Thursday, April 2, 2009

A Market Analysis

I recently asked several of my good gaming buddies if they would continue to game 1st E if it was commercially supported. All of them who responded say absolutely. And that they would continue to pay it even if it wasn't. This got me to thinking, particularly about alternate ways of bringing 1e back to an active publishing life.

I then chose to ask my good gaming brother Steve, who happens to be a pretty well trained businessman why WoTC might not continue to support 1e. Below are is his very insightful answers to my questions:
***
Me: If AD&D was still commercially supported would you still play? Why or why not?

Steve: You mean it's not already?! Ha, ha, ha, ha...

That really is quite an intriguing question. There are a couple of interesting changes that take place when a product is peddled to the masses: First of all, it makes the sellers a lot more money, especially in comparison to what it would have made without large investment dollars pushing it in the market. This is the upside. Anytime a product is given a greater audience, it meets more buyers whose needs it's able to satisfy.

This has always been an interesting phenomenon, intuitive as it may seem. It's also why those silly info-mercials are still on TV late at night...because it works!!! There's always enough people in the marketplace that "need" that next gadget or widget the Inventor creates. Marketing really is the study of how to influence people to buy product A over product B. And is dependent on scarcity and the fact that our desires will always outweigh our ability to satisfy them. On a side note, Socrates is famous for saying "I am most like the Gods because I want the least."

Second of all, when a product is commercialized, it becomes increasingly more generic, thus loosing some of its authenticity. This is inevitable and is the major downside. You see, the greater the number of buyers there are in the marketplace, the greater the variety in personal preference. And, you guessed it, the customer is always right so, the seller has to make a more "bland" product if s/he wants to continue to make money. This can't not happen if a product is commercialized under traditional terms as I understand it -- ROI, or return on investment, is now the God of the product; the product must make more money than is invested in it. And I'll guarantee that there is no member of a board of directors that cares more about The Game than they do about satisfying the stockholders.

So, would I still play AD&D if it were commercially supported? No, but only because it wouldn't be the same game.
***
Me thinking: Excellent points. And hits to the heart of how do we commercially support or resurrect old school gaming and without losing its spirit? This led me to ask Steve more probing business related questions:
***
Me: I know You're not a business major anymore. But you know more about it than I do.

So:

Why does Hasbro/WoTC drop earlier editions of D&D when they come outwith a new one?

Steve: Money, although I'm sure they pass it off as "this one is new and improved and we would never sell an inferior product."

Me: Is the answer something like: "They do that to keep sales high. Sort of like when the video-gaming industry comes out with a new system; they charge lots initially; sales drop off and prices come down as demand wanes; then they make that system obsolete with a new system that they release at high prices again; they play up the new system via advertising and discontinue support for the old system, thus forcing everyone to buy the new system."?

Steve: Yep. You're already thinking like a businessman!

Me: If so, then it doesn't work well for print systems like D&D. Aren't you are going to lose a portion of the older consumer base that liked the old product and does not like the new product?

Steve: Yep, which is why they're dependent on continually getting new customers. Alas, we will always be in need of better advertisers and marketers of our products.

Me: Why not continue to support the old product in more limited production while still coming out with the new editions?

Steve: Simple answer is money, although this actually deserves a longer explanation. What little I do know about print media comes from buying over-priced textbooks for school. I do know that, as you'd expect, it's extremely costly to produce books (with all of the acid washes, paper production, transportation, etc.), as well as a huge risk financially! And while it seems like a company would maintain older version on-line to prevent what you mentioned in question #2, but, as i understand it, it turns out that they have to commit all resources to the production of the newest product just to break even. And so, if I guessed right, to still print media from an earlier version it would draw attention away from a product that is already a huge investment for the corporation and increase their initial risk.

Me: Is it that the older editions will compete against the new editions for sales?

Steve: Yep. That and they can't realistically expect someone to pay the same price for an older version of a book if there is a newer one available...even if neither is used.

Me: Or are they thinking: If we support the old system too, it will make those who would transition to the new system less likely to switch because of the fact that the old edition will continue to be supported?

Steve: That's a great question for a market psychologist and would seem like it was product-specific, especially for a product like D&D. The versions are sometimes so different from each other that you wouldn't even be playing the same game if you spanned more than a version, i.e. v2 versus v4.

Me: Is it the overhead of maintaining old school staff and printing small runs of material?

Steve: I would imagine for D&D the staff is constant, but printing different versions is quite costly.

Me: Couldn't this be creatively handled instead of adhering to a big-business model?

Steve: I think that if you and I could figure out a way to do that, we'd be super rich almost overnight.

Me: Wouldn't it work to contract writers or take submissions and use an editor that screens new material?

Steve: I thought that's what Dragon Magazine did. If not, then I think you might've answered #8.

Me: Couldn't you run it more like a publishing arm of the company; and print either on demand with an e-book like format or print limited runs occasionally as commercial demand requires?

Steve: I heard a piece on NPR the other day about e-books and they cited a small university in the mid-east that is completely virtual "textbooked." I have mixed feelings about that, but it's the only way I've thought of to address the problem of older versions of AD&D in the same marketplace as newer version. I've thought that if WotC would be willing to sell rights to v3.5 to a third-party company at an exorbitant price (hedging their assessment of the value of such rights) and allow the third-party business to incur some risk through their investment, then that company could roll the dice (no pun intended) and still make some dough by selling the older version completely on-line. They would still have to market and sell enough to get satisfy their investors and get sufficient ROI, but it seems like there are enough guys like you and I that would keep them in business.

Me: So one question with lots of little implied questions. I know there's alot of assumptions here and we haven't even touched on copyright or anything else. But I am seriously considering writing a proposal to this effect.

Steve: Aah, yes, copyrights.

Me: Thanks for your wisdom.

Steve: I don't know how wise anything i just shared was and it should include the disclaimer: "read at your own risk."
*****
So I scoured the WoTC site and Dragonsfoot about copyright issues regarding use of their material in order to develop an approach for my proposal. That's when I figured out that what Steven and I were anticipating in our discussions had already been achieved. So did we solve it, or did they?

Read the last post to find out.

peace,

Chris

No comments: