Biz: Hasbro/WOTC Q4 Earnings Announced

And what an earnings call it was. Despite 2020 being a plague year, despite there being no conventions, no tournaments, game stores shut down for most of the year as “non-essential” and hamstrung with informal quarantines and mandatory masking…

… D&D had+33% year over year growth in 2020.

This is amazing considering the circumstances. Prof. DM (who is absolutely splendid btw – check out his YT channel) sat in on the Q4 earnings report (a chore, even on the best of days, for the most interesting of companies) and got an inkling of Hasbro and (especially) WOTC’s business strategy. Prof. DM was looking for evidence that WOTC was forecasting a 6E release (answer: no; more on that in a sec) but instead learned of the significant increase in sales. And that’s good news for the industry: D&D is the flagship brand for the TTRP industry, and has been since it was released. As Prof DM says, “the health of 5E is the health of the industry,” and if he’s correct, then the industry is doing very well indeed.

So what did Prof DM come away from the earnings call with? Three things:

1. There won’t be any 6E anytime soon. WOTC has released a ton of stuff for 5E – Tasha’s, Von Richten’s – and has even more in the hopper, not the least of which is the D&D movie and apparently a D&D netflix series, Plus they’re bringing back the Krynn setting (opening the path for more Dragonlance stuff, which if you remember they made peace with last year), and have said previously that they didn’t expect to release a new ruleset for at least ten years, which here would be 2024. Lastly, and maybe even most importantly, no one is asking for it. The ruleset is “brilliantly modular” and it’s easy to omit portions that don’t agree with a groups playing philosophy. WOTC isn’t going to punch out a sixth edition because they are making bank and don’t have to.
   
2. Online play is driving sales. The growth that Hasbro is posting can be explained in no other manner. Face to face is best, but Covid has forced a lot of people to get their game online… and it’s driving a lot of people into games they might not have otherwise have access to. The VTT industry has risen to the occasion, accommodating the influx of players, but they still need rulebooks – every new player is going to need his own copy of the PH. After Covid is over, there will still be a sizable group of players that will continue to play online.
   
3. Conventions are in a lot of trouble. Probably overstated, but from the POV of support for D&D at conventions, WOTC has got to be thinking why bother at this point. WOTC opted away from having a significant presence at GenCon, due to various interpersonal things, and instead put their promotions eggs in the Origins basket. But large-scale convention support is expensive and, therefore, deployed when needed. And 2020 (remember: no conventions!) has shown pretty definitively that current revenue streams do not demand expensive, in person marketing and promotions. As we all look forward to a return to in-person games, including conventions, the likelihood we will see WOTC have a significant corporate presence there is slim.