D&D 4E Hasbro, Greyhawk, and 4E speculation

[drothgery]

The idea of a "self image problem" is probably based in the idea that we honestly have little reliable information on the size of our hobby, and very little up-to-date reliable information on the size of gaming.

It's also because the biggest companies in the industry have dozens of employees (not hundreds or thousands) and because even the biggest names in the industry have to start their own company (or possibly move into management at WotC/Hasbro) and hope they can do as well as Monte's managed with Mahallavoc if they want to make something resmbling a respectable income.

I mean, I work for a small biotech supply company. Small meaning we do about $100 million in business a year, and have about 500 employees.

 

[Vigilance]

It's also because the biggest companies in the industry have dozens of employees (not hundreds or thousands) and because even the biggest names in the industry have to start their own company (or possibly move into management at WotC/Hasbro) and hope they can do as well as Monte's managed with Mahallavoc if they want to make something resmbling a respectable income.

This is comparing apples and oranges.

When you talk about people starting their own company and hoping to make a respectable income, you're talking about 3rd party publishing.

WOTC is on such a different scale than even the largest 3rd party company its effectively a seperate industry altogether.

This is the problem with us outside of WOTC trying to examine the industry. 3rd party publishing is a small business. D&D is a huge multination conglomerate worth 10s if not 100s of millions of dollars and people too often confuse the two.

Chuck

 

[GVDammerung]

Companies generally acquire each other, speaking very loosely here, for X times Annual Revenue. If Wizards was purchased for $350,000,000, and Hasbro _really_ wanted it maybe they paid 10 times annual revenue. That would have made Wizards worth $35,000,000 in 1999. If they paid only twice annual revenue, Wizards would have been worth $175,000,000 in 1999. Two times annual revenue would have been a deal for Hasbro, however, and it seems that the Wotc stockholders thought they were the ones getting a deal. So (discounting the high end as well), Hasbro probably paid between 3 times and 8 times annual revenue, setting Wizards worth at between approximately $116,000,000 (3x approx) and $44,000,000 (8x approx) in 1999 in terms of annual revenue.

Allowing that Wizards big success stories were Pokemon, Magic and D&D (all iterations), in approximately that order, in 1999 and, generously allowing that each made about the same amount of money, and further using the $116,000,000 dollar figure (3x annual revenue), D&D would have been worth $39 million dollars (approx.).

Allowing for growth with 3E to double D&D's value between now and then, it would presently be worth $80 million dollars. This figure is likely high, however, as the 3e bubble has come back closer to the ground. It is also high if any more that 3x annual revenue was paid.

Then, to Charles point that D&D is worth more than people imagine, I believe this likely true but it is a highly relative claim. Completely unscientifically, I'd place D&D (all iterations)annual revenue at around $55 to $60 million dollars (and I think I may be high by $10 million).

Now, if you are a buyer, you are going to pay X times annual revenue, as well. D&D could then be worth $60 million dollars in annual revenue but be worth several times this at least in terms of any purchase price. I'd venture a sale price of $175,000,000 would get the job done on annual sales of $49 million dollars.

Since I'm no good with math, and am working from publically available numbers, take all this with a grain of salt. Suffice to say, Charles is right in one sense but less so in terms of absolute annual revenue, if these numbers are anywhere close to the bone.

 

[drothgery]

This is comparing apples and oranges.

When you talk about people starting their own company and hoping to make a respectable income, you're talking about 3rd party publishing.

WOTC is on such a different scale than even the largest 3rd party company its effectively a seperate industry altogether.

The thing is that even at WotC, their biggest-name game designers don't make what I'd call a respectable income (i.e. at least a bit above the median), or at least didn't when SKR and others were writing about it.

 

[Pramas]

The thing is that even at WotC, their biggest-name game designers don't make what I'd call a respectable income (i.e. at least a bit above the median), or at least didn't when SKR and others were writing about it.

WotC pays a good wage (and a great one by game industry standards). The benefits package is also quite nice.

 

[TheGM]

WotC is anything but silent right now. Releases every quarter, online chats, WotC delegates crawling out of the woodwork (no offense, Belen ) WotC is pretty active, not necessarily in the dormant torpor that signals a possible acquisition. If you want a dramatic comparison, look at the Star Wars RPG line. Now THAT one's got a lot of fans earnestly worried for that particular line's health. The Minis are doing great, but the RPG is... well, a little quiet.

And when you're a successful business trying to sell something this is exactly what you do. Inflate the numbers, make the line look vibrant, etc etc.

You're comparing a technical bankruptcy to a healthy company. No comparison.

 

[Monte At Home]

The thing is that even at WotC, their biggest-name game designers don't make what I'd call a respectable income (i.e. at least a bit above the median), or at least didn't when SKR and others were writing about it.

What's respectable/above the median in this context?

 

[qstor]

LG, as those who play it understand, and the RPGA as marketing arms of WotC. They also seem to be pretty effective. Why would WotC mess up a deal that is working pretty well by issuing a supplement of dubious appeal? The LG world is created by the players at present. An overarching campaign supplement would likely screw that up. I think that's a perfectly valid reason as to why WotC isn't touching Greyhawk.

buzzard

I'm a big fan of Living Greyhawk but it can't go on forever. I think when 4e comes out and Greyhawk is ditched as the *core* world, LG will end, IMHO. Whether or not Living Eberron replaces it remains to be seen, since the new RPGA campaigns are all the D&D campaign style games now with automatic level bumps.

As to a new Greyhawk campaign supplement, it ain't happening but its ALWAYS been my gut feeling and I've e-mailed Charles Ryan and wrote to WOTC marketing a number of times about this and mentioned it here on ENworld, that IMHO non business type opinion that a Greyhawk supplement with some rules material geared towards LG players would sell well. Well enough in my non business type opinion to make a profit on the book.

Mike

 

[Einan]

Where does all the fear and fright come from? What insecurity do gamers feel that lead us to envision that our hobby is going to all the sudden go from being a pretty active industry to absolute nihilism in the span of a day? Because every rumormongerer I hear on this board seems to have the sky is falling routine down pat and seems to revel in it. Is it because they think that if they do have special knowledge or insight it makes them a better person than the rest of us who are happily pursuing our hobby?

If WOTC and D&D crashed tomorrow, we'd still have all the books. We'd still have the talent and resources to create new materials and the internet makes it very easy to self-publish. At any rate, even if we didn't just continue playing the game without updates, something else would fill the void. It's the nature of the market: if there is a demand, there will be a supply.

Let's just stop the 4e/D&D is being sold/WOTC is going bankrupt/my cousin roger heard it from Gary Gygax who heard it from Santa Claus rumormongering and enjoy our hobby.

Einan

 

[drothgery]

What's respectable/above the median in this context?

Well, put it this way. It's not that difficult for me to make $70K/yr as a programmer. My understanding is that it's extremely difficult for anyone in the game industry to make half of that.