James Borda Writer, Game and Interaction Designer

A Letter to Greg Leeds, President and CEO of Wizards of the Coast

This is a short paper I wrote for my Business Lab class at the NYU Game Center. The brief was to pretend you’d met a game company executive recently and explain to him what you think he ought to change about his current business model. I wrote to Wizards of the Coast, the publishers of Dungeons & Dragons, Magic: The Gathering, Pokemon, Avalon Hill board games and a number of other properties.

In short: “Your fans create better content than you do. Change your business into a platform for capturing and redistributing that content.”


MEMO

To: Greg Leeds, President and CEO, Wizards of the Coast

From:  James Borda

RE:  Wizards of the Coast future business prospects

 

Dear Mr. Leeds,

It was a pleasure speaking with you last Sunday at Pax East. I really appreciated your open manner and willingness to hear the thoughts of a fan from outside the industry. I was especially pleased that you asked for a summary of our conversation; if there is anything here that you find of use, please consider it my donation to the continued strength of a company that I have always held in high esteem.

My comments centered around my familiarity with Internet business models and some somewhat philosophical tangents about how media businesses have been forced to rearranged themselves since the Internet has made their product infinitely and freely reproducible. I believe the games industry would be wise to take note of these changes and rearrange itself in similar ways.

From Publisher to Platform

The most successful new businesses of the 21st century don’t sell products. They provide platforms for the collaboration of their customers, and profit from those collaborations. Companies such as Ebay, Etsy, and Kickstarter operate as mediators for collaboration and exchange, posting reliable profits via a commission model. Wizards of the Coast could do the same.

Few products attract such powerfully committed consumers as games. Gamers are notorious for their participatory zeal, whether modding their favorite games and sharing the results with one another, participating in conventions and other social events, or even arguing over the ‘best’ rules editions or settings. But Wizards (and other game companies) largely fail to catch this lightning in a bottle.

For several years I have been watching the growth of the “Old School Renaissance”, a community of players who share their love of the early, out-of-print editions of D&D on personal blogs. Several interesting developments have arisen from the community, most notably the proven viability of very small publishers who transmit their success as bloggers into product sales. Some have been funded on Kickstarter; others have simply published a product via Lulu, POD or .pdf. The downside (for Wizards) has also been apparent: if there is a high volume of quality material being exchanged informally, then what do gamers need Wizards for?

You will certainly be familiar with online games retailers and small presses. You will also be aware that much of the material that is available on these sites is of poor quality. In a sense, the RPG industry is in a similar place as the video game industry was in the early console market, or the android games market of today: low barriers to entry mean that there is a glut of product, consumers find it hard to discover quality material, and the price of all material is being forced downward.

By restructuring as a platform, Wizards could combine the functions of Kickstarter and Nintendo circa 1995. It could act as a curator of material from the vast volume of fan creations, and boomerang these materials back to the community with quality design and the imprint of the D&D brand.

I suggest a three-tiered revenue model. The first tier would consist of an online community hosted by Wizards, with a very low subscription price. The privilege of a subscription would be access to all the rough game materials the community (including Wizards employees) generates. These would inevitably be playtested, discussed and modified by the community. The best of these (as measured by a rating system, volume of interest, or simply the professional judgment of Wizards’ staff) could then be professionally designed and typeset as official D&D products and sold online and through Wizards’ ordinary retail channels (the second tier of revenue). The third tier would be an expanded subscription, significantly more expensive, which would guarantee delivery of all D&D branded products for a discounted retail price.

Effectively, Wizards would be outsourcing much of its R&D work to a community that does this voluntarily anyway. If Wizards offered fair payment to the originators of this content, it would strengthen brand loyalty and incentivize the community to keep sending in their creations.

There have been some interesting experiments along these lines already. The inclusion of developer tools in BioWare’s Neverwinter Nights allowed the community to create their own ‘modules’ and would have worked perfectly with this model. Paizo has an annual contest to find their next great designers, with the reward being a guaranteed published title. Paizo also has a subscription model for some of their publications. The Internet has revealed how strongly the ‘audience’ wants to be involved in content creation, a fact which the RPG industry may have been aware of before anyone.

Preparing For New Technologies

This model need not apply only to pen-and-paper RPGs.

Home 3D fabrication is already available, though low in quality. Before the technology matures, Wizards should prepare for a shift in the market for simple manufactured goods which mimics the changes in the media market. Small plastic items, such as game pieces and miniatures, will be some of the first designs that 3D hobbyists start to trade around the Internet. Once a consumer can download and print the full set of pieces for an Avalon Hill board game, there will be little need to buy the box.

Wizards can get out in front of this using the same model mentioned above. Rather than fight the inevitable, Wizards should start now to create a dynamic community of miniature- and board gamers who share designs with one another. The best designs can be folded into Wizards’ product line.

Looking Further

Google Glass is about to launch, and with it will come an explosion in Augmented Reality apps. For games, this means a more transparent boundary between the computer, the tabletop, and the ‘real world.’

AR glasses could juxtapose a board game onto a blank table. It could open a realm of new CCG designs in which the glasses recognize the cards and change the designs on them according to their positioning on the table, or according to who is looking at them. It could project a virtual environment behind the players. Virtual miniatures could actually march across a table and fight. Dungeon Masters could place virtual props on the table for their players’ inspection. And mobile gaming will take on a new dimension, released from the constraints of a 4” touch screen.

All of these developments will inevitably be explored by hobbyists and other companies, whether established or start-up. Even if they are outside of Wizards’ technical or strategic scope, it would be prudent to start exploring partnerships and licensing agreements to keep these developments close to the D&D brand.

Cross-pollination

The vaunted quest for a D&D movie crashed and burned in 2000. But as professional-quality media tools become cheaper and easier to use, once again fans are rushing to the fore, creating fantasy-inspired podcasts, animations and video series, and some are quite high quality. The only thing they are missing is the D&D brand. Just as Lucasfilm created a channel on its website to showcase fan-created videos, D&D could do the same. Dungeons and Dragons’ greatest strength is its brand – since its creation it has been synonymous with fantasy adventure. Keeping that association strong through branded media is paramount to Wizards’ continued success.

 

Best Wishes and it was a pleasure meeting you,

James Borda

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Posted: August 22, 2013

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