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Thursday, April 24, 2014

What's Up With Wizards of the Coast?

Yehuda Berlinger
Last Friday Yehuda Berlinger of PurplePawn.com released the 2013 Global Game Industry Survey to the public. When this survey first went live it brought on the usual chorus of cheers from certain sections of the hobby as Wizards of the Coast did not lead the market for role playing games. This seemed to confirm the ICv2 surveys that have continued to show a decline in Wizards' market share (see The Continued Sales Decline of Dungeons and Dragons and Other Stories of Note for more). The problem with using these surveys to asses the health of Wizards of the Coast is that neither of them have direct, internal numbers for the company. So what are they using to evaluate it in relation to its competitors?

Both ICv2 and Yehuda Berlinger are inferring a lot about Wizards through retailer communications. Essentially what that means is they talk to a retailer about what's selling best in their store and use that to determine the health of a product line such as Pathfinder or Dungeons and Dragons. Yet to definitively speak on either Paizo or Wizards of the Coast you would have to see their internal numbers. That would allow you to see how much they're making from on-line sales and other gaming ephemera which is omitted from both surveys. Without that additional data what we're observing provides us with such a small piece of the overall picture that we're likely to see a distorted vision of reality. That said there are things we can tell from the actions that Wizards of the Coast is making in the lead up to this summer's Fifth Edition launch. 

Anecdotal evidence is continuing to mount towards the conclusion that online sales are working very well for Wizards of the Coast. The Dungeons and Dragons Classics website has an ever growing catalog of products which suggests that it is doing well - after all Wizards wouldn't go through the effort if it wasn't turning a profit. Further evidence of the success of this platform came earlier this year when the newest Encounters program, Dreams of the Red Wizards: Scourge of the Sword Coast, was only a digital release. The three previous encounters programs (Ghosts of Dragonspear Castle, Murder in Balder's Gate, and Legacy of the Crystal Shard) all had physical products released into the market. 

Admittedly changing the encounters program over to a digital exclusive enterprise could be an indicator that Wizards of the Coast's sales are in a nose dive where they're trying to cut overhead by any means at their disposal. One of the major indicators that this isn't the case is that you're not seeing people jumping ship left and right, nor are you seeing massive layoffs. Instead you're seeing the President of Operations, Greg Leeds, putting forth an aggressive agenda (see Greg Leeds, C.E.O. of Wizards of the Coast, On the State of Everything for more) and the company advertising in unfamiliar areas (see News for the Sundering: Chapter 2 for more) to bring in new players. These moves don't reek of desperation nor do the 2014 Q1 management remarks from Hasbro indicate that the Dungeons and Dragons brand is in any immediate danger of being shuttered; though it was one of four gaming brands that did not beat last year's numbers.

So what do you think? Is Wizards in a death spiral, or is everything getting blown out of proportion?

19 comments:

  1. A major new release coming down the line doesn't scream death spiral to me.

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    1. Me too, but there's this vocal group of posters on various forums I've visited in recent weeks who seem to be going all lord of the flies over the subject. Lots of shirtless dancing around the fire, some minor cannibalism . . .

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  2. An interesting take. While I wouldn't call it a death spiral, I would say that it appears that the DnD brand isn't as strong as it once was. It's important to note that DnD is only a fraction of WotC's bottom line, and is being far outclassed in terms of resources-given and profits-made by other WotC products, particularly M:tG.

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    1. Magic the Gathering is actually one of the top two performers for all of Hasbro - which seems odd to say but I've seen it in too many legitimate sources to question it.

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  3. 4e is dead, 5e is coming. Between the two is barren earth.

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    1. Not completely barren, but certainly nothing to crow about.

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  4. The D&D brand isn't weak. It's been the management of it that's been weak. Players will gravitate towards a clone (Pathfinder) that has more in common with D&D's perceived brand, than the actual product (4e) that doesn't. 5e should change things, unless players' experience with it isn't better than Pathfinder or any OSR product. If the game doesn't stand on its own merits, look for WOTC to push Encounters big time as a sort-of RPG-like tournament game.

    The D&D brand will never go away though. WOTC will use it to sell other types of products. In the worse case, they'd license the name and IP to another company for them to produce an RPG.

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    1. " 5e should change things, unless players' experience with it isn't better than Pathfinder or any OSR product."

      From all the con reports I've read and from the countless conversations I've had over it in recent months it seems to be doing really well. Hard to say for sure though until it actually launches.

      "look for WOTC to push Encounters big time as a sort-of RPG-like tournament game."

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  5. I have to agree with what others before me have said. The D&D brand has weakened somewhat over the years, be it from mismanagement, Pathfinder, whatever. But death spiral? Not a chance. The brand is still valuable as all get out, and I think the actions of the powers that be at Wizards know this, and are trying their best to keep the brand relevant and strong.

    I look at it this way: You've written a really good fantasy movie script, based upon D&D/Pathfinder games. Lets say both Wizards and Paizo think you're awesome and want to turn your script into an actual Hollywood movie, so long as they get to put their brand name on it. Who would you choose?

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    1. D&D. The name recognition alone would help you tremendously.

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    2. Besides, the last movie with the Pathfinder name blew.

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    3. Exactly. There is so much potential there, and Wizards has to know this. I think what they need to do is get 2 or 3 of their best, most creative designers, couple them with a good Hollywood writer, and just make a totally kick ass movie. Not the schlock that's been done in the past with the D&D name. Will this happen? Probably not, but one can dream.

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    4. If the rumors about Disney being interested in buying D&D away from Hasbro ever come true then you know we'd see something great.

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  6. Out of the many things I think as others who have already written. Also in favor of the WotC we must also take into account the success it is having the boardgame "Lords of Waterdeep." Also it helps to keep in vogue the brand D&D (and consequently also FR). Although I am one of the first critics of the 4th ed. I think things are not going so bad for them and if by chance the 5th ed. will be a good work you will see that they will recover a lot of the market lost in the meantime. :)

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    1. "you will see that they will recover a lot of the market lost in the meantime."

      I think you're right Giuseppe.

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    2. If the playtest is any indication, I think Wizards are going to take back a big chunk of their lost market, if not take back their top spot from Pathfinder. Every single freaking thing I've seen from them has been pretty damn good, and the appeal across the hobby is going to be very strong. It's going to be a good fight to see who ends up on top.

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    3. Reminds me a bit of the Whitewolf vs. TSR/Wizards fight that went on during the 90s

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  7. I've spent $100 on D&D in the last five years. I bought a $30 book and a $70 year-long subscription to D&D Insider -- if you consider something like that any indication of the market.

    --Dither

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    1. I actually find the subscription a good indicator because it's yet another hidden resource Wizards can draw on.

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