and small publishers--and the health of the hobby ecosystem writ large. Having a game on the shelves of a local store increases the chances of new players discovering and trying it, and local hobby stores can help build and support player communities. And at the end of the day, TTRPGs are all about player communities.

All of our licensed partners (many of whom are affected) have their products available for Fantasy Grounds VTT, and any of those purchases also pays back a hefty royalty to the IP owner -- much like a brick and mortar purchase. We just put together some new bundles for some digital Paizo flip-mat packs for Fantasy Grounds at a 60% and 70% discount if you buy the full bundles. Those can then be synced with Paizo to get the PDF versions added to your Paizo.com account as well, or used within Fantasy Grounds VTT with line-of-sight preset and ready-to-run.

These packs work great for any fantasy game, so they are not locked to only Pathfinder 1E or 2E.

https://fantasygrounds.com/store/productbundles.php

 

[djotaku]

If you are looking for ways to immediately support Paizo and the other publishers impacted by the Diamond situation, buying things directly from the publisher web store, if they have one, is the most direct option. If the publisher is set up at a local convention, buying from them there is great, too.

That said, supporting your local brick and mortar store and getting them to stock the games from the publishers you support is also vital, especially for the mid-tier and small publishers--and the health of the hobby ecosystem writ large. Having a game on the shelves of a local store increases the chances of new players discovering and trying it, and local hobby stores can help build and support player communities. And at the end of the day, TTRPGs are all about player communities.

I mentioned this in another thread a few months ago, but for the larger companies - buying at my FLGS is a losing proposition (financially). If I'm buying from WotC I get a better deal getting a physical/dndbeyond bundle. If I'm buying from Kobold Press I get a better deal buying a physical book/PDF bundle. If I'm buying from Paizo, the best deal is to be subscribed and get the PDF free.

Now, for smaller companies (for some reason) buying from FLGS can be an OK proposition because a ton of them are in some initiative that gives you the PDF free if you show them that you bought the book at the game store.

In that thread I mentioned from a few months ago, people spoke about how annoying it is to do this at scale, which is maybe why only the small companies offer it. But it means that things need to really be a lot cheaper at the local shop for it to make sense to me. I guess that's why most of them survive by actually being Pokemon/Magic the Gathering shops that happen to also sell TTRPG books.

 

[MoonSong]

I mentioned this in another thread a few months ago, but for the larger companies - buying at my FLGS is a losing proposition (financially). If I'm buying from WotC I get a better deal getting a physical/dndbeyond bundle. If I'm buying from Kobold Press I get a better deal buying a physical book/PDF bundle. If I'm buying from Paizo, the best deal is to be subscribed and get the PDF free.

Now, for smaller companies (for some reason) buying from FLGS can be an OK proposition because a ton of them are in some initiative that gives you the PDF free if you show them that you bought the book at the game store.

In that thread I mentioned from a few months ago, people spoke about how annoying it is to do this at scale, which is maybe why only the small companies offer it. But it means that things need to really be a lot cheaper at the local shop for it to make sense to me. I guess that's why most of them survive by actually being Pokemon/Magic the Gathering shops that happen to also sell TTRPG books.

More like toys, and by that I mean Funkos

 

[JLowder]

In that thread I mentioned from a few months ago, people spoke about how annoying it is to do this at scale, which is maybe why only the small companies offer it. But it means that things need to really be a lot cheaper at the local shop for it to make sense to me. I guess that's why most of them survive by actually being Pokemon/Magic the Gathering shops that happen to also sell TTRPG books.

The economies of scale and distribution are somewhat complicated. For the purposes of short-term assistance to a company, buying direct at their web site or direct from them at a show is the biggest quick infusion of money. The publisher gets the biggest cut of the cover price this way and gets the money the fastest.

Second-best might be to get your local store to order something they do not currently stock, as that means they are going to their distributor or the publisher and ordering the book. Unless the distributor has already bought (not taken under consignment) a number of copies of the book in anticipation of future sales, this likely registers as a new sale for the publisher. For this transaction, there will be a lag in the money going from the store to the distributor and then from the distributor to the publisher.

If you buy a book your local store already has on the shelf, that's always a win for the publisher on one level, but in terms of cash flow impact, the publisher may have been, and like was, already paid for that copy. If the store then reorders the book to get it back on the shelf, though, that's just like option 2 above.

As always, you have to look at your own finances and decide what is possible for you. It's a rough economy for almost everyone right now. But if you have the options and are looking to support the publishers impacted by the Diamond situation, the info above might help you target that action for the biggest impact, based on your own circumstances and viable options.

 

[Parmandur]

If you buy a book your local store already has on the shelf, that's always a win for the publisher on one level, but in terms of cash flow impact, the publisher may have been, and like was, already paid for that copy.

The weird thing is that we may see a situation in the next few years where millions of dollars of Paizo product (among others) make it to retail shelves without the publisher having been paid at all, if Chase/Diamond are allowed ti go through with their plan.

So more than lost revenue even, this creates millions of dollars of direct competition, because how many people walking through Half Price Books who were curious about checked ng out Starfinder someday will know about any of this?

 

[Morrus]

The weird thing is that we may see a situation in the next few years where millions of dollars of Paizo product (among others) make it to retail shelves without the publisher having been paid at all, if Chase/Diamond are allowed ti go through with their plan.

Yeah, that's the really weird bit. Not only will Paizo not get paid for $10M worth of stock, they'll also find it harder to sell any new stock as the old stock is being sold off by somebody else at knock-down prices. It's a double-whammy.