WOTC

I am a member of the Mystara group also, and this was posted to it. 
I'am not sure if it was sent to you guys, but I am forwarding it to the
spelljammer site in case anyone is interested.

"Following is a message posted by Peter Adkison, CEO of
WotC, in regarding to the future of TSR's product lines.
No mention of Mystara, unfortunatly, but there are a
few encourging comments in there.  Than again, anyone
can make a PR message look good...

Reposting without permission, hopefully it wouldn't
get me in trouble :)


   
By Peter D. Adkison, Janitor, CEO, and Acting TSR Brand Manager
mavra@???????.com

We are into the fourth week of the new marriage of TSR and WotC and I
figured you might be interested in my thoughts on what's happening out
here in Lake Geneva.

Basically things are going very well.  The TSR folk are great and we're
making a lot of new friendships.  I've even had the chance of playing
some
AD&D while I'm out here; I'm playing my 5th level female bard named Hope
in Ted Stark's campaign with Cindi Rice, Stan Brown, Lisa Stevens, Julia
Martin, and Cindi's and Julia's husbands.  So far no one in the party
has
tried to backstab me so I guess that's a good sign!

This week we finalized the schedule for the rest of 1997 and we're
cutting
purchase orders for new products and some backlist products.  Everyone's
excited to have the presses rolling again!  In fact, when the first
shipment comes to the warehouse we thought of running out to the trucks
with cookies for the drivers, a film crew, etc., "So, Mr. Truckdriver
(or
Ms. Truckdriver), how does it feel to be making the first big delivery
of
TSR products?  How was the drive in?  Did you have trouble with crowd
control along the way?"  Yeah, okay, so we're getting a little giddy out
here but that pretty much describes the mood right now.

Obviously it will take a few weeks to get products printed, assembled,
and
distributed.  The first backlist and new products should start showing
up
in stores in early August.  I think the first new product will be the
next
issue of Dragon Magazine.


BUSINESS STUFF

It is no secret that TSR has had severe financial difficulties in recent
years.  TSR has operated at a loss for almost three years, and even when
it was profitable it was only barely so.  If your image of TSR is that
of
a large, wealthy corporation swimming in money, you're in for a
surprise. 
TSR operates on a shoestring budget with employees who barely make a
living and for the most part are working on out of date computers, with
only nominal funds for marketing and promotions.

Our goal, of course, is to turn the business around and make it a
profitable enterprise. While we obviously have a duty to our
shareholders
to make a profit, we also have a similar duty to our customers and to
the
adventure gaming industry.  A financially healthy TSR will have the
strength to support gaming through a regular release of quality
products,
to support organized play programs like the RPGA, to attract new people
into gaming through advertising and promotions, and to take risks in
launching new lines that may or may not turn out to be long term
profitable ventures.

On the other hand, an unhealthy TSR causes damage to the entire
industry,
not just WotC shareholders.  During the six months that TSR did not
release any products sales went down dramatically not just for TSR, but
for everyone who participates in the TSR distribution--distributors,
retailers, mail order companies, and so on.  This caused retailers to
have
less cash flow for investments in other game products, possibly hurting
other manufacturers as well.

So now that we hopefully agree that it's to everyone's best interest to
turn TSR around to become a profitable business, we'd like to share with
you our plan for doing so.  We want you to understand the full picture
because we think you deserve to know.  You love this company as much as
we
do, so you are probably very interested in understanding this.

Making a business more profitable is fairly simple on paper.  You simply
need to find ways of increasing sales without increasing expenses by the
same amount, or find ways of decreasing expenses without decreasing
sales
by the amount.  We are considering the following initiatives to do this:

*       Reduce printing costs.  We plan to work very hard at reducing
printing costs by introducing a competitive bidding process instead of
having an exclusive arrangement with a single printer.  By doing this we
can always be assured of getting the best price possible on a given
product.  This should decrease expenses with no decrease in sales.

*       Returns and inventory management.  Many have speculated
correctly
that TSR suffered numerous financial setbacks from sales returns in the
book trade.  This is true, and these returns cost the company a lot of
money, particular if the product returned can't be resold at a later
date.
 We hope to manage TSR's inventory and sales volumes more precisely to
reduce the costs associated with sales returns and overstocking of
inventory.

*       Review product formats.  TSR has published products in a variety
of formats, including paperback books, hardback books, boxed sets, and
so
on.  Some of these products are more profitable than others, and some
are
barely profitable at all.  We will be examining this product mix to make
sure that each format stands on its own and is profitable in its own
right.  The company simply cannot afford to have some products that do
not
carry their weight.  This move may decrease sales because we make some
format changes customers don't like as much as the current format, but
if
we do it right it will decrease expenses even more.  For example, we
sold
a ton of Encyclopedia Magicas but lost money on every copy sold because
the cost of goods was so high.  That is why we changed formats for spell
compendiums.  Yes, the customer gets less for the same money, but that's
because the previous ones were priced too low.

*       Review product lines.  What was said in the previous paragraph
about types of products can also be said about some of TSR's product
lines.  We cannot have highly profitable lines like Forgotten Realms and
AD&D "carrying" poor performing lines.  If a product line is not
performing we should reduce our investments in that line to nominal
levels
and redirect that talent to supporting a line that has more promise.  In
some cases perhaps a line is flailing but needs more investment in it. 
We
will be examining the TSR product lines on a case by case basis,
regularly, through customer surveys and reviews of sales data, to try
and
determine where our best investment opportunities are.

        All that said, we do have a saying around here: "lines never
die,
they simply go into hiatus for a while."  We will never completely give
up
on a line.  Rather, we hope to do what Disney does with old properties:
bring them back every once in a while for a new treatment and revival.

*      Price increases.  We are considering some moderate price
increases
on a number of products.  We understand that this will not be a popular
development, but the fact is that most products do not sell in high
enough
volume to warrant a low price.  The roleplaying industry is small,
yielding only a few thousand sales of products that often take 1-2 years
to develop.  Because of this the profitability of the entire industry is
dangerously low.  The price of roleplaying products simply has to go up
if
the adventure gaming industry is to remain viable.

*       Smaller staff.  With TSR operating as a product group within
WotC
there are a number of jobs that can be eliminated.  We don't need two
legal departments, two accounting departments, and so on.  This will
lower
expenses related to administrative functions mostly, and help somewhat
in
sales, marketing, and international functions as well.  The need for
game
designers, developers, editors, and graphic designers will remain
constant
since this type of work is not subject to the same types of economies of
scale.

In some areas we plan on spending more money, not less.  We plan on
spending more on market research and marketing.  With increased
expenditures in market research we hope to make more accurate decisions
on
what types of products to develop, how much to produce, and how to
promote
it.  With increased expenditures in marketing we plan to invest
primarily
in organized play activities like the RPGA, conventions, and other
support
for grass roots play.  With marketing and market research these
additional
expenditures will hopefully pay for themselves with increased sales.


TSR PRODUCT LINES

Of course everyone wants to know what product lines we plan to support
aggressively versus ones we plan to keep low key for possible revivals
downstream.  Overall we will base these decisions on consumer
interest--which is typically expressed in sales.  Here's a summary of
where we stand on the key lines.

AD&D Core, Forgotten Realms, Dragonlance:  These are great product lines
with strong sales.  We will certainly continue to invest in these.

Planescape, Ravenloft:  These are great product lines but with modest
sales.  We believe they can be managed profitably and we plan to do so.

Birthright, Spellfire, Dragon Dice:  These lines are built on intriguing
concepts, but sales have been weak.  We have some ideas that we will be
trying during the second half of this year to see what we can do to
build
up these lines.  If those ideas don't work we will let the lines slip
into
hiaitus for a while and consider relaunches at a later date.

Greyhawk:  There seems to be a lot of pent up demand for bringing
Greyhawk
back.  We are giving this serious consideration.

Alternity:  This is an amazing product with great potential.  We are
delaying the launch til 1998 so that it can be better supported through
marketing at the time of launch.  As a gamer  you may not value
marketing,
but as a publisher I can tell you that the days of launching a new game
and hoping it grows on its own are long gone.  If this game is going to
have the chance it deserves it's going to have to come out with a well
planned launch program.

Dragon, Dungeon, Polyhedron:  These are excellent publications that,
even
though they don't really make money, are important products for
supporting
TSR customers and products.  We will continue all these magazines.

Novels:  The book publishing department at TSR is an excellent,
efficient
operation that produces some outstanding fiction.  We will continue to
invest here, and the novel lines will generally overlap with the game
lines, with occassional exceptions.

Dominia Campaign Set:  We of course are seriously considering the
possibility of publishing an AD&D campaign setting for Dominia, the
universe Magic: The Gathering is set in.

Other lines:  There are some other TSR properties that are not currently
supported but are mentioned frequently in e-mails and such by gamers;
Dark
Sun is an excellent example.  We will be doing some market research to
test awareness and interest, and based on those studies and our own
thoughts about where we think the exciting prospects are we will
consider
relaunch options.


GROWTH OPPORTUNITIES

In addition to making TSR a profitable business once again we hope to
grow
the TSR business as well.  We see the following activities as avenues
for
directing our growth efforts:

*       International markets.  International sales represent only
10-20%
of TSR's worldwide sales.  International should be in the 50-60% range.

*       Invest in new lines.  We must continuously make investments in
the
development of new games and campaign settings.  The creation of new
properties is the heart and soul of a gaming company and is critical for
long term profitability.  Our next big push will be the Alternity
science
fiction roleplaying game.

*       Electronic media.  We must develop a comprehensive strategy for
dealing with the internet and PC platforms.  TSR has tried doing its own
software development, and has done an extensive amount of licensing.  We
need to explore all options and develop a vision.


THE TSR STAFF

I consider it one of the greatest privileges of my life to have become
associated with the employees of TSR.  These are people who have
inspired
me personally through their integrity and committment to TSR.  In spite
of
the hardships they've seen in the first six months of the year, very,
very
few of them left the company.  They stayed on, steadily tending their
watch through the most turbulent times.  And after the acquisition,
those
who could not come to Seattle could have run off immediately looking for
another job, but instead, most of them stayed on right up through the
relocation to help with Gencon and insuring a smooth transition.  In my
years of running a gaming company I have seen many heroic efforts where
people put duty above all personal considerations, and this particular
case ranks among the greatest of those tales.


TARGET AUDIANCE

TSR made a strategic decision a number of years ago to target a younger
audiance in its marketing decisions and product content.  We are
reversing
that course.  We will market our games as serious products for a mature
audiance.  We do this not because we don't want young people to buy our
games, but because we believe that the young people who buy these games
are generally very mature for their age and take gaming as seriously as
adults. This doesn't mean we're going to go off the deep end and turn
the
line into a bunch of R rated products; it simply means that we will
assume
that our audiance is generally mature enough to handle serious topics
and
perhaps the occassional demon or something.  :-)


1997 RELEASE SCHEDULE

Here are the game releases planned for the rest of this year from TSR
(thought you might be curious).  Listed on each is the month they
"ship;" 
you'll probably see them in the stores the month after.

AD&D, Games: Tale of the Comet (Jul), Sea Devils Monstrous Arcana (Jul),
Evil Tide Monstrous Arcana (Aug), Of Ships & The Sea (Sep), Wizard Spell
Compendium II (Sep), Night of the Shark Monstrous Arcana (Oct), and Sea
of
Blood (Dec).  Novels: Tale of the Comet Novel (Jul).

Birthright: King of Giantdowns (Jul), Book of Priestcraft (Oct),
Tribes/Heartless Wastes Sourcebook (Dec).

Forgotten Realms: Powers & Pantheons (Jul), Lands of Intrigue Campaign
Set
(Aug), Castle Spulzeer (Sep), Four from Cormyr (Oct), Prayers from the
Faithful (Nov).  Novels: Harpers #15 Finder's Bane (Jul), Shores of Dusk
(Aug), Passage to Dawn (Aug, reprint), Council of Blades, Nobles #5
(Sep),
The Simbul's Gift, Nobles #6 (Oct), Elminster in Myth Drannor (Nov),
Realms of the Arcane (Nov), Tymora's Luck (Dec).

Planescape: Faces of Evil: Fiends (Aug), The Great Modron March (Sep),
Dead Gods (Oct), Planar Powers, The Blood War Trilogy #3 (Jul), Pages of
Pain (Dec).

Ravenloft: Domains of Dread (Jul), Forgotten Terror (Sep), Ghosts (Nov). 
Novels: Lord of the Necropolis (Oct).

Dragonlance: Heroes of Defiance (Jul), Fate Cards Deck (Aug), Last Tower
Adventure (Oct), Heroes of Sorcery (Nov).  Novels: Lord Soth (Jul), The
Day of the Tempest (Aug), Vinas Solamnus King (Aug), The Wayward Knights
(Sep), Fistandantilus Reborn (Oct), Tales of Uncle Trap-Springer (Nov),
Dragons of Chaos (Dec).

Dragon Dice: Manual (Aug), Kicker #6 (Sep), Kicker #7 (Dec).  Note that
these releases are tentative.

Marvel Super Dice: Starter Set (Oct).

Spellfire: Dungeon! Booster #12 (Aug).

Periodicals: Dragon every month, Dungeon every other month, Polyhedron
every other month opposite Dungeon starting in October.


BUILDING BRIDGES

One of the things I've been working on personally is building bridges
and
mending fences, that is, trying to improve relationships with some of
the
people who used to work here but don't anymore.  I've had conversations
with Dave Arneson, Gary Gygax, Zeb Cook, Margaret Weis, Tracy Hickman,
and
so on.  It is too early to tell where these discussions will lead, but
I'm
cautiously optimistic that we will be able to work with some of these
people once again.

We're also doing some things to improve relations with the art
community. 
There is a storage area here with a bunch of original art, which we're
returning to the artists to did the paintings.  We will also grant back
certain rights to artists, like the rights to do prints and
retrospective
works.

Overall everyone has been friendly and excited about the new marriage
between TSR and WotC and are hopeful for the future.  I for one
certainly
plan to have a helluva lot of fun in the coming years!"