Time to update your resumes!

[JeffB]

I think it's safe to say that they took a financial bath on Gleemax over the past year. But just how bad it was, and how it will impact WotC, remains to be seen (though it's a really bad omen that it was large enough to be mentioned in that earnings call).

This.

. When I hear "gross profit were partially offset/fully offset by increased operating expenses, primarily increased product development," the first question I ask is, "When can we expect to see return on this investment for this major undertaking?" and second question is, "What's the plan to recoop those profits if this undertaking tanks?"

I guarantee their investors are asking the same questions.

And This.

 

[Scribble]

I'm an investor in a major pharmaceutical corporation. When I hear "gross profit were partially offset/fully offset by increased operating expenses, primarily increased product development," the first question I ask is, "When can we expect to see return on this investment for this major undertaking?" and second question is, "What's the plan to recoop those profits if this undertaking tanks?"

Valid questions. What I'm saying is that taken without the call, the report seems like a problem. With the call, they explain what's going on. They say: We've again made a profit this quarter that was again better then the last. Since the profit is so high, we're investing part of it back into the company for long term growth.

Long term growth does not mean tomorrow.

I invest as well.

I guarantee their investors are asking the same questions. Their DI has been worse then a joke. Gleemax bombed. Their previews of the online version of the game has been pittiful at best. The OP's sentiment is valid.

I don't think Gleemax was really a part of the digital movement from the start. I think someone managed to get that tacked on there after others got exceited about the digital movement.

 

[paulsometimes]

This just in: The sky is falling! I think it's a bit soon to say anyone needs to ready their resumes. Maybe one or two people might, but that's only because in any company I've worked for, there's always one or two people readying their resumes. While Gleemax and DDI weren't my cup of tea, they seemed like sound ideas. I think WotC is likely to try again, hopefully using the lessons learned from this attempt.

 

[TikkchikFenTikktikk]

Double post, sorry.

 

[TikkchikFenTikktikk]

DDI, Gleemax, and MTGO are not good ideas. They're great ideas.

The fact is, all have had absolutely terrible execution.

It has finally gotten bad enough that WotC can't hide it in their division's financials anymore and executives at Hasbro have noticed.

It has gotten bad enough that WotC has seen a significant shakeup, including major changes in Magic's organized play support, dropping of whole product lines, and negative mention in the quarterly financial report and earnings call.

I am a major believer in learning through experience, particularly learning from mistakes. The problem, and my point, is that management at WotC has shown a pattern of not doing that and repeating mistakes.

From a stockholder's point of view, it is past time those responsible for repeating mistakes and failing to execute need to be cut as dead weight.

All is not doom and gloom for WotC. Their core brands--pnp D&D and cardboard Magic--are doing fine. Other brands like Maple Story CCG and Duel Masters are doing very well.

I'm DMing 4E D&D and just bought a ton of Eventide (Magic's latest set). I wish I could play MTGO since I love league play. I want WotC to continue as a company and to continue to put out great product.


Aside: I interpreted the statements about investing and reinvesting in digital as regarding their deal with EA. It's not about letting WotC continue to fail.

 

[Waylander the Slayer]

DDI, Gleemax, and MTGO are not good ideas. They're great ideas.

The fact is, all have had absolutely terrible execution.

It has finally gotten bad enough that WotC can't hide it in their division's financials anymore and executives at Hasbro have noticed.

Having sat through the financial statement disclosure company meetings for some of the largest financial companies as well as being on analyst calls numerous times, I can guarentee that the question of the ROI (return on investment) has absolutely been asked in ten different ways and answered internally and by analysts if it was disclosed in the company 10-Q as being one of the main reasons for a loss of profitability in the current quarter.

This means that depending on the answers given internally (the investment will return XXX% profitability); there will be accountability involved on whoever is responsible for the product line(s) and the segment will be frequently and closely monitored (guarenteed that the same questions will be asked again by analysts, hence internally beforehand as well). So the OP's POV is not "intraweb sky is falling syndrome." I would expect leeway at least until the 10-K for 2008 is released and whatever fallout (if there is; if the DDI is wildly successful there might be positve repurcussions) to happen right around that time.