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All day I've been mulling over yesterday's sudden and unexpected announcement by Wizards of the Coast that they were no longer going to offer ANY of their products for sale in PDF format, and that they were immediately (basically) withdrawing the rights to do so from every existing PDF retailer with whom they had been working.

I have a lot of VERY strong thoughts and reactions on the matter. I have a history with WotC ... and a history with PDF sales. I have a (somewhat outdated) understanding of how things work internally at WotC ... and I have a (limited to my personal experience) understanding of how PDF publishers function in the market. I can think of many reasons WHY WotC might be doing this (aside from their stated reasons) ... and I can think of many ways HOW it will affect the broader marketplace ... but I make NO claim to know ALL of any aspect.

So I'll stay away, for the moment at least, from criticizing the specifics of this business decision. I won't make any bones about the fact that I am unhappy with it ... but I want to instead focus on a thought that I've had frequently over the past year or two. The thought is this: Wizards of the Coast is NO LONGER the "industry leader" in the hobby games business.

Let me be clear, they ARE still the most successful company in that business, probably by an order of magnitude. But they are not a LEADER anymore. They are not LEADING anyone anywhere, unless it's the shareholders of Hasbro being led to be happier with the overall bottom line.

I don't want this to come across as a "my time vs. the new guys' time" or, worse, a "3E vs. 4E" issue (this has absolutely NOTHING to do with the R&D staff, whose job is to create games ... not business strategy). Although I was at Wizards during the time I'm going to cite as their heyday ... I had little or nothing to do with the business team that was responsible for the activities I'm going to laud. I have no personal stake in comparing and contrasting the brand strategy of the early 2000s to that of today.

When WotC bought TSR in 1997, one of the first things Peter Adkison impressed upon us all was that he believed Wizards could be BOTH a supremely successful company AND a leader in the hobby games industry. That WotC could make a strong and growing profit and AT THE SAME TIME help grow the other companies and teach them how to make more money for themselves. He saw WotC as an evangelist for gaming as a hobby and leisure-time entertainment ... and was HAPPY when our actions helped other companies to grow stronger. He was close friends with the CEOs (not to mentions designers, artists, editors, and general staff) of MANY other hobby game companies and was HAPPY to help them both professionally and personally. Peter was, and remains, and Industry Leader ... and, as a result, under his management, WotC was a leader, too.

During the development of and early years of release for 3E D&D, Ryan Dancy ran the Brand Team. Like Peter, he was a longtime gamer with strong connections to other gaming companies and their staffs. Under his guidance, WotC was still an Industry Leader ... indeed, he did more LEADING than just about anyone else. He had a hard row to hoe to get internal buy-off on some of his ideas ... but an even HARDER time getting people to understand why it was important NOT to guard the lessons learned as "corporate advantages," but rather to SHARE them so other companies could grow stronger, too. He based his business plans on the idea that any growth in the industry would, sooner or later (and mostly SOONER), be reflected in growth for the #1 company in the category. He and his Brand Team taught the principles and shared many details of the work they'd done ... taught them not JUST to other companies, but to ANYONE who wanted to listen at a seminar. They TAUGHT the existing industry and a new generation of designers and publishers HOW to look at their businesses AS businesses and not "hobby businesses."

Things stopped progressing in that line relatively quickly after Ryan left. Mary Kirchoff never really believed in the business principles that Ryan and his staff used to guide the brand. She didn't actively overturn them all ... and having people on her staff like Charles Ryan certainly helped to hold the ground as far as concern for the broader industry went. But WotC stopped being a strong LEADER sometime in that phase. The company was willing to work with selected partners, but was no longer committed to being an evangelist for the hobby OR the business. The buyout by Hasbro probably has a lot to do with this change ... but it's not by any means the sole contributing factor. The need to maximize shareholder gain and show INCREASING profitability year after year became the main focus for more or less the entire company.

I only know the current D&D Brand Team in passing. I've never actually worked with most of them ... in fact, I'm not even sure I've ever sat down for one-on-one conversations with them all. But I CAN say this ... the way their running the business shows NO real concern for the broader industry, and laser-like focus on maximizing WotC's profits. The "industry" matters only in the Wizards is the biggest participant in it ... and they want to get bigger. To that end, they seem to have realized that they can't really GROW any bigger among the current audience ... so they're taking square aim at bigger one. Unfortunately, that means turning their backs on the portion of the existing game audience that isn't committed to following D&D wherever it goes, no matter what.

Wizards is NOT an Industry Leader anymore. They are the 800 lb. gorilla that everyone has to steer clear of. They are the unstoppable juggernaut that smaller companies may trail behind, hoping to get scraps and cast offs. They are the purveyors of the most popular hobby game in the world. But they aren't LEADING anyone. Not anymore.

The funny thing is that they still seem to THINK they are. They mistake "market share" for "popularity." They mistake "influence" for "leadership." And they seem to believe that as long as they remain out front, the rest of the industry will follow them.

Maybe that last one is true. Only time will tell. But I think that the recent trend in business strategy will result in WotC making itself more or less irrelevant to the hobby games industry. They will RULE the "D&D industry" ... but their influence over other games, gamers, and game companies will wane until such time as they start ACTING like leaders again.



( 24 comments — Leave a comment )
Apr. 8th, 2009 03:10 am (UTC)
That was really well put, Stan!.
Apr. 8th, 2009 06:44 am (UTC)
Thanks. Given that I often turn to you for well-reasoned and insightful perspective on such matters, that assessment makes my evening. :^)
Apr. 8th, 2009 03:34 am (UTC)
I think you're on to something there. I believe innovation is the key to leadership, but it only counts if the benefits of that innovation can be shared. Ryan innovated. The group Hasbro eventually sells D&D to are likely to be innovators as well. I'll bet a nickle this happens before 5th edition.
Apr. 8th, 2009 06:46 am (UTC)
We'll see. I don't think Hasbro is likely to sell D&D at all ... as a BRAND it's too valuable. But there may yet come a day when they license out the right to make roleplaying games based on D&D (and that's NOT a shot at the current rules set ... it's a shot in how Hasbro as a whole views "Dungeons & Dragons" as an Intellectual Property).
Apr. 8th, 2009 03:45 am (UTC)
I would humbly put forth the Paizo seems to have stepped into the position of industry leader. their response to the various corporate slaps in the afece from WOTC? Innovate and get even better.

That's the way you do it!
Apr. 8th, 2009 06:50 am (UTC)
I love Paizo. I have lots of very dear friends there, and I believe what they're doing with Pathfinder is TERRIFIC. But they haven't proven to me yet that they are taking up the mantle of LEADERSHIP. They may be in the midst of doing just that ... but it'll take time to prove it.

Right now they're making a bunch of very savvy business maneuvers and showing that they understand that customer service is important. I have HOPES that Paizo may become the next industry leader ... but don't be too hasty to declare it a fait accompli.
Apr. 8th, 2009 02:06 pm (UTC)
Indeed, let me rephrase that to "moving intot he leadership position."

Sorry my precision is down due to packing up my life for a cross country move from New Orleans to Cincinnati. Making me roll on the random insanity chart (from the 1e DMG) on a daily basis.
Apr. 8th, 2009 04:22 am (UTC)
TSR, Inc. was once an industry leader too. Treating your customers with disdain kills you.

Apr. 8th, 2009 06:53 am (UTC)
Yup. The comparisons with current WotC to early 1990s TSR is ... well ... quite frankly it's a bit scary. I sincerely hope that it's more "entertaining cynicism" than "accurate description" ... and I'm certainly WILLING to let WotC prove through their actions that I've misjudged them.
Apr. 8th, 2009 10:39 am (UTC)
I do not mean to entertain.
Apr. 8th, 2009 05:14 am (UTC)
In a phrase; leadership is moral standing.
Apr. 8th, 2009 06:55 am (UTC)
I'm not sure that's necessarily true. GOOD leadership has a strong component of moral standing ... but history is replete with examples of people who were CERTAINLY leaders yet lacked much in the way of moral fiber.

Still, that seems like debate for philosophy blog rather than my little soap box. ;^)
Apr. 8th, 2009 07:47 am (UTC)
Point :)
Greywulf []
Apr. 8th, 2009 09:45 am (UTC)
Well said that Stan.
Apr. 8th, 2009 02:56 pm (UTC)
Thank you. :^)
Apr. 8th, 2009 11:35 am (UTC)
How will this manifest itself?
Great article but it leaves me with a couple of questions.

How will this manifest itself? I'm seeing Wizards publishing tons of sourcebooks, adventures, and accessories that are, in my opinion, pretty high quality products. I was worried at first that we'd see very little in the way of third party products for 4e because of the licensing, but I'm not sure I care - there's more 4e material than I could run in three years out right now and that's growing and growing.

I think they're going to saturate their own market in a year or so when I, as a huge fan of the game, simply have too many classes, powers, adventures, and worlds to keep up with. Why buy a PHB3 when I'm only likely to use 20% of the PHB2 by that point?

I think, as an industry insider, its important to see whether Wizards is leading the industry or just stomping through it - but as a customer of RPG products, I don't know that it matters too much.

Again, very interesting post.
Apr. 8th, 2009 01:40 pm (UTC)
Re: How will this manifest itself?
"I'm seeing Wizards publishing tons of sourcebooks, adventures, and accessories that are, in my opinion, pretty high quality products. I was worried at first that we'd see very little in the way of third party products for 4e because of the licensing, but I'm not sure I care - there's more 4e material than I could run in three years out right now and that's growing and growing."


We're not even a year into the 4E cycle, and we've already got a second Monster Manual coming, a second Player's Handbook released, and we're about to hit the second 'source' book--all of which are getting sequels. Yes, people will buy PH2, Martial Power 2, Monster Manual 3... but the bean-counters at WotC are going to hit the "I don't need to buy all this stuff" wall from gamers far earlier in 4E than they ever did in 2E.

Sure, the Complete Fighter's Handbook was released less than a year after the 2E Player's Handbook, but it bears remembering that:
-There was nearly a dozen years of AD&D that informed the material in that book.
-The "Complete" series was not exactly the shining moment of TSR's D&D years.

Worse, I'm already beginning to feel that we're not in the Complete years. We're talking Player's Option: Skills & Powers, or the twilight somewhere between those two eras. And it's not comforting.
Apr. 8th, 2009 03:05 pm (UTC)
Re: How will this manifest itself?
I think, as an industry insider, its important to see whether Wizards is leading the industry or just stomping through it - but as a customer of RPG products, I don't know that it matters too much.

I think you're right!

All of this really is sort of an industry insider coffee-house debate. The REAL question for most people centers COMPLETELY around how well WotC is satisfying their needs as consumers. And I think there IS a very real chance that they ARE saturating the market and run the terrifying risk of driving their customers AWAY through the sheer VOLUME of material produced. (Much like TSR did in the late 80s and early 90s.)

I think a lot of this is coming from a mistaken perspective that any dollar spent on another game is a dollar NOT spent on D&D ... and that WotC should try to capture EVERY dollar that gamers have to spend. If the average RPG gamer is willing to spend $500 a year on gaming products then, by gum, they should spend ALL of those dollars on D&D.

That's not practical and, more importantly, it's not sustainable. As you point out, no one can USE that much material. And once the customers begin to realize they can't use everything they're buying, and they begin to LOSE the notion that have to buy EVERY product for D&D ... then they start to become MUCH more circumspect. It's no longer a question of which products NOT to buy ... it's becomes a matter of "which products do I actually NEED?" ... and then the REMAINDER of the money gets spent of OTHER games and companies.
Apr. 8th, 2009 08:02 pm (UTC)
In general, I think I agree with most of what you had to say. A lot of your points surround giving words and phrases such as “industry leader” their proper meaning and context. Now, one will probably grant that there are not a few people out there who would rather that not happen. After all, once people start thinking about the real meanings of things like that, they might start to draw some fairly obvious conclusions.

First of all, I completely agree with you that there is certainly a difference between being an “industry leader” and being at the “top” of an industry. Having the largest market share (or being seen as having the largest market share) does not automatically make one an “industry leader”. In my own world, there are engineering companies that are rightly regarded as being extremely influencial, leaders if you will, in a certain type of engineering or design (and each of those tends to make up an “industry” in and of themselves). Those companies are not the largest or the most profitable (in fact, more often than not, they are not). But they are the companies that have been willing to send representatives to conventions and conferences, show what they do, and invite other companies to learn and share what they do.

I do not have your “insider’s perspective”, but I do not actually think such is necessary. Virtually anyone who is a regular at a game store, anyone who is a regular at gaming conventions both small and large, AND is willing to pay attention to what all is being published and promoted, can gain more than sufficient information in their hands to draw some conclusions on this subject. Numbers in a budget report or shareholders statement can be juggled, and propaganda can be published as widely as any company can reach (on the Internet or otherwise); what happens at each local store or convention is not so easily hidden away from observation.

There was definitely a time when Wizards of the Coast was an “industry leader”. But, as you said, they did not have that status because they were the most profitable company in the industry, or the largest, or the most talented. It was brought about because Wizards of the Coast actually put themselves forward as being a leader in the fashion that I described above with engineering companies. They offered things they showed would work or could be done well, and offered other companies the chance to follow their lead on those things. Maybe some of those companies just followed with glittering dollar signs in their eyes, but my experiences of the early 2000’s suggest that there were at least a few other companies that were following Wizards of the Coast because Wizards WAS actually leading.

Even those companies that did not actually adopt, say, the d20 or OGL approach to gaming, frequently did adopt some aspect of what Wizards did then. This is where watching what happens in the local game store becomes important as a matter of measuring this subject. For instance, after the release of 3rd Edition D&D, the concept of “core rulebooks” versus “supplements” and the distinction between them became more significant. This was a distinguishable trend even for companies whose products, otherwise, had little else in common with what Wizards of the Coast was doing. Another example was a general trend towards regarding three books as “core rulebooks”: a book for the game and its players, a book for the GM, and a third book that would either contain monsters or world (whichever was more important to the game). Seeing this trend in the past five to ten years is important because that pattern of publication WAS already around in earlier decades. TSR and WotC have had the Players Handbook/Dungeon Master’s Guide/Monster Manual publication pattern since round about the time of the dinosaurs ;-D (yes, for those who need to know, I am older than D&D; I just enjoy poking the people ten years older than me). The critical difference was not in the innovation itself, but in the greater willingness of other companies in an industry to follow the lead of Wizards of the Coast on that point.
Apr. 8th, 2009 08:03 pm (UTC)
I do not see the same patterns developing today. Just as with 3rd edition, 4th Edition Dungeons & Dragons introduced some very different approaches to gaming. I still have yet to read a convincing argument that it is a roleplaying game (I do not see myself as roleplaying the shoe when I play a game of Monopoly), but that is beside the point here. It is SAID to be a roleplaying game and is being published as a Dungeon & Dragons game by Wizards of the Coast. And it has a certain innovation to the game. One might debate how much of that innovation had already been pioneered by predecessor games but, contrary to some peoples’ beliefs, I actually do not put much weight in that argument. It is virtually impossible to create something completely new in today’s world, something that does not have at least SOME foundation in a predecessor or predecessors. I do not see that as an adequate argument (actually, to be quite honest, I find it a bit lazy, ignorant and, coming from certain people out there, hypocritical).

But, getting back to my point, one can take a look around the game stores and spring conventions and, at this point, see a rather interesting contrast with 2000 to 2001. We are two months shy of a year since the 4th Edition Player’s Handbook was released and there is little visible trend following the innovations, philosophies, and/or patterns that 4th Edition introduced. Now, I know the obvious counter-argument: that it theoretically takes time to write or develop or retool. And that theory may be sound…to an extent. However, that “limitation” did not seem overly impeding in 2000 to 2001 in practice. The somewhat less obvious counter-argument, that the industry is much different in 2009 than it was in 2001 is largely limited now (as it was then) to the established industry. When Wizards of the Coast offered to lead the industry in 2000, a fair number of new “companies” suddenly appeared to follow, ones that did not exist prior to that point. Sure, many of those were the gaming industries equivalent of the Dot Com company, but that is beside the point since we are talking about patterns and trends that existed only within finite intervals of time rather than looking at the overall history of any one company. In 2009, one sees a few of them emerging to try and follow Wizards of the Coast…but not many. In fact, even the most casual perusal of the game store shelves (whether online or physical) suggests a lot of companies are merely continuing in the patterns they had already established and demonstrated to themselves to be reasonable successful. Even new entries into the industry in the past year or two seem to be following other patterns (and other gaming companies) as much or more than they might be following the current “leadership” of Wizards of the Coast.

As an alternative evaluation of this point, I pulled up the list of panels and industry guests for spring gaming conventions (and not just RPG games, mind you) this year. If I had done that in 2001 to 2002, I would have found both to be packed with people from Wizards of the Coast and/or people who I expect were going to be talking about the directions that Wizards of the Coast was leading the industry in. Today, I find a host of panels and industry guests who have their own paths, innovations and directions to introduce to the attendees. Though I could be judging a book too much by its cover, there is nothing in the brief descriptions of those panels, or the brief biographies of those guests, that suggests they are going to be talking all that much about the CURRENT paths, innovations and directions of Wizards of the Coast. That is pretty compelling evidence of the realities of today.
Apr. 8th, 2009 08:03 pm (UTC)
So, in conclusion, I agree with Stan!’s conclusion that Wizards of the Coast is clearly and demonstrateably not the “industry leader” in the gaming and game publishing industry. The most common claims made to the contrary (at least that I have read) continue cite profitability, which history has shown to have little or nothing to do with being an “industry leader” in virtually any industry. Otherwise, the next most common claims cling to the nostalgia of days gone by; and claim that nothing could have possibly changed enough to change the industry while at the same time defending the new innovations and directions of Wizards of the Coast as being justified by the changes in the industry (and I kid you not; I have read arguments that were just that circular).
Apr. 9th, 2009 08:36 am (UTC)

Some interesting food for thought.

I think what you are struggling towards with your editorial on “leadership” is more about business as an ecosystem and the various ways that a company can exist within that conceptual framework. The types of relationships are symbiotic and are defined as follows:

1) Mutualistic: Both parties benefit.
2) Commensalistic: One party benefits but the other is neither significantly harmed or benefited from the relationship.
3) Parasitic: One benefits, the other is harmed or destroyed.

I think that the era of Ryan Dancy was definitely a time when WotC was trying to practice the first on the list. After he left the company WotC drifted into the second and now we are seeing some behavior that definitely falls into the 3rd.

While the definition of “industry leader” can be debated, there is no debate that WotC’s behavior of late is far more aggressive and falls somewhere between commensalism and parasitism.

My two coppers.

Apr. 9th, 2009 04:53 pm (UTC)
I think that's a pretty fair assessment. And, I admit, that the notion of "industry leadership" is fairly subjective ... and not always considered important in business circles. I just happen to believe that it IS ... and I know that WotC USED to think it was.

Maybe I AM just a grumpy old ex-employee after all. ;^)
Apr. 9th, 2009 09:09 pm (UTC)
Grumpy, nah.

I think framing the debate is very important. As someone on the outside of WotC and only seeing the actions of the company and not the decisions leading to those actions its hard to say what is really going on.

I could make a pretty safe bet that at the executive level the thinking is leadership = market share. And if market share is the goal then being a sustainable, mutualistic member of the gaming ecosystem is not even on the radar.

As for another company rising to challenge them? Unless one of the 2nd tier companies starts making Pokemon money WotC is always going to be the lumbering beast in the market. Paizo can run all the RPG Superstar competitions they want it will not significantly dent WotC's market share. Something catastrophic would have to happen to topple WotC and that in all likelihood would destroy all the other companies right along with it.

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