It’s How You Play the Game
by Linda J. Field
In a time when video games come and go as soon as the next hot release is out and board games like Parcheesi are hidden in the attic, it seems that being a ‘player’ in the games market would be a risky way to build a long-term business. But Wizards of the Coast, Inc. has successfully morphed through industry shifts and changing consumer tastes to become the world’s largest publisher of hobby games, a leading publisher of fantasy literature and an operator of specialty game retail store chains in the United States.
In a sense Wizards of the Coast has literally put ‘mind over matter,’ managing not just to remain on the cutting edge of the games industry, but to define it. Although founded only a decade ago by Peter Adkison, the company has acquired and is successfully marketing both old and new games appealing to all ages.
One of Wizard’s key strategies is not only encouraging people to play games, but offering safe and entertaining places to do so. In 1997, the company tried an experiment by opening a game center in Seattle to provide an environment for gaming enthusiasts to play and mingle. It was such a resounding success that Wizards began opening retail locations in 1998, starting with several in Western Washington. Headquartered in Renton, Washington, the company now operates 17 stores in California, Connecticut, Illinois, Michigan, Minnesota and Washington and maintains international offices in Antwerp, Paris, Beijing, London and Milan.
The retail stores, in addition to selling company products, provide game rooms for customers to try out card, board and trading card games or, for a small fee, video games. The game rooms are popular with gamers ranging from kids to adults, providing a social atmosphere where people can interact with each other as well as play or try out new games. These “places to play” build a sense of community among gamers, support the gaming industry, enhance retail sales, and draw heavy traffic to store locations.
Wizards of the Coast was acquired by Hasbro in fall 1999 but continues to operate as an independent wholly-owned subsidiary. U.S. expansion currently has top priority, with at least 25 stores planned to open nationwide in the coming 18 months. Spaces of 2,500 sq.ft. are sought in regional malls.
This expansion is possible because Wizards of the Coast made several successful acquisitions of its own prior to becoming a subsidiary of Hasbro. The company acquired Game Keeper, a chain of 53 stores and 100 temporary locations, in spring 1999. Existing Game Keeper stores do not have game rooms and will retain the Game Keeper name due to its high brand recognition. All future stores will have game rooms and be operated under the Wizards of the Coast banner.
But it was the savvy acquisition of title rights that led to what the stores have to sell. Although it is not considered polite to drop names, one of those titles will probably explain why Wizards knows how to make marketing magic. The company owns the world licensing rights to the wildly successful trading card game, Pokémon™, in all countries except Japan. Although other items carry the Pokémon theme, Wizards of the Coast owns the rights to the trading cards.
However, that one title is just the tip of the iceberg at Wizards. The company also owns some older favorites that draw customers in droves. In 1993, Wizards employee Richard Garfield was awarded the first patent on a game mechanic for Magic: The Gathering®. This game has an estimated fan base of more than six million players, is published in nine languages, and played in more than 52 countries. The adventure game Dungeons and Dragons®, now in existence 25 years and still going strong, became part of Wizards of the Coast after the 1997 acquisition of TSR Inc., making Wizards the largest U.S. producer of fantasy literature and pulling best-selling authors like Margaret Weiss into the company line-up. Another extremely popular trading card game, Legends of the Five Rings™, joined Wizards in 1997 when it acquired Five Rings Publishing Group, Inc.
Growth in titles and inventory is only a part of the successful expansion of Wizards of the Coast, Inc. The creative corporation took a good look at its physical capacity, company philosophy, and the product line available. Games were identified as a still viable, active part of life, as were accessories to keep them of interest to their audience. At the same time, Wizards recognized that a community of hobbyists was forming around certain titles in its collection and that role-playing was no longer the domain of only the very young or improvisational theater. The results of its research led Wizards to provide newer and better versions of old favorites, to create new games and pastimes, and to enhance the game rooms as a place to try them out.
“The same mechanisms (of older games) are there,” says Kärin Kriznik, director of marketing, Wizards of the Coast, USA. “It’s just the mechanics that have changed. Scrabble still exists. Today it’s more of a video game. It’s the same with solitaire games. They’re still there, just more often played on a computer screen than with a deck of cards. At Wizards of the Coast, we carry probably 3,000 different games with 5,000 different skews or intricacies.
“Puzzles are selling as well as ever, but today they might be three-dimensional, or made without borders. A new one we are carrying is made out of a photo mosaic; it looks like an impressionist painting but it’s made out of little tiny photos. We also carry Brain Teasers, which are advancements on the Rubik’s Cube. And our trading card games are taking over where collecting baseball cards left off.”
Trading activities involve much more than bartering skills. Describing Pokémon, Kriznik says, “The game helps to improve kids’ reading and math skills by requiring them to read the card to find point values, then to keep track of points remaining. Having a game mechanic behind the cards also makes them educational. It’s a trading card game, but a little like chess. It teaches kids what resources they need to win and defeat their opponent.”
Far from losing its popular edge as time passes, Pokémon is exhibiting surprising longevity. A recent promotion through the free distribution of a new card, the Mew, proved that the game and its characters are here to stay for awhile. Approximately 7,500 Mew cards were given out during one week in Baltimore, Maryland alone. The promotion was designed to launch the third year of the Pokémon Trading Card Game (TCG) League, which fosters social interaction rather than competition among players.
Success has its challenges, though, says Kriznik, noting that her company has had problems keeping up with demand for Pokémon paraphernalia and has even been accused of holding back on stock to stoke up the public hype that has surrounded the gaming phenomenon. “Besides Wizards of the Coast actually keeping some printers in business to produce the cards, the collation process is a very difficult one. Even paper supplies have been problematical, making us turn to a European supply. We’ve been meeting the demand by keeping every press that could print operating every day of the week. We have not been holding back on stock. We just had some problems to overcome.”
Less problematical but almost as popular, Dungeons and Dragons retains a strong public following, even after 25 years. But Wizards doesn’t believe in resting on laurels. Instead of sitting back and enjoying the game’s strong track record, Wizards is developing a new third edition, projected for release in summer 2000. The new edition will revamp some of the rules of the present edition and return to some rules found in earlier games. Also in the planning phase is a film based on the popular game.
Kriznik says that games like Magic: The Gathering® retain fans because they are challenging and offer more depth than the board or card games of even a decade ago. Both knowledge and strategy are required to solve some of the problems presented and much has been written about playing Magic, which has followers and fans much like chess. As a result, competitive tournaments have developed, and, according to Kriznik, there are even ‘professional’ Magic players, similar to professional Bridge players, who play the game for a living at tournaments worldwide. For instance, the 1999-2000 Magic Pro Tour offers more than $1 million in prize money and will draw players from all over the world to tournaments all over the world.
The popularity of Wizards games led to Internet chat rooms and online play on the company’s Web site, wizards.com. The site gets an estimated five million hits per day, fueled by e-commerce operations pulling in an estimated $1 million per week in sales. Also available are feedback areas for customers to add their opinions about games and stores. The Internet operations help to tie the brick and mortar locations together and serve as significant developmental generators.
In addition to maintaining its older titles, Wizards of the Coast is also developing new games. A new role-playing game based on Star Wars® is in the works. Using characters from the first movie in the series, the game will offer table-top scenarios and accessories. It will probably be paper-based and intended to be played in groups of people working through situations together. A game master would create the parameters of the game.
Another new game in the pipeline will result from Wizards being granted exclusive worldwide rights to publish trading card games, electronic card games and card game accessories based on the increasingly popular World Championship Wrestling universe.
In another move to keep its products and industry top of mind, Wizards now sponsors the world-famous Gen Con Game Fair, an annual four-day adventure gaming convention that attracts more than 20,000 gaming enthusiasts from all over the world. With Gen Con’s strong exhibitor base and high attendance, gaming enthusiasts consider it one of the premier sci-fi and fantasy gaming events in the industry; only the Game Fair in Essen, Germany draws a bigger crowd. Projected attendance for the 2000 show, to be held August 10-13 in the Midwest Express Center, Milwaukee, Wisconsin, is 21,000 gamers and 61,000 spectators. At the 1999 show, there were 234 exhibitors, and the Milwaukee Convention and Visitor’s Bureau estimated the economic impact to the area was nearly $29 million. Some industry analysts claim the show would be larger if there were more area hotel rooms.
Wizards of the Coast offers viable and visible proof that what goes around, comes around. It seems that old games never quite die and new games are as much in demand as ever. Their mechanics may have changed, moving from the dining room table to the computer screen, but the games market has plenty of play left in it. With the innovation of old games, development of new ones, and attention to what its customers really want, Wizards of the Coast is playing for keeps.
For more information, contact Al Mayes, director of real estate, Wizards of the Coast, USA, 101 Lind Avenue, Renton, WA 98055; 425-204-7339, Fax 425-204-5854.
