We recently had the opportunity to sit down with Wizards of the Coast CEO Greg Leeds to talk about the state of the industry and what’s happening at the company. In Part 1 of this two part interview, we talk about the state of the market, the role of retailers, the new direction for Dungeons and Dragons, and what’s going on with product and media licensing of WotC brands. In Part 2, we talked about the Kaijudo launch. This is the full version of the interview; a partial transcript was published in Internal Correspondence #80. 
How do you see the state of the hobby game market and Wizards of the Coast’s place in it here in the second half of 2012?
The state of the hobby gaming market is very healthy, and Wizards’ position in the market is very healthy. We have been focusing on a strategy to make sure that the hobby game stores that invest in building the industry get the financial benefits from the communities that they build. And from my vantage point that strategy is working for Wizards; it’s working for the industry. The good retailers out there are growing their business. They’re becoming more profitable, and they’re investing back into acquiring new players into the industry. So it works for the stores and it works for us. 
From the outside it seems that both of your major channels (mass retail and hobby retail) are growing robustly. Has there been any change in the proportions between those channels in the last few years?
No. That is one of the things that we strive to have is growth across all channels, because we believe that the customer wants to experience our brands in a variety of different places.  We think that having multiple experiences enhances the total. There’s a synergistic effect among digital, mass, hobby game. Hobby games stores will always be the core of our business (that’s where the communities get built and strengthened), but by having experiences in other channels the whole number of people, the whole size of the community, grows, and it benefits everybody.  
Specifically what we’ve seen is almost exactly even growth across digital, mass and hobby. So, for example, the Magic business has doubled and it’s doubled everywhere.   So far that approach is working for us and we think it’s working for retailers as well.
Over the last few years we’ve really seen the development of a new kind of brick and mortar game retailing that is more defensible against online competition. Specifically, it emphasizes community, interaction in the store and in-store events as opposed to the store being just a place to go buy stuff. Can you talk about how Wizards of the Coast is nurturing that development?
Yes, absolutely. It has been a core goal and I need to be humble on behalf of my company, but I think Wizards has been a very strong advocate for what you just described. For stores to be successful in the future working with brands like Wizards’ brands, they need to provide entertainment experiences that are at least as good, if not better, than all the things our customers can do on a Friday or Saturday night. It’s not good enough to have the best game (which we already do), we have to have experiences where customers say, “This is more fun than going to see a great movie, to a restaurant or a club, or even more fun than going out on a date.” [laughter]
Obviously you’re going through a big change with Dungeons & Dragons. What are you trying to accomplish with this new version of D&D?
D&D Next is Wizards’ opportunity to unite all the D&D players of the past, create a welcoming game for new D&D players of the future, and bring everybody together to enjoy the best of  D&D: that’s the heroic adventure, the imagination and the storytelling.
Do you think the roleplaying game category can be as significant a contributor as board games or card games in terms of overall volume?
Well, I don’t know if it can be as significant a contributor in dollar terms.  I think in terms of relationship with the property, it can be extremely strong, and it can be a foundation for the experience people want to have with their brands in a variety of different ways, whether it be entertainment experiences (like television or films one day); digital game experiences; or even other publishing-type experiences like comic books.   I’m not sure the exact relative size of the two, but the roleplaying game is a core component of D&D and always will be.    
Digital is obviously a big part of what you do. Is the relationship between digital and paper games going to change with D&D Next?
In general the relationship between the paper game and the D&D digital games will get stronger and stronger, so D&D Next will be one step forward in that evolution. Specifically what I mean by more and more integrated is that the storylines and the themes will be tied in more closely than they have been in the past. D&D is about people controlling their own adventure, using their imagination, creating their own stories, creating their own destinies, but at the same time they love to get content and materials that inspire them in those stories. So we’ll make sure that the digital and the paper side have similar content to allow people to more seamlessly move from one platform to another.
A year we asked about Avalon Hill (see “Interview with WotC CEO Greg Leeds—Part 2”) and you said at that time you were more focused on Magic and D&D. Any plans for expanding the focus on Avalon Hill?
We still support Avalon Hill pretty aggressively. We come out with new releases every year. We’re working on something that I can't specifically talk about for a 2013 launch. We’re not ready to announce it yet, but we’ll continue to focus and develop Avalon Hill to large degree.
There’s been a pretty good response to comics based on both Magic and D&D. Do you see those as a two-way street? Are you trying to bring new people to the brands or do you see more it as another way to monetize the brands for people who are already involved with them?
It’s definitely a two-way street. To some extent many of the readers of the comics are Magic and D&D players, and they love to read more stories. To another extent, by offering those comic book stories, we introduce the brands to new audiences. We know we bring in future players just through their first engagement by reading comic books because that’s their platform of choice. So it’s definitely a two-way street.
Any other licensing initiatives for any of your brands that we should know about?
There’s a couple of things going on now that I’m not ready to talk about, but we are seeing more and more interest from a variety of potential licensees to take both D&D and Magic to other merchandise areas. There’s one in particular that we‘re hoping to finish up shortly and we’ll let you know when we’re able to talk about that.
What about media licensing? We ask every year and it’s always in the works. Any change there?
Yeah, it’s always in the works and it still is. I guarantee you we have a very strong office in Los Angeles run by our Hasbro film people and I can say discussions are underway. I may have said that in past years, but I can say that they still are and we’re hoping to get news as soon as we can.
Anything else you want to communicate to our readers about what’s going on at Wizards of the Coast?
Yes. Wizards continues to be 100% committed to developing the financial health of the hobby game retailing industry. All of our policies of the past and our policies of the future are designed to bring as many new people into stores as possible. As you recall, a few years ago we changed the format of our Premier Play in Magic to move more of the play in stores. By that we allowed retailers to reap more of the financial benefits by having a good, strong Magic community. We have strong promotion policies that encourage people--drive them--into stores to create big events. We believe that we’ve just begun. We think there’s lots of opportunity for the stores that we talked about earlier to be able to provide entertainment experiences that are second to nothing else out there that’s available to our audience.
Click here for Part 2.