Reasons for WOTC's layoffs

[dagger]

Is that sports card game they got doing ok?

 

[Vuron]

Unless of course an anonymous insider with access to such information were to surreptiously violate his/her NDA and provide us with such a wonderful scoop/ firebomb.

 

[mhensley]

I didn't mean to imply that I thought that WOTC was going out of business or anything. On the contrary, I'm sure that they are a profitable company. They just aren't near as profitable as they were when Hasbro bought them.

 

[Zappo]

Well said.

We don't know very much at all, truth be told, and because of those nasty NDAs everyone signed, we're not likely to know anytime in the future either.

I guess we'll just have to suffer in silent ignorance.

Could be the preparation for the biggest April's Fool in known history, for what we know. Though I doubt it.

 

[mhensley]

besides, if the profits from the CCG's turn into losses, why would they liquidate their RPG line, which was doing quite well the last i knew? why wouldn't they just get rid of the CCG lines and keep the RPG lines (so long as they remained profitable?)

Well, having been the victim of layoffs myself a couple of times (ahh, the fun of being a webdeveloper), I would guess that they did an across the board layoff of a certain percentage of their workforce. We are just hearing about the RPG side here.

I saw this on http://www.mtgnews.com/story/956/1/1/1/ -

We were told that the layoff will be 100 people, with 60 from the corporate office in Renton. Managers in Wizards had a meeting this afternoon. Layoffs are not from any one particular department. It's a commpany wide trim down.

 

[DwarvenBrew]

Hasbro Reports Full-year and Fourth Quarter 2001 Earnings

"For the year, net revenues worldwide were $2.9 billion compared to $3.8 billion in 2000. Reductions in revenue from POKEMON, Furby and the sale of Hasbro Interactive were $1.1 billion for the year. Excluding these three product lines, revenue increased $127 million or 5% for the year. Total fourth quarter net revenues were $988.7 million compared to $1.2 billion a year ago. Reductions in revenue from POKEMON, Furby and the sale of Hasbro Interactive were $215 million. Excluding these three product lines, revenue increased $41.3 million or 5% for the quarter."

10-Q FOR PERIOD ENDED SEPTEMBER 30, 2001
Nine Months ended September 30, 2001 vs. October 1, 2000

Net revenues in $M (Games segment, which WotC falls under):

External: $778,400 vs. $1,352,419
Affiliate: $44,445 vs. $73,071

"As part of our program to improve long-term profitability and lower our break-even, we reduced expenses in continuing businesses in sales and marketing; research and development; and administrative functions by approximately $100 million. This is in addition to the reductions associated with the sale of Hasbro Interactive and exceeded the target we set at the end of 2000,'' said Alfred J. Verrecchia, President and Chief Operating Officer.

We are confident that we are making the right moves to make Hasbro leaner and more consistently profitable for our shareholders."

I really don't think that this is strictly a WotC problem.

 

[Umbran]

Unless of course an anonymous insider with access to such information were to surreptiously violate his/her NDA and provide us with such a wonderful scoop/ firebomb.

If said insider were anonymous, then we still wouldn't know, because we cannot tell an anonymous insider from an anonymous rumormonger. I won't be at all surprised if we have a rash of "anonymous insider" claims.

 

[Oracular Vision]

Not a rumor

CCG have augered in, according to my friend who owns a hobby store. I used to own one too, so we talk shop. M:TG and Pokemon are still being sold, but at drastically reduced numbers. M:TG, we agree, was over expanded and ruined because they were too greedy. Pokemon was a fad, like bottle caps and pet rocks etc., and anyone with half a brain should have known that it would end before too long. (Hasbro, and WotC did not know that, they overhired based on Pokemon, and have been gutting WotC to make up for it.)

D20 stuff is still selling, but some of the modules aren't (AEG and so on). The core book sales have tapered off to smaller, more normal numbers now.

What I think it means is that there will be even lower levels of customer response, such as errata, and more concentration on potential high sellers. Due to the lead times, WotC has a lot in the pipeline, but after that starts clearing, I don't know if they have the staff in house to make any new things worth buying. I don't think WotC can exist only selling core books. Remember the old 2nd edition days when they would publish as many guidebooks as possible, for no reason other than to keep the dough rolling in. But that didn't work.

I expect Hasbro, which has no clue about this industry, to eventually sell off WotC after they have milked it for what they could, probably whenever the sales reach a certain minimum threshold. It is even possible that they will agree to sell it to interested parties, who will use debt to finance it, leaving WotC finally unfettered, but devoid of resources and capital. This process is called capitalism, by the way, and is how businesses have behaved for 100 years or more.

 

[Cergorach]

My guess is that Hasbro is taking over WotC (they already own it, but it had some autonomy before). Eventually, when profits from CCG's turn into losses, they'll liquidate WotC - and the RPG division with it.

You act as if that is a bad thing...

Now, don't get me wrong, WotC resurrected D&D and made it prosper again. And IMHO they're also responsible for a new 'golden age' of roleplaying games. But most of the people who made the big leaps are gone from the corporate entity known as WotC. How long before they are all gone? How long before they are forced to operate with a skeleton crew? How long before quality begins to suffer?

I suspect that there is a strong possibility that eventualy D&D will be sold off to someone else, i do not see that as a bad thing. Especially when i see so many good D20 companies out there...

Probably a pretty useless rant, but i wanted to get rid of it ;-)

 

[RFisher]

It was a general move to improve efficiency, and does not stem from any "problems" (financial or otherwise) at WotC. This is a positive move for the company in the current economic climate.

I hate these kinds of lies.

Layoffs are always a sign of a problem. Layoffs are never positive. Despite the fact that there are an awful lot of unhealthy companies in this country, a healthy company should never have to resort to layoffs.

There are only two reasons for layoffs: (1) You core business is in trouble (which may or may not be management's fault). (2) You hired a lot of unnecessary people, which probably means you've got some managers of questionable talent.

If your company is so inefficient that the only way to improve efficiency is to lay people off, that is a real problem. (See #2 above.) Saying it's not a problem "financial or otherwise" is either lying or fooling yourself.

Not being able to identify a problem as a problem, find its root cause, and fix it, is a very bad sign.

Not that I think WotC is in grave peril. Maybe management really has found and fixed the problem. Even if WotC does have problems they haven't recognized or fixed, I doubt they are fatal. It just kills me that anyone can use the word "positive" when talking about layoffs.

I just hope that the many talented people affected stay in the game industry.