Shake Ups and Trimming at Wizards of the Coast

[kronovan]

I've been surfing around a few game sites this weekend and came across a number of threads and articles about recent announcements at Wizards of the Coast. It's been known for a while that WotC has been losing money; apparently quite a lot of it. In response they didn't renew the Star Wars gaming license and in the Fall they made a major executive change. Not all of the news is positive though, as some very popular franchises seem to have suffered the fate of the fiscal hatchet. Here's a summary of recent events.

October 27, 2010
New President of Marketing; Jerome Lalin.
He's a former executive at Turbine of all places. I guess it makes some sense that a former MMORPG developer executive would be a good fit at a table top RPG and card game manufacturer  -  well sort of.   Good news is that Lalin was a big force behind Dungeons & Dragons Online going free to play, so he seems to be marketing savvy.

November 3, 2010
Discontinues work on Heroscape.
I can't find a single press release on the WotC website, but this is what's listed in the Heroscape Wikipedia:

On November 3, 2010, Wizards of the Coast decided to drop the game in favor of focusing on their core games: Dungeons & Dragons and Magic: The Gathering. This caused an instant backlash in the Heroscape community, instigating petitions to Hasbro for them to take up the game again and causing others to vow to never buy from Wizards of the Coast again.

I'm not a Heroscape player, but from what I've read there were many fans not happy with the D&D direction WotC pushed the franchise in. Again, there doesn't seem to a WotC press release and a new Heroscape expansion was just published by them in January. The franchise was previously held by Milton Bradley -like WotC, another Hasbro wholly owned subsdiary- so maybe this means it's going back to it's former caretaker.

November 15, 2010
Drops the Magic the Gathering Player Rewards program
This one has upset many a MTG fan, especially those that run the official tournaments and have put in the effort to build affiliated relationships with local game stores. For those not familiar with it, the rewards program involved mailing out  a free card to registered participants at special events. Estimates are that the program could have cost WotC as much as $1 million per year. WotC has promised to pass the savings from the program on to LGS's, but many are skeptical. I'm admittedly haven't been a MTG player for years, but I know the community is still very strong in my city. I'm not sure of the wizdom of this from a fan or business perspective. I guess it depends on whether you believe a registered event at an affiliated store gets more in the door, or whether MTG fans will get together for events, official or not. It never hurts giving customer something free though.

All this is being done under WotC's desire to focus on it's 2 core products: D&D and MTG. It'll be interesting to see what happens with the once industry giant over the next few years.

[kadnod]

I think it's pretty difficult to make predictions about what's going on with WotC.  Nobody really knows how profitable it is and anytime something gets cancelled or changed or somebody gets fired, the message boards freak out over it.  This year, for example, nobody got fired, but several D&D books got cancelled or postponed.  What the hell does that mean?  Beats me. 

[Stoffa]

Thanks for the update. It's gotta be heartbreaking for folk who invest so much time and energy into a product (a lot of the time for the benefit of all) only to have it pulled on them.

[Turtle]

Big corporate gaming companies that don't do video games are having a tough time, just as much due to economy, but also today's culture.

There's a lot of overhead that comes from the big corporation, which eats into the narrow margins and narrow market for these games.

I don't see heroscape being discontinued as that bad a sign though, I get the feeling the game has run its course. It was a great miniature/board game though, I'm kinda sad I never got into it.

[Larraque]

November 15, 2010
Drops the Magic the Gathering Player Rewards program
This one has upset many a MTG fan, especially those that run the official tournaments and have put in the effort to build affiliated relationships with local game stores.

As a MTG player, I am unhappy that this program is ending. Since I've been playing tournament magic for the past seven years, I've loved getting these 'care packages' in the mail. They came with textless full-art cards that were ridiculously cool. You'd get two for every five tournaments you played in. And for every 20 they'd send you something even cooler, such as a foil textless wrath of god (then damnation, cryptic command, lightning bolt and then finally day of judgement). I probably have a hundred or so of these textless cards by now.

But from a business sense - it makes total sense. You're giving me free stuff at the cost of printing cards + postage. And every other player out there. They do three mailings a year. Now, I have no idea how many sets they send out, but if it costs them $50,000 to orchestrate a mailing (postage + cost of envelopes + employee salary to stuff the envelopes + cost of printing cards), I'd much rather they cut the 'free money' they mail me than someone over there have to lose their job.

[Larraque]

Since the MPR program ended, I've noticed turnout has dropped significantly at Friday Night Magic events here. We used to get 16-20 regularly, and now we're lucky to get 8 (barely enough to sanction). No idea if the people who stopped coming out have cut back because of this or other reasons (like: Drafting infect weekly sucks)

[kronovan]

Since the MPR program ended, I've noticed turnout has dropped significantly at Friday Night Magic events here. We used to get 16-20 regularly, and now we're lucky to get 8 (barely enough to sanction). No idea if the people who stopped coming out have cut back because of this or other reasons (like: Drafting infect weekly sucks)

Damn, sorry to hear that. I haven't asked the LGS owners that run Magic events in my area if there's been a difference, but I'll do that next time I talk with them. If MTG sales fall off for Wizards that's not good news at all, since it's their real bread 'n' butter.

[ericb]

November 15, 2010
Drops the Magic the Gathering Player Rewards program
This one has upset many a MTG fan, especially those that run the official tournaments and have put in the effort to build affiliated relationships with local game stores.

As a MTG player, I am unhappy that this program is ending. Since I've been playing tournament magic for the past seven years, I've loved getting these 'care packages' in the mail. They came with textless full-art cards that were ridiculously cool. You'd get two for every five tournaments you played in. And for every 20 they'd send you something even cooler, such as a foil textless wrath of god (then damnation, cryptic command, lightning bolt and then finally day of judgement). I probably have a hundred or so of these textless cards by now.

But from a business sense - it makes total sense. You're giving me free stuff at the cost of printing cards + postage. And every other player out there. They do three mailings a year. Now, I have no idea how many sets they send out, but if it costs them $50,000 to orchestrate a mailing (postage + cost of envelopes + employee salary to stuff the envelopes + cost of printing cards), I'd much rather they cut the 'free money' they mail me than someone over there have to lose their job.

All true except those cards generated interest and kept loyal MTG players coming back for more.  Which means buying more cards which is their end goal.  This is just like any number of other bad business decisions where the company cuts something to save a dollar while losing three dollars in the long run.  Not to mention the backlash and loss of goodwill.  It's too bad but it's obvious that they don't "get it".

This isn't even going into the effect it's going to have/has had on local gaming stores and tournaments.