RPG Evolution: The Child Becomes the Parent

D&D is doing really well, well enough that Wizards of the Coast is starting to take over its parent company, Hasbro. So what's next?

Graphic courtesy of Hasbro.​

Chris Cocks is Doing Really Well​

The untimely death of Hasbro's CEO Brian Goldner triggered a leadership shuffle that resulted in President and Chief Operating Officer of WOTC, Chris Cocks, being named Hasbro's Chief Executive Officer and a member of the Board of Directors, effective February 25, 2022.

Cocks was named CEO of WOTC on April 11, 2016. He was CEO of WOTC for six years before being promoted to lead Hasbro. Cocks in turn was replaced by Microsoft's General Manager and VP of Gaming Ecosystem, Cynthia Williams.

The move is surprising until you take into account just how well WOTC is doing.

Wizards is Doing Really Well​

As Russ posted previously, WOTC made over $1 billion in total sales in 2021, including $952M in tabletop games (some of that at least due in part to Magic: The Gathering sales). Tabletop games grew 44% and accounted for 74% of the $1.3B sales for WOTC in 2021. WOTC was responsible for a staggering 72% of Hasbro's total operating profit.

With numbers like that, it's not surprising that Hasbro noticed. Investors have noticed too.

"Let My Wizards Go"​

Alta Fox Capital Management, an activist shareholder group, has a problem with Hasbro's Brand Blueprint. Here's what Hasbro has to say about their strategy:

The Brand Blueprint is Hasbro’s strategic framework for bringing our brands to life in exciting new ways. We see our brands as story-led consumer franchises that we bring to life through compelling content across a multitude of platforms and media, with a wide variety of digital experiences, music, publishing, and location-based entertainment, and an impressive array of consumer products, spanning a broad range of diverse categories. Each brand activates the Blueprint differently, but the result is consistent: deeper consumer engagement, innovative brand and product experiences and increasingly expansive opportunities for our portfolio.

We can see this in action in how the D&D brand is being leveraged across multimedia. Hasbro's strategy is to do the same with all of its brands, including My Little Pony and Transformers. The idea is that Hasbro is not merely a toy or game company, but a brand company that spins products out of its core brands, from toys and games to movies and esports.

Activist investors Alta Fox Capital feels differently:

We believe Hasbro, Inc. (“Hasbro” or the “Company”) is severely undervalued due to its ineffective “Brand Blueprint” strategy, flawed corporate structure and consistent misallocation of capital ... Alta Fox sees a three-year path to $200/share, more than 100% higher from current levels, with a refreshed Board, new strategy, improved capital allocation and tax-free spin-off of Wizards of the Coast.

To address what they see as these inequities, Alta Fox nominated a slate of five candidates to the Board of Directors to "improve alignment, restore accountability, bring fresh ideas and ultimately reverse Hasbro’s chronic underperformance."

We're finally at the point that investors like Alta Fox think WOTC is now better off without its parent. It's no accident that Alta Fox is making this proposal at the same time a new CEO from WOTC has been announced. Hasbro's response:

The Board and the Board’s Nominating, Governance and Social Responsibility Committee will review the proposed director nominees and present its recommendation regarding director candidates in the Company’s proxy statement and accompanying WHITE proxy card, which will be filed with the U.S. Securities and Exchange Commission. Proxy materials will be mailed to all shareholders eligible to vote at the Company’s 2022 Annual Meeting. The date of the Annual Meeting has not yet been announced.

Whether or not Alta Fox's play will work remains to be seen. But one thing is certain: the D&D and Magic: The Gathering brands are so powerful that they are now calling the shots for older board game companies. Here's hoping that's good news for fans of D&D.

 

[Baron Opal II]

Let's rebember lots of role-players are relatively casual. You only need to turn on the computer, videoconsole or the mobile to play Fortnite or another videogames, but a TTRPG needs a group meeting together (but they use virtual tabletops) and not always all the players can go the next game.

This is a great point! Of the number of game store owners I've talked to over the years, I've heard variations of "Capital Games down the street isn't my competition. The movie theater, streaming services, computer games, even poker nights- those are my competition."

 

[Eyes of Nine]

This is a great point! Of the number of game store owners I've talked to over the years, I've heard variations of "Capital Games down the street isn't my competition. The movie theater, streaming services, computer games, even poker nights- those are my competition."

It's often been shown that similar businesses in close physical proximity do better than their peers. For example 4 gas stations on each corner of an intersection all do better than 1 way over all by itself on a similarly busy intersection. It's because everyone knows that if they need gas, they can go to X intersection to get gas, no matter which direction they are coming from. AND they get a bit of price competition, so they are incentivized to visit there first. Gas and games are NOT the same; but the same microeconomic concept applies imho.

Also, when I owned my store, the big competitors were Amazon and eBay. And for mindshare, it was World of Warcraft and other MMORPGs

@FitzTheRuke may have differing opinions, still being in retail

 

[FitzTheRuke]

@FitzTheRuke may have differing opinions, still being in retail

I am friendly with all my "competition". We have a Facebook group where we share info (and sometimes stock). We are all far more concerned by Amazon and stupid stuff done by publishers, distributors, and shipping companies, than we are by each other.

None of us are particularly close together, though. I know places where stores ARE close together, and it usually works out fine.

No, our problems nearly always come from "above" and not sideways.

 

[Bohandas]

In retrospect I can't believe I didn't notice before how sinister that diagram looks.

 

[Umbran]

Doesn't change the fact that D&D gamers have zero interest in innovation.

Well, no. Because innovation itself is not particularly valuable to the consumer, and so isn't much of a selling point to most of any market.

Innovation, or change for the sake of change, generates curiosity. But, curiosity itself generates flash-in-the-pan sales to early adopters. Beyond that, you need to give the customer the experience and utility they want. Do it innovatively, or with tried-and-true methods, the market mostly doesn't give a fetid dingo's kidney.

This is true for rpgs, smartphones, washing machines, or TV shows..

 

[Umbran]

In retrospect I can't believe I didn't notice before how sinister that diagram looks.

Now, look at the diagram, and remember the Great Wheel cosmology...

 

[Hussar]

Well, no. Because innovation itself is not particularly valuable to the consumer, and so isn't much of a selling point to most of any market.

Innovation, or change for the sake of change, generates curiosity. But, curiosity itself generates flash-in-the-pan sales to early adopters. Beyond that, you need to give the customer the experience and utility they want. Do it innovatively, or with tried-and-true methods, the market mostly doesn't give a fetid dingo's kidney.

This is true for rpgs, smartphones, washing machines, or TV shows..

You kind of cut out the meat of my post. History in TTRPG's has pretty clearly shown that gamers are not interested in innovation. They want things to be very, very much the same as they were yesterday. Change is almost always viewed with hostility - be it changes to mechanics, lore or anything else in the game. WotC's entire 5e strategy has been based on that fact. They have rocked the boat the absolute minimum since 5e was released.

And, we need only look at the very lukewarm reaction to Pathfinder 2.0 to see how well the hobby takes to change. Or, look at virtually every other RPG that has changed only in very minimal ways between editions - Call of Cthulhu, for example. Nearly every single time an RPG company has tried to do something different, they get slapped down by their customers.

Innovation is most certainly not "change for the sake of change". "Change for the sake of change" is the flag that gets run up by conservative gamers who are inherently opposed to any changes being made.

It doesn't matter that you can learn to type considerably faster on a DVORAK keyboard very quickly and the main reason we use a QWERTY keyboard is to slow us down so we don't jam the no longer existent keys on a manual typewriter. People will absolutely resist change no matter what.

 

[Bohandas]

I think the proximate reason we use qwerty keyboards is because for the majority of us that aren't just learning to type it's easier than learning a new system. Also it would break a lot of videogames

 

[Hussar]

I think the proximate reason we use qwerty keyboards is because for the majority of us that aren't just learning to type it's easier than learning a new system. Also it would break a lot of videogames

This predates video games on a keyboard by a decade or two at least.

And, really? Instead of using WASD to move, you'd simply use 4 other keys in the same position.

But, again, forest and trees.

 

[seebs]

It would break existing games in that, if you had an existing game that had not been updated and didn't let you rebind everything, it wouldn't work, and the overwhelming majority of games would never get updated. (And the majority don't have unlimited key rebinding.)

I also note that dvorak doesn't appear to let people type "considerably" faster. It might be faster at all. The main reason I use it is it reduces pain, but words per minute isn't that different.