My opinion on D&D 4E

[goodmangames]

Hi everyone,

I really like gaming, game stores, and playing games, and it is for these reasons that I traditionally do not discuss the business side of the industry in public forums. In the 3E era I kept my head down and just focused on publishing good product. This worked out pretty well, and now many gamers perceive Goodman Games as one of the more successful RPG publishers. All this happened without "Joseph Goodman" being well known. You know who runs Malhavoc and Green Ronin and Necromancer and Paizo, but I routinely encounter fans who have no idea why Goodman Games has "Goodman" in the name. That's how I like it.

Now, eight years into the business, I feel compelled to write my first personal note on the business side of things. Welcome to "Joe Goodman's first commentary on the business." I write this primarily to portray what I consider to be the facts of certain elements of the business, particularly the success of fourth edition D&D.

First, a little background. I own Goodman Games but don't run it full time. Goodman Games has an outstanding staff who do most of the product development, run the tournaments, handle the shipping, etc. I personally have a full-time "business job" at a Fortune 50 company, where I manage a large staff running a billion-dollar division. Goodman Games is an extremely enjoyable outlet for my love of the hobby, but it's not how I pay my bills. I do it for fun because it is something I absolutely love to do. I wrote my first RPG at the age of 10, self-published my first work at 17, had my first professional contract at 18, had my first staff writer job at 21, and have been involved professionally in the gaming industry ever since.

I believe brick-and-mortar hobby stores are the lifeblood of the industry. This is for a couple of reasons. First, it is these stores that introduced me to the hobby, along with many other gamers. Sword of the Phoenix in Atlanta, GA was the store I shopped at for years. It was there that I discovered not just D&D, but also Ral Partha and Grenadier miniatures, Warhammer 40,000, Space Hulk, and many of the other games that I played obsessively as a child. Hobby stores are the single best way to introduce new gamers to the hobby. No online experience can match this.

Second, hobby game stores serve as community centers. It's not even "the best" game stores that do this; even the ones without gaming space have bulletin boards, well-connected staff, and affiliations with local cons. When you move to a new city or discover a new game, the hobby store is the best place to find new friends to play it with.

Third, speaking as a businessman, hobby stores are by far the largest market for games. The online market (including print, PDF, and POD) simply can't compete. As Goodman Games has matured into one of the standard stocklist items for typical game stores, I have seen my overall sales base grow steadily while online sales have dwindled. Online sales now make up a tiny fraction of Goodman Games sales. Yes, PDF sales are the fastest-growing sales segment, that is true, but the hobby market is HUGE compared to the online market - orders of magnitude larger. If you support retailers, they will support you, and that effort pays off tenfold. (There's a reason Wizards could pull their entire PDF backlist without blinking an eye. Those of us with good retail distribution are among the few observers to understand this.)

It is because of this belief in game stores, and my own personal retail experience, that I focus many of my product development and marketing efforts on strategies that benefit not just Goodman Games, but also retailers. These strategies have included Free RPG Day, a first of its kind in this industry; my annual May sale, which no other RPG publisher does; and the DCC spinner racks which I supplied to hundreds of retailers a couple years ago. These are the promotions consumers can see; there are many others, behind the scenes, that retailers have seen.

I mention these retailer promotions because they are feedback channels that don't exist for other publishers. There isn't another third-party RPG publisher that has shipped spinner racks to several hundred stores and gotten feedback on how it affected sales. There isn't another third-party RPG publisher who runs an annual sale through distributors. And so on. As a result of these efforts, I get feedback through a number of different channels. Sales numbers are a form of feedback. Personal conversations with retailers are a form of feedback. But direct retailer feedback is a significant feedback channel for me, and one that I believe is much more significant for me than for most other third-party publishers. Those of you who follow these forums have seen my Game Store Review Thread, and have a sense of just how frequently I visit stores.

It is based on these feedback channels that I evaluate the industry. These are my "senses," if you will. Goodman Games is not an imprint that publishes through other companies, multiple steps removed from distributors and even further removed from retailers. Goodman Games is not a company founded on online and subscription-based revenue streams. Goodman Games is a different sort of company from the rest. Goodman Games -- and Joseph Goodman -- are about as close as you can get to the pulse of retailers, within the third-party RPG publisher segment.

And now to the question at hand: How is 4E doing?

4E is doing well, very well. I'll define the parameters of "well" below. First, let's dispel a couple myths.

Myth #1: "We can publish the same book in 4E that we did for 3E, and use that as a yardstick for sales." Simply not true. Log on to dndinsider.com and you'll understand why. You have to understand Wizards' digital initiative (and its many ramifications) if you intend to publish 4E books at all. Sales of many categories have changed based on what the digital initiative provides customers free of charge. Sales of character record books in 3E and 4E are apples and oranges, not suitable for comparison, and there are other categories affected as well.

Myth #2: "Distributors do not support 4E." Simply not true. The pre-orders on Dungeon Crawl Classics #53, #54, and #55 were larger than anything I had seen in years. More recently, Level Up #1 sold out its first wave of distribution sales in under 48 hours, then sold out the second wave of distributor restocks a week later, and distributors continue to place huge restocks. There is significant distributor support for 4E.

Myth #3: "Retailers do not support 4E." Simply not true. This sort of claim is where the debate breaks down, because one gamer can say, "4E isn't selling at my local store," and it's hard to refute that. Store-by-store experiences do indeed vary widely, and the truth is that there are many individual stores where 4E isn't selling well. It is these stores, and gamers who trumpet these stores, that have led to many claims regarding 4E not selling. What can I say to refute that? I will rely on my credibility regarding direct retailer feedback.

I've personally visited 47 different game stores so far this year. Yes, 47 -- see http://www.goodman-games.com/forums/vie ... f=1&t=5197 for some details. Next time someone tells you "4E isn't selling at my local store," remind him that he's discussing 1 store. Aside from those personal visits, I've spoken on the phone with probably 100+ other game stores, gotten direct feedback via a Dungeon Crawl Classics sale (see list of stores in the download at http://www.goodman-games.com/dcc-sale-09.html ), sponsored another year of Free RPG Day (see list of stores at http://www.freerpgday.com/stores.htm ), and run two Worldwide D&D Game Day promotions involving every store participating in Worldwide D&D Game Day (see http://www.goodman-games.com/WWDDD5-23.html and http://www.goodman-games.com/WWDDD3-21.html ). There are hundreds of stores that participate in each of these events individually, probably thousands overall if you compile the various lists. Naysayers who post claims of "4E doesn't sell well at my local store" seem to omit these massive lists of supporting retailers.

Back to myth #3: "retailers do not support 4E." Simply not true. Why not? Because Joe Goodman says so, and I know more about game stores than you do. Show me someone with the same list of credentials regarding direct retailer feedback, and I'll back down. Until then, the statement stands.

With these myths dispelled, let's discuss the meaning of "doing well." First, some historical context. Before I founded Goodman Games, I wrote a book on the history of this industry. It was something of a research project that turned into a book. I was planning to start a game company, and I wanted to do it right, so I researched the history of the three primary publishing categories. Most of the gaming history that gets published these days is product-focused, with an emphasis on creators, artists, inspirations, and the like. My research was focused on the business strategies of the companies involved. For example, in the early 1980's when Games Workshop got the license to produce official D&D miniatures from TSR, they did absolutely nothing with it and effectively used it to shut down their competitors so they could launch their own fantasy miniatures line. Has anybody else here studied the retail locator lists in White Dwarf magazine over the 1980's? Cross-reference the independent hobby shops listed in the early 1980's against the addresses of the GW company shops listed in the late 1980's. It's fascinating; you can see the pattern of how GW opened shops in close proximity to their hobby accounts. If you ever want to learn actual TSR sales figures, do your homework and find all the lawsuits against them. It's all public record, and I've read it all. Dave Arneson sued TSR three times for unpaid royalties, and each of the court filings lists TSR sales figures for the years where he challenged.

All of this research (which I ultimately decided not to publish) forms the historical context for my opinion of D&D 4E. Dungeons & Dragons has had two, and exactly two, peak years. The first was 1982. The second was 2001. The mid-80's were a declining period, and the 90's were a trough. From a business perspective, the creatively-much-admired 1970's were really a low point for D&D. Fast growth, but very low sales volume compared to the years to come.

From 1974 to 2009 is 35 years. Or, roughly two generations. D&D has roughly one peak every generation. 35 years total, 2 of which were great, and the other 33 of which were "okay."

But what do people compare 4E to?

One of the two best sales years in the past 35 years of D&D. Not the other 33 years.

Is 4E doing as well as 3E sales in 2001? Definitely not. That was the high point in a generation.

Is 4E doing as well as D&D sales in the times of 1974-1981? 1983 through 2000? And approximately 2002 through 2008?

Yes.

So, is 4E doing well?

Yes. In the 35 year history of D&D, we stand at a high point. D&D is selling more copies, reaching more customers, supporting more game stores, than it has during most of its history.

Will 4E do as well as 3E?

Maybe. But frankly, who cares? That's like asking if 4E will do as well as AD&D did in 1982. Or as well as 2nd edition did. Or as well as the little white box. Anybody who's ever had a job where they're accountable for sales numbers -- and I've had a lot of these -- knows that there are some marketing events that simply hit the ball out of the park. 3E was one of those, and it will be hard to top for a generation to come. It was a once-in-a-generation feat, just as D&D sales in 1982 were a once-in-a-generation feat. For twenty years following 1982, D&D sales never recovered their peak. Twenty years. From the vantage point of 1983, was D&D dying? In 1983, you could have said that. The twenty-year decline was starting. But D&D went on to have another peak in 2001.

From where we stand now, at the very beginning of 4E, I see a long, strong run ahead of us. Just as in 1982, it may be another twenty years before the generational peak of 3E is reached again. Or it could be next year, when the economy improves. Just as in 1983, who can say?

In the meantime, there are thousands of game stores clamoring for 4E product. And I'll be here publishing it for a long time.

That's all from Joseph Goodman, signing off from business-oriented posts for another eight years.

[zombiekiller]

Thanks for sharing ... and for the great products and customer service. GG rocks.

[Piratecat]

Excellent post, Joe. Glad to hear it, and I'll say that it's a pleasure seeing multiple perspectives from the people leading the industry.

- Kevin Kulp

[Rick Maffei]

In the 35 year history of D&D, we stand at a high point. D&D is selling more copies, reaching more customers, supporting more game stores, than it has during most of its history.

Well said, Joseph.

We gamers are a passionate (and extremely discerning) lot. I enjoy speaking to the virtues and failures of game systems as much as the next guy. In the past year I've played 4e, 3.5e, and 1e — and enjoyed them all. Every incarnation has had its strengths and weaknesses (1e: weak magic-users; 2e: THAC0 didn't help much; 3e/3.5e: too much math; 4e: give me another year & I'll find one ... well okay, I want magic missiles that automatically hit ). The Internet gives space for these arguments to enter the public forum, which is fine, but when these arguments enter the realm of "the system you like isn't selling well, therefore the system I prefer is better" it serves no purpose, especially when such arguments often made by folks making dubious claims with scant empirical evidence.

4e is doing fine. D&D is doing fine. Great in fact. I'm excited to be writing 4e product for Goodman Games.
We all have our favorite editions and game systems—heck, I even played Mythus at one point and I own a copy of Cyborg Commando. To each their own, it's a free country. But in the end, we're all sharing the wonderful experience of playing an imaginative game with a 30+ year history. And that's a great thing.

Now, if you'll excuse me, I've got to go visit two game stores so I can bask in the Free RPG Day experience!

[Ramone]

Wow! That was extremely enlightening! Thanks for sharing Joe, I appreciate your insight from a business perspective. I always find the history and business end of the hobby fascinating.

[Coleston the Cavalier]

Thanks Joe!
I REALLY appreciate getting to read your analysis of 4d D&D.

[carmachu]

Very interesting read. Any one playing GW games already has seen that practice in action. Of course they open their own stores near hobby centers.

:

[Wyatt]

That was very interesting indeed Mr. Goodman, thank you for sharing it. I wasn't surprised how much I didn't know about you!

[Sebastrd]

Amazing stuff...I've never been a customer of Goodman Games, but after someone pointed this out to me, I had to register and comment. Thank you for the great insight into the industry. You may have earned a new customer simply via that post.

[goonalan]

Thanks for that, enlightening.

And more power to your elbow- for adventures you're quite simply the best in the business.

Cheers Paul

[Jeff LaSala]

I appreciate the insight, Joseph!

[blackdiamond]

Well done Joe. We need more nuanced discussions like this. I would love to borrow that manuscript for an afternoon....

[richgreen01]

Really interesting post - thanks for sharing this.

Cheers


Richard

[DiasExMachina]

I have been quoting you all day today at the event. Good timing.

[jeffb]

Thanks for the well thought and informative post, Joe.

I for one, was unable to particpate in a free RPG day and do not have a FLGS to support (though there is a somewhat Local GS), but I did order up some more Goodman 4E product today! Thanks to you and the GG crew for supporting various versions D&D as well as bringing us great Generic and C&C products too.

[Ken Hart]

Nicely stated, Joseph, and probably the best case I've seen for the continued support of the retail stores. Based on a few of the negative posts I've read elsewhere, it's as though some of those writers came a conclusion first (e.g., "4e is selling badly") and then worked backwards to line up stats that would support that conclusion. I entered 4e with no expectations, merely observations along the lines of version 3/3.5 had been around a while, the economy was slowing down, the RPG 'boom' of 1999-2001 was beginning to implode just like the comics industry did in the '80s, and something needed to happen at the top to jumpstart the industry. Hasbro/WotC saw the threat to their profits and acted. So I viewed 4e as being inevitable and perhaps even necessary considering the industry's state, and -- to my surprise and delight -- it's actually pretty darn good on top of that.

[jdrakeh]

As somebody who is not currently a purchaser of 4e product but who is both a supporter of brick and mortar retailers, as well as a fan of your former D&D 3e products, I appreciate you bringing what I consider to be be a much needed injection of positive energy to an industry-wide discussion that seems to be dominated by a bunch of negative nancies. I just wanted to swing by and offer a genuine "Thanks!" for your contribution.

[meverz]

Very interesting post Joe, thanks for giving us a bit of an insight into the industry and Goodman Games in particular.

Now, if you can just find a way to support retailers, while also making it possible to also get a (free / heavily discounted) pdf version as well without costing an arm and a leg (like your great idea with Level Up!), I will have the best of both worlds.

[Highmoon]

Joseph, please man, get that history book out there somehow. Ever since Gary's death last year, and more pointedly with Dave's death a few months back, I've been wanting to see a good history of our hobby and there's none compiled. If you have something akin to that, I'd love to read it (even if off-the-record). Our hobby needs to have its history chronicled before we lose all the founders.

As for the rest of your post, please don't make us wait another 8 years for this type of incisive analysis.

[masterdwarf]

The insight to the industry is beneficial, and you've certainly been a key player within the D&D product line. It sounds like 4E is doing well for Goodman Games, which is good to hear. However, I think it's only fair to say that WotC holds the truth about 4E and it's current state within the industry, no? After all, they're the ones leading the band. I'd be curious to know the ratio of '3E to 4E converts' to new 4E players. I know many acquaintances that have bought the core books but have not played one game of 4E, and it's been a year since its release. hmmm...

[JRR]

I simply don't agree. I don't have any hard data to back up my opinion, just my own, admittedly anecdotal experience. There are 3 gaming stores within driving distance. Neither has a substantial amount of 4e on the shelves. Neither, has a 4e game running in house, they all seem to be 3e games. There are several local player/game seeking internet forums or mailing lists. None of them ever even seem to mention 4e. I realize that's only a small slice of the pie, but around here 4e just isn't played. It's not bashed much, it's just simply ignored.

[JesterOC]

Ok here is some more anecdotal evidence. I stopped gaming when 3.5 came out. I started back up when 4e came out. I have bought nearly every book, and I have signed up for 2 years of DDI. Here was our initial group.

My wife
My cousin in-law
His 17 year old son
My 13 year old nephew

We have played pretty steady for the past year. Just a few months ago, we lost the nephew, but gained back my old high school friend, and a neighbor who had not played since 2nd edition. The neighbor is planning on starting a D&D group for his son, and has bought books and minis.

As for stores in the area, we only have two, but both sell far more 4e than 3e even though the 3e stuff is nearly at 50% off.

So 4e doing well feels right from my perspective.

JesterOC

[mythfish]

Joe's one of the savviest businessmen I've ever met, so if he says 4e is doing well I believe him. But my personal experience has been more like JRR's. I don't know anyone who's playing 4e. I'd love to try it, but I can't find anyone willing.

[shimrod]

I registered solely to say that I owe my entire gaming career to Sword of the Phoenix. Before moving to Atlanta in 1987 (I lived less than a mile from Lenox - woot), I'd spent the previous 4 years just waiting for our couple of yearly trips down there so I could stock up on goodies. If it wasn't for that place, I probably would have never bought anything apart from the first two Mentzer sets...

[Treebore]

Well, this is how I sum up what Joe is saying. 4E is not selling better than 3E like WOTC employees have implied in many message board posts across the internet, however it is selling well as a "line". Well enough that people are playing and that Goodman is happy with the results. Plus he has bent over backwards to try and help LGS' remain a viable and vital part of the industry.

So 4E is not the "home run hit" that 3E was, but it is still a strong selling version of D&D, so we won't be seeing D&D "die", etc...

Will we continue to see LGS' die off? Yes. WOTC, Goodman, Paizo, etc... still sell their products via Amazon and other online discounters, and people are looking for the best prices in greater and greater numbers.

Even when the economy rebounds, this will continue. Simply because gasoline is going to go back towards $5 a gallon, and people will need to spend their money as frugally as possible to afford to buy gas. Heck, look at how much gasoline has already jumped, and barrels of oil are at only $67 per barrel.

The only LGS' that are going to survive are those that are in a strong market area to begin with, but also expand and diversify beyond just RPG's and comics.

Plus, the simple reality is that over the next 10 to 20 years shopping on line is going to become the "normal" way we shop. Store fronts of all kinds are going to disappear. Its just that LGS', Book stores, music stores, and DVD rental locations are the first and most noticeable to us. Grocery stores are already offering online shopping and home delivery,

Heck, I already do 70% of my shopping online because I live 30 miles from the nearest decent size town that even has a grocery store, let alone Wal marts and the like. Once the rest of the country catches on to the convenience and savings of online shopping, store fronts are going away across all spectrums.

So I applaud Joe's efforts to prolong the life span of LGS' in general, but as long as the US keeps growing technologically savvy and gas keeps on going up, the internet is going to become the default way people shop, and LGS' and all types of storefronts are going to be disappearing. Its simply a fundamental way our world is changing.

Our dedicated music stores have completely disappeared as far as I can tell, LGS' are not far behind. Shopping on line is the way of the future.