Tuesday, July 22, 2014

The Underdog (Tradecraft)

The First Law of Marketing is the Law of Leadership. Once you're the leader in a mature market, you take the majority market share and find yourself in an unassailable position. Your competitors fight over the fragments of what's left, leaving you sitting pretty at the top. Opportunities come to you.

Market share leadership includes such companies as Microsoft (Windows), Apple (mobile music devices) and Facebook. Your position is safe enough that you can experiment and break your model on occasion, provided you come back to it later. You have permission to make mistakes, whereas your competitors don't. It strengthens your position as you innovate.

That's the traditional marketing theory anyway. What would happen if Windows went open source? If Facebook opened up their code so anyone could make a mini Facebook walled garden? What if the iPod was a software platform and not hardware dependent? What if anyone could make a version of Dungeons & Dragons? What if one of those iterations was better than the original?

That's where we stand right now with Dungeons & Dragons 5th Edition. Pathfinder owns the market, and worse for Wizards of the Coast, has co-opted the brand. Dungeons & Dragons equals Pathfinder in the mind of the consumers that matter, the alpha customers. In this unfathomable situation, you have two options. For a smaller company, they would be looking at option one, law 10 of marketing, the Law of Division.

The Law of Division stipulates that a mature market will eventually divide. Can't beat Coke? How about energy drinks? How about flavored juices? Water? Can't win at shoes? How about running shoes? How about hiking boots? How about stupid spring shoes? Can't win at role-playing games? How about the entry role-playing game? How about the advanced role-playing game?

This is not a very good Wizards of the Coast strategy for role playing games, as the RPG market is already too fragmented, too divided. It's almost like everyone has one of those soda making machines at home and no longer needs to buy Coke. There are enough role playing games available right now that I sometimes wonder if they exceed the number of interested players. A quick look at the Ennie nominees this year reveals that some key categories have 60% of the products available direct only or through Kickstarter. I expect that to continue and deepen. No corporation can survive on the scraps of the RPG world. The Law of Division is an opportunity if you're a bathrobe publisher, but not a viable strategy for a 7 billion dollar corporation.

Instead, Wizards of the Coast and Dungeons & Dragons must put the genie back in the bottle. They must press the undo button on their open source blunder. The blunder really, was not following through accepting the genie was out, but that's another story. What WOTC must do is take back their position as market leader. Here's the thing, according to the marketing laws, it can't be done. However, since they shouldn't have been able to lose their position in the first place, the rules have changed. Perhaps there is hope. Perhaps the new rules allow genies to go back in bottles. Perhaps they can create a magic funnel.

How do you do that? You don't brute force this. You don't step in as the 500 pound gorilla, of which they are, and assert your dominance. You can do this if you don't believe what I'm saying. If you don't believe in the rules of marketing, then by all means, say you were on a break. Launch your game with a massive, traditional marketing campaign. But what if you're wrong? If you're wrong, you fail spectacularly. You fail so badly people remember your name and study you in business school.

Oh no, you must play the underdog. You work it subtle. You work harder. You take careful steps and put all your energy behind smart strategies. If you're big and trying to play the underdog, you can accomplish even more. If genies go back in bottles, it's this way. It's a slow coaxing.

Everyone loves the underdog. Americans especially love underdogs and Dungeons & Dragons is quintessentially American. Go read Guy Kawasaki's, How to Drive Your Competition Crazy and you'll learn underdog strategy. It works for game stores and it definitely will work for a multi billion dollar corporation. You cannot be a 500 pound gorilla beating up on the little guy. People will hate you on principle. So you position yourself as the underdog. You set your sights on bigger competitors to show you're just the little guy, the plucky underdog. You slowly peel that Dungeons & Dragons brand label off your competitors product while everyone admires your pluck. You carefully put it on your bottle.

This leads to what I think is the brilliant yet predictable Dungeons & Dragons 5th Edition roll out approach. It's subtle, underdog marketing strategy. It's such an underdog, it's so grass roots, it lacks even a name. Is it D&D Next? 5.0? 5th Edition? Nope. Just D&D. It's the Just D&D Edition. It's the promise of a clean edition without splat books, without adventures written in house by monkeys. It's the promise of a slow roll out of core only product while embracing the Internet age with free online content. No need for bombastic self promotion. We're the little guy, the underdog. Come check us out.

It has to work. It's the only viable strategy for a 500 pound gorilla.


  1. "The blunder really, was not following through accepting the genie was out, but that's another story."

    Glad you mentioned that, because I think it was the real mistake. Open sourcing in the first place was, I think, a big part of why 3.0-3.5 kept the dominance of D&D and didn't lead to the watering down of the brand a decade earlier than it actually happened.

    The problem is that once you go that route, you CANNOT go back. WotC tried, and the result was the comparative success of 4.0 vs. Pathfinder.

  2. Absolutely. You have no other choice but to move forward from there or risk losing your brand, as they did.

  3. "The blunder really, was not following through accepting the genie was out, but that's another story."

    I also like that you mention this they created Pathfinder by not allowing Paizo by yanking licenses for Dragon and Dungeon magazine, by putting a poison pill in the GSL, rather than using the OGL. No one stopped supporting D&D with 3.5 but nearly everyone did when they chose to do 4.0 because of that poison pill. The big things was you had all your competitors supporting you rather than directly competing with you.

    There were other errors to, pulling every license out there, making unnecessary changes to your most popular setting, and firing staff that bleed away to your competition or became new competition.

  4. "You cannot be a 500 pound gorilla beating up on the little guy. People will hate you on principle."

    Which I think is what accounts for at least part of Games Workshop's diminished reputation in recent years.

  5. Pathfinder is really the big guy?

    I don't know the total sales numbers from the two companies, but it makes me wonder if this is a mostly localized thing: in some areas, Pathfinder would be bigger; in others, D&D. PF's not the big guy in our area. In fact, PF IS the underdog; even your (apologist) ;) article works nicely into the theme that PF is the underdog and that's why they deserve support.

    I don't think WotC would have been able to survive if they weren't STILL either the biggest dog in the room or at least tied for first. It seems like we're talking at worst, Coke vs. Pepsi - not Coke vs. some orange fizzy drink.

    To me, WotC's marketing strategy isn't really about playing the underdog; rather, they're just continuing to do what they do because they were never not the top dog in the room at any point. At the very least, THEY believe that, even if other numbers prove this wrong - and from the way you describe PF, I think you do, too. Sure, they took some lumps from 4.0, but that was their own fault - it wasn't because Pathfinder stole their business; they just gave it away. Well, now they'd like it back, along with all the other people who never left. They are neither separating nor underdoging - they're just continuing to be the top dog. And I guess we'll see if their customers decide that's true or not.

  6. It's a nationwide thing, especially with D&D 4 essentially dormant for well over a year.

    WOTC survives because it's the Magic the Gathering company, a game that probably makes up a quarter of the entire game trade. WOTC is winning at hobby gaming. D&D is a rounding error in that calculation, and if it didn't have a potentially lucrative rights attached to it (movies, electronic games), it would be done.

  7. Ha - "D&D is a rounding error" in WotC's calculation - very nice; I'm stealing that one. :) Completed agreed! But I still think that their brand would be considered by most as the top dog, and that Pathfinder is still playing the underdog game (well). "D&D" is what was mentioned on Big Bang Theory, it's in the newspapers, it's the de-facto name of "those role-playing games" to many. That may not be everything, but it's a lot.

    WotC hasn't been pumping money into supporting their existing game, but presumably that cash has gone into supporting their new one. I don't know; I am in too small a bubble to really see I'm sure, but I wouldn't be surprised if they came out of their cocoon (5E) much prettier than before (4E), and I don't really think "playing the underdog" is their secret. I think it's "telling everyone you're still the 500 lb gorilla," but not by beating up the little guy - but by just being there.

  8. They lost their position when it wasn't supposed to be possible. Can they simply come back? How would that be done? If you don't believe in the Law of Leadership, all they need to do is "business as usual." If you do believe in it, or you aren't sure, then they need to reclaim their brand in an unorthodox fashion, which is what I'm saying they're doing right now.

    This is fun to watch because we really don't know what's going to happen.

  9. According to ICv2 rankings of top 5 roleplaying games, Pathfinder has been outselling D&D in retail hobby/game.comic shops across the US since 2011 quarter 2.

    If you want to see the rankings, here's a good list of all of them


  10. That's an awesome link, thanks for sharing! I guess another way to interpret that data is that D&D was always on top until they stopped fully supporting 4e so they could create 5e. This left a hole, into which Pathfinder stepped. This whole was about 3 years wide, which is huge for a market that is probably only a few decades old (and big bumps have come in the last two decades). But at the same time, it's similar to the hole left when 2e stopped being as fully supported, except that hole was much, much bigger - and D&D still came back to absolutely dominate. I don't have the data to show what stepped in back then, but I will go out on a limb and guess that White Wolf did a good job. And as White Wolf's market began to wane, 3e came out and won everyone back again.

    I guess I'm just still seeing a pattern of a product life cycle that occasionally leaves holes - more of a "lack of a good D&D game" hole, as opposed to "Pathfinder crushed their competition" hole. Pathfinder seems like more of its success is based on a marketing failure of D&D, just like other games in the past - once again making Pathfinder the "underdog" here.

    But that's definitely all a perspective that is debatable at best, and wildly off-target at worst.

    Also another interesting chart on EN World is their "what gamers are talking about" chart, which currently has D&D 5e at 70% of the total. That's not sales numbers, but it does seem like it a reasonable market indicator. (Sorry no link.)

  11. I expanded on this more on my post below, but I'm reminded of the World War II song, "we did it before, and we can do it again..." :)

  12. People talk about what's new and most serious Pathfinder players in my store are also buying the new Player's Handbook. Every respectable gamer who wants to be up on the hobby will buy the PHB, regardless of what they're playing.

    As for the narrative of market share and dominance, time will tell. I was talking about the coming dominance of Pathfinder when D&D 4 was on top, but it was clear the tides were turning, even when the game was fully supported.

    The point of the original marketing perspective I'm proposing is that shouldn't have been able to happen. You don't get sloshing around between top brands in a mature market. That just isn't possible unless something very odd is happening.