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Why No RPG Company Truly Competes with Wizards of the Coast

Art by Dmitry Burmak

Before we get started, my thanks to Matthew Whitby for having me on the Dungeon Master’s Guild House to discuss freelancing, adventure design, and more! Watch the video here and check out his other interviews!

Overheard on the Internet…

From time to time, gamers will look to an RPG and proclaim that it can compete with D&D. Sometimes it’s a person rooting for D&D’s demise. Other times, someone is rooting for their favorite non-D&D RPG. Either way, the statement is incorrect. Let’s talk about the reasons why D&D isn’t about to be threatened by any RPG out there. This is the first part of a series on this topic.

(Sources for data are found in the comments to this article.)

D&D’s RPG Success

The most obvious reason is that D&D sells very well as an RPG. It has always been the case. The very first OD&D rules sold out each printing, selling about 31,000 copies by November 1975… back when there was no RPG industry at all!

The 1977 AD&D Monster Manual had an initial print run of 20,000 copies, which quickly led to another 30,000 copies. It was reprinted twelve times over 15 years.

How good are those numbers? They are so good, that they exceed what most RPG companies can expect today.

For another example, take Dungeon magazine. For one of its 1984 issues, the magazine had 124,821 copies printed. It had 36,973 subscribers and store sales of 81,048. A 1992 Dungeon issue had 125,000 copies in circulation. In September 2013, 4E’s D&D Insider had roughly twice the subscription cost per month and more than 73,000 subscribers.

The D&D Basic Set was selling over 30,000 copies a month in 1979. The adventure Keep on the Borderlands, included in the Moldvay Basic Set, sold 750,000 copies a year. By 1992, D&D was translated into 14 languages with sales of over 2 million copies in 44 countries. By 2004, sales had exceeded $1 billion. That was 17 years ago.

Today’s numbers are even higher for D&D. More on that in a bit. 

Breaking the Law of Diminishing Returns

D&D isn’t successful, it’s uniquely successful. For the entire history of RPGs, every major product line has succumbed to two types of diminishing returns. First, over time any product will see its sales decline. At some point, the product has reached most of its audience, and sales decline sharply.

This industry has a second type. In a product line, the first core product does the best and then sales of later products diminish. This is hugely problematic because RPGs traditionally have very low profit margins. A new RPG company borrows money to make core books. They sell okay (there is revenue, maybe even profit). Now the audience demands supplements to keep playing. The company takes that revenue and uses it to print supplements… but each will generally sell fewer copies than the previous one.

Think about a core book that players and GMs buy. Now take the example of a book of monsters. Almost any GM will want that. Now we make a book of undead monsters, and some GMs just won’t care for undead. Every supplement will see diminishing sales and may not turn any profit at all, or even enough revenue to print another book. This may sound rare, but the history of our industry is littered with seemingly successful RPG companies who collapsed once the financial truth of diminishing returns caught up with them.

Kickstarter has changed this somewhat, making it easier for companies to find a niche audience. But it still holds true even with crowdfunding. This happens to all major RPG product lines. And that profit? For most RPG companies, it wasn’t high to begin with. By the end of the edition, the company is spending most of its profit on the next book, and can’t pay anyone a full-time salary, let alone retirement and health care. Around this time the company usually launches a new edition or a different RPG. Or goes out of business.

The Orr Report provides quarterly coverage of 5E’s domination

Update: What About 4E and Pathfinder?

Update: December 24, 2021: When I first wrote this blog article, I wanted to talk about this but could not because I didn’t have public sources. It is a popular myth to say that Pathfinder outsold 4E. This myth came from ICv2, a news/industry company that provides loose surveys of some hobby stores as data. They were the only source saying their data showed D&D being outsold.

Since first writing this blog article, Chris Sims (former employee of both WotC and Paizo) has stated that this myth is incorrect. 4E always outsold Pathfinder. This was corroborated by two other former WotC employees (Greg Bilsland and Trevor Kidd) and by Owen K.C. Stephens (who worked at both Paizo and WotC).

5E’s Success

D&D 5E is different. According to their staff as recently as 2020, sales of core books – and even supplements – were increasing over time instead of declining. And, new supplements were usually selling better than older supplements. According to staff in 2017, the 5E PHB had sold over 800,000 copies. That number is now well over a million, in all likelihood.

This success was a surprise to WotC, who had planned 5E’s revenue to come primarily from non-book sources. It is possible book sales have slowed, since we hear talk of a revised edition. (Or, it could be something else, as we’ve discussed on the Mastering Dungeons podcast.) Still, it is safe to say that 5E has been far stronger than any RPG current or prior, and fundamentally different.

Today’s D&D books have planned distribution dates for European, Middle-Eastern, African, and Asia-Pacific regions. WotC claims more than 50 million players, 8 years of consecutive growth, and sales each year growing by more than a third. D&D books are routinely in the top 10, if not top 5, of all Amazon book sales – and the placement is getting better each year. Imagine any company that can reliably do that, in any industry! It’s phenomenal!

D&D isn’t alone. It’s part of Wizards of the Coast, which is part of Hasbro. Some quick numbers for WotC overall. Q3 2021 was the second-largest quarter in WotC history, and 32% higher than a year prior. Q2 was the biggest ever, so the two most recent quarters were the biggest in history. The Magic the Gathering Adventures in the Forgotten Realms set was the best-selling summer release of all time.

D&D’s Brand and Reach

D&D’s brand is on an even higher level than D&D book sales. D&D as a game has tremendous brand reach. We mentionedabove about its international distribution. Tim Kask and Jim Ward, former TSR employees, say that the 1983 Mentzer “Red Box” Basic Set was selling roughly 100k copies per quarter… but that the German and Japanese editions of the Red Box also matched those sales numbers for several years… and there were 8 or 9 language editions being sold!

Very few RPGs have a strong international presence. One that does is Call of Cthulhu, which is currently number one in the Japanese market through unusual methods (a story for another day). There are a few other examples. But, across the globe, no RPG has the brand strength of D&D. D&D had organized play programs more than a decade ago that saw regular play across Europe and Australia.

How big has D&D been as a brand? We joke about this on the Mastering Dungeons podcast: advertisements in magazines show us that Spain sold D&D branded bologna in the ‘80s, as part of the craze over the D&D cartoon. It was a major show all across the US, Latin America and other countries. Brazil recently used the D&D cartoon in a car commercial.

Here in the US, we can see D&D referenced in multiple TV shows and movies in just the past few years. There was a time when the brand was popularized by scandal, and then turned that notoriety into D&D themed birthday plates, action figures, and more. Today, the brand is bigger than ever and has the opposite of a scandal. While stigmas remain, it’s now fairly cool to be associated with D&D. Dwarven Forge recently invited four professional football players to talk D&D with them on a livestream, and we have had four or five WWE entertainers on a stream before that. Casts of shows like Stranger Things, Star Trek, and Game of Thrones have appeared on podcasts and streams to share their love for their game. And they brag about it in public to their fans.

You can see D&D clubs in middle schools and high schools across the US and Canada. At a recent high school cross-country meet, a team member saw the book I was reading during a break. “Is that Tasha’s?” he casually asked. (Sorry, kid, it was Fizban’s. You’re still cool, though.) Parents want their kids playing D&D. When I ran a campaign for middle school kids, their parents threw me a party to thank me shared kind stories of how the campaign had been good for their kids.

At any large hobby store that is growth-minded, they offer D&D camps. Most of their players come in brand new, with half of them having heard about D&D on a streaming show. D&D has reached the point where its brand gets other entities to work for it, spreading its gospel, because it benefits them too. We see that in its partnership with the DMs Guild, Roll20, D&D Beyond, and more. Everyone in the ecosystem (not just WotC) benefits when the name of D&D is promoted. For someone outside the ecosystem, competition is tough. Try to start up a game of (insert the name of a really awesome RPG here) at your school or FLGS, and it will take time and effort to succeed. Try to sell branded birthday plates for a non-D&D RPG and, yeah, that’s unlikely to turn a profit.

Brand recognition is super important, and D&D’s numbers are incredible, but next time we will cover the real reason why D&D has no competitors!

10 comments on “Why No RPG Company Truly Competes with Wizards of the Coast

  1. Alphastream
    December 1, 2021

    Mike “Sly Flourish” Shea asked if I could provide sources. Yes!

    OD&D sales: This comes from David Ewalt’s excellent book, Of Dice and Men. He provides numbers I had not seen before for OD&D. It’s possible they are wrong, but he is a sound researcher. Sources such as the Acaeum site provide incomplete numbers, which add up to around 15,000. Either way, higher than many small and medium RPG companies manage through traditional and Kickstarter distribution.

    1977 Monster Manual: Of Dice and Men, but also backed up by other staff reports.

    Dungeon, Dragon Magazine: The 1992 TSR Catalog, Merric Blackman analysis, Acaeum reports, Dragon and Dungeon circulation figures.

    DDI subscriptions: EN World analysis (http://www.enworld.org/forum/showthread.php?308250-How-many-people-subscribe-to-D-amp-D-stuff#ixzz3pJ1iiTfp). (I don’t generally fully trust Dancey as a source, but if you do, he claims that WotC wanted the number of DDI subscribers to be above 300k, and thus DDI was a failure to WotC.)

    D&D Basic Set numbers: Tim Kask quote in 2011 where he verifies the numbers with Jim Ward, Ryan Dancey on EN World, Acaeum reports. 1981 issue of Dynamite Magazine claims 250,000 copies sold in 1979 (double the 1978 numbers), but I didn’t use that data as I’m not confident that they were speaking just of the boxed set and not also adding in DMG sales. Similarly, I did not use the higher sales claims from Benjamin Riggs found on EN World, as the source isn’t clear. Translation data and 2004 sales from Wikipedia. Should it be of interest, Bloomberg in 2019 (https://www.bloomberg.com/news/features/2019-07-08/how-to-be-a-professional-dungeons-dragons-master-hosting-games ) provided 5E Starter Set sales, including 306,670 for 2018.

    5E 800k number comes from Stan! on the Tome Show (link in the article). The 1 million figure comes from a personal non-NDA conversation with a senior staff member in 2017, so I feel very safe in saying that 5E sales are above 1 million by now.

    D&D planning its 5E revenue from other sources (licensing such as video games and t-shirts) comes from several personal non-NDA conversations, though there have been allusions to it in various news articles.

  2. Alphastream
    December 1, 2021

    WotC Q2 and Q3 data comes from Hasbro quarterly release earnings, which you can find summarized on the Mastering Dungeons podcast or Comicbook.com articles. Comicbook.com is the source for the MtG sales data, which also came from a Hasbro quarterly earnings call.

    Call of Cthulhu being number one in Japan comes from various sources such as https://www.dicebreaker.com/games/call-of-cthulhu-rpg/news/call-of-cthulhu-dnd-japan-rpg. I’ve verified it on trips to Japan, seeing the huge popularity on gaming store shelves.

    Discussion around D&D camps is based on personal discussions with 5-8 stores in cities including Portland, Houston, Cleveland, and Seattle.

    One of the Brazilian Renault commercials can be found here: https://youtu.be/rrp2nmfzxio It’s wonderful.

    And, most importantly, the long-rumored existence of D&D-branded bologna was verified recently, including here: https://mobile.twitter.com/docetist/status/1322227181049671680

  3. Daniel
    December 1, 2021

    Very interested to hear your thoughts on why D&D has no competitors.

    • Kerney T Williams
      December 2, 2021

      They have had competition at times when something was wrong, either when TSR was broke due mismanagement (White Wolf) or when they misstepped with the 4e debacle when Paizo was outselling them for several years.

      Thing is, eventually, a mistep could be fatal, but the some one would buy the property like WOTC/Hasbro did and re invent it.

  4. aurdraco
    December 4, 2021

    Great article, Teos!

    • Alphastream
      December 5, 2021

      Thanks! Good to see you here!

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