Tue, 1 November 2011
It's this episode Chris and Fred talk to Peter Adkison about his time as the C.E.O. of Wizards of the Coast, which includes the time that period when WotC purchased TSR and acquired Dungeons and Dragons, among other things. This is a bit of a follow up on the last episode. It's very interesting and contains info I've never heard before. Show notes will be crazy.
Words in quotation are direct quotation. Word's not in quotation are my notes, to fill in or expand the quote.
1. Founder of Wizards of the Coast 1990
C.E.O. until 2001. (Peter says 2011 by accident, he meant 2001.)
During that time WotC; launched Magic: The Gathering, bought T.S.R., on day 2 after purchasing T.S.R. began developing 3rd Edition dungeons and Dragons, created the Open Gaming License and the D20 License, and was bought by Hasbro.
He was not involved in 3.5 or 4E D&D.
2. Bought Gen Con in 2002.
C.E.O. of Gen Con L.T.D. until present (Present equals Nov 2011, I can't predict the future.)
3. Cofounder of Hidden City Entertainment with Jasper Myfors in 2004
C.E.O until 2011
Hidden City licensced and created cards for Bella Sera. (Girls on horses.)
Peter on TSR being purchased for 25 million, and it's actual value.
25 million was roughly the amount of debt T.S.R. had acquired. Purchase price was actually higher.
"25 million was way way way more than it was worth." If you used the 1997 revenue to determine the value. If you used 1996 revenue, "it was right on the mark." By 1998, WotC had increased the value to the 30 to 35 million range.
Novels actually made up the larger share of revenue not games. It was "roughly 60 / 40 split."
The purchase was more for strategic purposes. "By us it was strategic in nature... by buying T.S.R., Wizards became clearly the top dog in the industry." It changed WotC's positioning "from the head of a category to the head of an industry."
This seems to pay off as they are purchased by Hasbro in 1998, and Peter reveals the D+D brand was at least 1/3 of how Hasbro valued the company. Wikipedia put's the purchase price of WotC by Hasbro at 325 million.
Peter on Hasbro.
Hasbro was hands off as far as managing WotC. Peter was told, "You will earn your way into integration through poor performance." Peter posits they were interested in WotC as their foot in hobby games. "Add it all up, it's as big as the mass market."
Peter on the OGL.
"The strategic vision behind it was, hey-- lets let other companies, frankly, do the part of the business that doesn't make money, and we'll just do the core books. I think that was a good strategy. The problem from Wizards perspective was that Wizards never really made good on the strategy. We kept... Wizards kept doing core books and kept doing companion settings. Whereas I think, Ryan Dancey, would say the original strategy was to cut the D&D team down to like half a dozen people. And that would have been painful. One of those painful decisions companies make, but might have been exactly the right strategy to do with the brand. That's kind of why it happened. I don't think anyone could forsee the repercussions of the Open Gaming License. The amazing response."
"... if we do go down this strategy it means we do have to charge more sharply into the downsizing of our internal staff. Maybe that realization would have said, well let's not do that. why should we do that when the company overall is highly profitable."
Peter on ideas that may have been left unexplored for growing the D&D brand.
"My vision for D&D, at the time, was doing an MMO. You know a big... do it ourselves... we're making tons of money. Take all the Pokemon money, or not all of it, but a big chunk of the Pokemon money, start a studio... and this was before World of Warcraft came along... and that's what we were real excited to do. and that's what we thought would be the biggest driver towards making Dungeons and Dragons as big, or bigger even, than Magic: The Gathering. We started a studio and had 30 people working on code and art."
Links: (to come.)