What happened with Vampire?

pickin_grinnin, I think you have some core differences of opinion with some in this thread when it comes to what's a good business move and what isn't, and I don't have actual numbers with which to agree or disagree, but while it's easy - as I said - to say in hindsight that they made a bad move, I really don't know what else could have been done at the time, either with WW or WotC. And WotC is doing the same thing again, for what it's worth. I think keeping a product running, supported, and expanding without rebooting must be much more difficult than people think.

I do have a very different perspective, for a couple of reasons. One is that I'm looking at things from a business perspective, keeping the realities of running small niche businesses in mind. I have had a lot of experience with that. I was a programmer/designer throughout the dotcom era. A LOT of bad business decisions were made by companies during that time, from mom-and-pop operations all the way up through huge corporations, and I saw them on a daily basis. The economic upturns during that period were very obviously indicative of a bubble, but very few people seemed to realize that at the time. I could see it, so when the bubble burst I was prepared for it, and adapted accordingly. Most of the people I worked for and with (and others in the industry) were shocked and surprised by it, and ended up in really bad positions afterwords.

In addition, I have done a lot of work since that time (in various capacities) on a consulting basis with relatively small companies, including small publishers. I have seen most of the stereotypical mistakes they make. Among those is the tendency to make desperation moves when they have economic downturns, to not do their homework when trying to figure out why their sales have dropped, and to not closely examine the real wants of their customers (as opposed to what they think they will want).

What does that have to do with the topic at hand? Gaming is an industry. White Wolf was a company, with a product and customers. General business rules apply. There is a reason that most small businesses fail early, and that many small businesses fail when they hit their first big economic slump. This situation is no different.

After typing out this post, I realized that it was pretty long. The next three paragraphs are brief summaries about the rest of the post, in case you don't feel like reading the whole thing.

White Wolf didn't understand the reasons that their sales were going down, and apparently didn't understand the state of the market at the time. They made a lot of bad basic business decisions that could easily have been rectified with better research into market conditions and the actual wants of their customers, both current and potential.

They overestimated the number of players that would stay with them, and underestimated the number of new players who would jump on board. It looks like they thought that trying to appeal to younger gamers (as opposed to keeping the adult feel of the game) would help their sales, without realizing that in doing so they were taking away parts of the games that made them so successful in the first place. That's the same mistake Wizards of the Coast made with D&D 4e.


The longer stuff...



I remember the rpg slump of the time, and recognized it as a temporary situation. It happens in many industries. I have been gaming since the late 70s, and have seen the gaming industry go through a lot of ups and downs. When White Wolf first announced that they were going to bring on Gehenna and end the oWod, it struck me as a desperation move, particularly in light of the general industry sales slump of the time (which was well known and widely discussed).

Taking a large existing system that has had a lot of support in the past and completely re-doing it is a very risky move. If you don't have a lot of money set aside (like Hasbro) and don't have a number of other marketable products, it can destroy a company, which is exactly what happened here. They obviously made poor decisions, most likely because they were desperate. If what has been said earlier in this thread is true, they didn't do appropriate market research, or they would have realized that the whole gaming industry was in a slump at the time. If they didn't realize that, they had their heads in the sand - it was a very well known thing at the time.

There are a number of things they could have done that would probably have worked better than introducing the nWod. One would have been giving the customers what they were asking for the most. Back at the time, the big push was for more types of vampires and more playable monster races in general. WW resisted that for a long time, but finally started to give in and introduce more playable vampire types. They really dug in their heels about more playable monster races, though, for some unknown reason.

Another approach would have been creating some new games altogether that either used the oWoD core mechanics or featured some sort of new game engine that they could use in common. They really should have been doing that all along, though. Diversification is always a good thing, even if it means developing new things and setting them aside for a rainy day.

Yet another approach would have been to hunker down, shrink a bit, put out fewer products each year, and wait out the slump. That often involves firing some people, but going lean and clamping down sometimes works for small businesses (though there are a lot of variables to consider going in).

The path they took was to simply shut down all development on their core product and try to launch another one. That's very risky, but was further complicated by not taking into account the reaction of their customer base. That's a big mistake. You never want to alienate your core customer base. Adding new customers is a good thing, but alienating your core base during a slump period is virtual suicide.

They made the same mistake that DC and Marvel continue to do with their universes. Since the 80s, every time they hit a slump they tend to do something to "reboot" or "clean up" their universes, often claiming that it's too hard for new readers to get involved in the titles (which is complete BS). They get a lot of publicity out of it, and a lot of people rush to buy the new titles, but two years later the excitement (and sales) die down. Along the way they alienate a lot of their long-term customers, which doesn't help long-term profits at all. That's why the comic companies rely so heavily on character licensing, movies, and toys these days. Sales of the actual comic books continue to decline, even when you take electronic versions into account.

White Wolf - and roleplaying game companies in general - can't rely on licensing, toys, movies, etc. to shore them up. Outside of D&D, they aren't going to get exposure in the general media when they make a major change. Even D&D can't rely on licensing, toys, movies, etc. to cover for decreasing sales (not completely, at least), even though it has the most recognition among the general public and the power of Hasbro behind them.

RPGs are a niche product, for a niche audience. They have never been more than a blip on the general public's radar, and probably never will be. Though everybody knows about D&D, the number of people in the general public who play it is very tiny. To make a living (or run a company) off a niche product, you need to know your audience VERY well, and make decisions that will make them happy. You also need to have a very, very clear idea of how much competition you have and the general state of the industry. To know all that, you need somebody on board who has a very good understanding of running small niche businesses. That's where a lot of RPG companies fall down.

Just for the sake of argument, let's say that scrapping the oWoD and creating the nWoD was a decision they had made after doing some very serious research into the state of the market and what their customers wanted. Previous comments in this thread would tend to contradict that assumption, but let's go for it.

If you are going to do something like that, you need to figure out what doesn't work in the old system and what does, and only change the parts that are too clunky. The good part about the nWoD was that they tried to tighten up the mechanics. The bad part is that they threw the baby out with the bathwater, tossing out the really great parts of the oWoD that are part of what made it successful in the first place.

For example, they should have retained the magic system. I don't know why they thought that going with a stereotypical approach to magic would be a good move, but it wasn't. The magic system is what made Mage unlike any other rpg at the time.

There was no reason to rewrite the basics of the vampire clans. There was nothing wrong with them, and keeping the same flavor of each vampire type would have made the game more attractive to their existing customers, many of whom had a definite fondness for one or more clan types. Changing them is like saying "We're rebooting Superman. He is now a green magical shapechanger, but we're keeping the name." That's not going to sit well with most existing customers.

Changing the art to be less mature-looking (and manga-ish, in some cases) made the system look like all the others out there. Though art should be a minor thing, it actually makes a big difference when selling written materials. The art was always one of White Wolf's strong suits, and trying to make it look less "adult" simply made the game look less intense.

I suspect (but can't prove) that the White Wolf people thought they could attract younger gamers with a change to the look-and-feel of the game and that they needed to do a complete re-write of everything to justify completely scrapping the old system. The problem with that is that a complete re-write alienated much of their existing customer base, many of whom refused to even try the new game. For those who did (like me), making the game less adult in feel and going a more simplistic, stereotypical magic system took away everything that made the game interesting in the long run.

Let's be honest, too. Though I think White Wolf was being more desperate than greedy, a lot of people in the gaming community saw the change as being motivated by greed (and many still do). It's not hard to see why people think that. White Wolf should have anticipated that, and had some really good publicity in place to counter it.
 

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To address the various things about Onyx Path.

I'm glad Onyx Path is around. They seem to be doing well, and I'm happy for them. If the materials they are putting out make most of their customers happy, they are doing things right.

I don't care for the materials they have put out. I have a friend who buys them all, so I get to look through them. They just don't suit my needs. They aren't badly done or anything like that. They're just not what I was hoping for when I heard that they were going to release more materials for oWoD. My comments about them simply related to how their materials fit into my needs, not what I think they should be putting out in general. Nothing less, nothing more.

I do stand by my statement about a lot of the materials being rehashes, though. Not all, but a lot. That might not be a bad business decision for them, since the old materials are out of print, and a lot of younger players seem to really like PDFs. They don't offer me anything of value since I have the old materials, and the additional things they put in the new versions of the books aren't enough to make me want to buy them again (though I would happily buy the new stuff released on it's own, as a supplement). Again, though, if their approach is what pulls in sales, they are making the right decisions.
 

Believe it. Most of Jimi Hendrix's earnings were post-mortem.
Sure, but that's hardly surprising since (a) his career was so short and his output both brilliant and prolific, and (b) just inflation since 1970 has inflated prices enormously.

His modest estate was turned into $80m by 2002, and is currently over $175m, and earns $10m annually in licensing fees and royalties. This puts him fourth on the list of top earning dead celebrities.
Hmm, "modest estate" by whose reckoning? Mike Jeffrey reported it as only $20,000, but honesty and accuracy were hardly his most notable features. Even by his account, that sum does not seem to include assets such as the Electric Ladyland studio.

It would probably be more, but Jimi died intestate, and his assets were tied up in a 30 year court battle.
Sure, and this brings up a nub of what I was saying; was the increase in value extraordinary, and was it a result of holding back some of the IP forming part of the estate (i.e. neither selling it nor licensing it)?

I am sceptical of this on several grounds:

- A fair amount of the music was in fact released, and has been earning (for the estate) for much of the 40+ years since Jimi's death. If it hadn't, I wouldn't have been saving my pocket money to buy it in the late '70s.

- To the extent that some of the material was not released, the reasons cited by the managers of the estate have frequently been quality and completeness related, rather than any expectation that the price was too low and could be expected to rise.

- The real initial value of the estate is debatable, but most credible sources put it at "multimillion" - probably low millions of real value at the time of his death. A sum of $7.5 million in 1970 would be expected to appreciate to $80 million by 2002 if simply invested in US GDP (which is what you should expect the long-term stock market value to parallel). That represents a very pedestrian rate of accumulation; a sum of $4 million accumulating to $80 million would be more like the desired expectation for a risky investment such as a popular music legacy immediately following an artist's death.

So, is that really an example of "holding back IP assets giving unusually good returns"? It's not impossible, but I remain sceptical and, even if it is, it's hardly a regular, run-of-the-mill case. It hardly proves that holding IP for accumulating value due to pent-up demand is in general a good business strategy, and I remain convinced that it's actually, in general, a very bad one.
 
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I think one of the other problems with WoD in general the more I think about it is the whole faction system. There are too many factions and the game is very political. Clans work to some extent but perhaps it would be better if they just gave a couple examples and then rules for creating your own. They did the off shoot book that covered playing an independent vampire, but I don't think it was self contained.

Vampire still lasted longer than Nightlife, which preceded it by a year. Vampire covers much of Nightlife's ground and is more expanded as Nightlife had everything in one book to start with; players could play vampires, werewolves, ghosts, demons and a few other monster types. The Magic book introduced sorcerers/witches to the game as well. I've often wondered after Nightlife disappeared if some of the designers didn't drift over to White Wolf.

Frack! There has been a Vampire/Werewolf/Mage type of game with the "Nightlife" name already?
But that's the title I wanted to give my Vampire/Werewolf/Highlander/Mage/Slayer style game!
 

Sure, but that's hardly surprising since (a) his career was so short and his output both brilliant and prolific, and (b) just inflation since 1970 has inflated prices enormously.
Even so, the growth in his estate has exceeded the benchmark you suggested- the ROI for stocks over the long term.

Plus, his estate has grown much faster and larger than other deceased musicians of similar stature and shortness of career, like Ritchie Valens and Janis Joplin. And it has done so in a way that it has become a model for doing likewise for guys like SRV.

Hmm, "modest estate" by whose reckoning? Mike Jeffrey reported it as only $20,000, but honesty and accuracy were hardly his most notable features. Even by his account, that sum does not seem to include assets such as the Electric Ladyland studio.

I know a little about business values at that time and the structure of entertainment contracts of the day. Were talking a few million at best, probably about half of the $7m you suggest.

Sure, and this brings up a nub of what I was saying; was the increase in value extraordinary, and was it a result of holding back some of the IP forming part of the estate (i.e. neither selling it nor licensing it)?

I am sceptical of this on several grounds:

- A fair amount of the music was in fact released, and has been earning (for the estate) for much of the 40+ years since Jimi's death. If it hadn't, I wouldn't have been saving my pocket money to buy it in the late '70s.

- To the extent that some of the material was not released, the reasons cited by the managers of the estate have frequently been quality and completeness related, rather than any expectation that the price was too low and could be expected to rise.

- The real initial value of the estate is debatable, but most credible sources put it at "multimillion" - probably low millions of real value at the time of his death. A sum of $7.5 million in 1970 would be expected to appreciate to $80 million by 2002 if simply invested in US GDP (which is what you should expect the long-term stock market value to parallel). That represents a very pedestrian rate of accumulation; a sum of $4 million accumulating to $80 million would be more like the desired expectation for a risky investment such as a popular music legacy immediately following an artist's death.

So, is that really an example of "holding back IP assets giving unusually good returns"? It's not impossible, but I remain sceptical and, even if it is, it's hardly a regular, run-of-the-mill case. It hardly proves that holding IP for accumulating value due to pent-up demand is in general a good business strategy, and I remain convinced that it's actually, in general, a very bad one.

Yes, the net increase was extraordinary. Even though the increase to $80m by 2002 is on pace with other investments from 1970, the fact is most of that gain was accumulated in just 13 years. Most of the major posthumous releases from his estate came after 1989, and the question of the value & ownership of his image didn't get decided until @2000. IOW, his estate kept pace after giving the rest of the investments in the world a 19 year head start.

And part of the reason for this is that the estate was tied up in litigation. It wasn't just about who got to control the estate, but also about what actually composed the estate. When the suit was filed in Washington, there was a genuine question of conflicting state laws (mainly WA vs NY) about controlling his image, etc. Companies don't like making contracts when they don't know who they're going to have to pay, and how much.
 

Yes, the net increase was extraordinary. Even though the increase to $80m by 2002 is on pace with other investments from 1970, the fact is most of that gain was accumulated in just 13 years. Most of the major posthumous releases from his estate came after 1989, and the question of the value & ownership of his image didn't get decided until @2000. IOW, his estate kept pace after giving the rest of the investments in the world a 19 year head start.

And part of the reason for this is that the estate was tied up in litigation. It wasn't just about who got to control the estate, but also about what actually composed the estate. When the suit was filed in Washington, there was a genuine question of conflicting state laws (mainly WA vs NY) about controlling his image, etc. Companies don't like making contracts when they don't know who they're going to have to pay, and how much.
Are you saying that the IP sat dormant and effectively did nothing for 19 years and then caught up from a standing start? That might be the case, but isn't that arguing against the idea that keeping the IP idle improved the value of the estate?

Either way, we are talking about a guy who is now generally regarded as the greatest popular music guitarist of all time - harldy the cookie cutter case of an IP asset.

Oh, and "exceeding the benchmark" is not especially good - it's a requirement to be even worth considering. The point of "opportunity cost" is that the "benchmark" is what any schmuck could get with a simple investment in a tracker fund. If you can't do better than that with a valuable piece of IP you shouldn't have been entrusted with it! ;)
 

Are you saying that the IP sat dormant and effectively did nothing for 19 years and then caught up from a standing start? That might be the case, but isn't that arguing against the idea that keeping the IP idle improved the value of the estate?
Only a portion of his IP sat dormant. The albums released during his lifetime stayed on the market and did steady but non-extraordinary sales. There were some posthumous releases, but post-1989, everything changed.

The continued steady sales of his lifetime releases allowed the estate to get MUCH better royalty agreements for the posthumously released recordings than Jimi had in his lifetime. The lawsuit ensured that the estate gained & retained control of Jimi's image. By that time, artists such as Michael Jackson, Madonna, NKOTB and other mega acts of the 1980s and early 1990s had opened up new revenue streams, many with royalty structures more advantageous to the artists than the underlying recording contracts.

Together, this combined to give the Hendrix estate more revenue than they would have gotten under contracts typical of the 1970s. Had the IP been active at that time, the size of the royalties and the contract lengths would have meant the record companies would have gotten that money.
 

Only a portion of his IP sat dormant. The albums released during his lifetime stayed on the market and did steady but non-extraordinary sales. There were some posthumous releases, but post-1989, everything changed.

The continued steady sales of his lifetime releases allowed the estate to get MUCH better royalty agreements for the posthumously released recordings than Jimi had in his lifetime. The lawsuit ensured that the estate gained & retained control of Jimi's image. By that time, artists such as Michael Jackson, Madonna, NKOTB and other mega acts of the 1980s and early 1990s had opened up new revenue streams, many with royalty structures more advantageous to the artists than the underlying recording contracts.

Together, this combined to give the Hendrix estate more revenue than they would have gotten under contracts typical of the 1970s. Had the IP been active at that time, the size of the royalties and the contract lengths would have meant the record companies would have gotten that money.
Yes, I assumed that the increasing leverage of power of celebrity artists over the record companies had helped, but I still come back to the question "is this a normal or default situation with IP assets?"

Had you been sat, in late 1970, with a significant collection of popular music IP even with no legal questions and entanglements, would holding onto that IP with no income from it have been a sensible decision to take. Sure, with the benefit of hindsight, we can see that the increased proportion of recorded music and related merchandising income going to the artist it might have been later considered an inspired idea. But was that clear at the time? If someone is in a similar position today, can they confidently bet on a similar development increasing the value of their portfolio in, say, 20 years' time?

One swallow does not make a summer. Especially if, when examined closely, the swallow just might be a house martin in any case...
 

Had you been sat, in late 1970, with a significant collection of popular music IP even with no legal questions and entanglements, would holding onto that IP with no income from it have been a sensible decision to take.

The Average Joe probably would have tried to leverage the IP immediately.

The Savvy Steve would not have, since some of the trends that came to fruition in the late 1980s were the results of struggles already underway. A "wait and see" approach for even only about 7 years would have been rewarded with the passage of key legislation and the decisions of some court cases that were already in the courts.

And Steve's wait is only actually 7 years longer than Joe's if Joe was an utter idiot who signed a big contract without legal representation right after recieving the IP free & clear. How long does it take to find a good contracts lawyer? How about one who knows entertainment contracts in particular?

How long will it take for either to review the kinds of contracts being offered in the 1970s? Those things are labyrinthine and full of terms of art.

Does Joe take the first offer? Because there WILL be more than one.

IOW, if Joe is only reasonably prudent, it will take him time to simply sort things out enough to sign what is in front of him. That gets us to, say, 1972.

And by that time, the case for wait & see gets stronger if Joe had hired an entertainment lawyer to review those contracts, since key legislation was already in heavy discussion, and that lawyer would have known it.
 
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The Average Joe probably would have tried to leverage the IP immediately.

The Savvy Steve would not have, since some of the trends that came to fruition in the late 1980s were the results of struggles already underway. A "wait and see" approach for even only about 7 years would have been rewarded with the passage of key legislation and the decisions of some court cases that were already in the courts.

And Steve's wait is only actually 7 years longer than Joe's if Joe was an utter idiot who signed a big contract without legal representation right after recieving the IP free & clear. How long does it take to find a good contracts lawyer? How about one who knows entertainment contracts in particular?

How long will it take for either to review the kinds of contracts being offered in the 1970s? Those things are labyrinthine and full of terms of art.

Does Joe take the first offer? Because there WILL be more than one.

IOW, if Joe is only reasonably prudent, it will take him time to simply sort things out enough to sign what is in front of him. That gets us to, say, 1972.

And by that time, the case for wait & see gets stronger if Joe had hired an entertainment lawyer to review those contracts, since key legislation was already in heavy discussion, and that lawyer would have known it.
OK, so let's say that there were reasons to believe that popular music IP would become easier to leverage soon; that would explain the market-normal rate of appreciation in the later period, at least (when the market knows something will happen, they allow for it in pricing and value increase nornmalises - in theory).

Does a similar scenario apply now? Are there reasons to believe that roleplaying IP will become easier and more lucrative to exploit in a few years' time? I don't know of any, but it's an honest question.
 

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