The 5 Reasons Evil Hat Is Going Under

The way they couched it you might think "Oh they're selling dice, they're selling card games, they're selling magazines, they're selling novels, they just didn't make as much profit as they th..."

Nope. About a month after GenCon they are operating at a loss:

It's not a large company and multiple people have gotten laid off. 

Now you may be wondering: "Is this surprising? Do indie RPG companies really make that much profit?" In 2018, yes. Yes they do*.

Evil Hat started in 2000. Rob Donoghue and Fred Hicks took the FUDGE system (which was open-game license and had been around for about 8 years) and turned it into Fate--a more narrative-based system which they used to power the Dresden Files game and pulpy hit Spirit of the Century and then went on to a wildly successful Kickstarter with Fate Core. Based in Maryland irl (all along I think), they hung out in mainstream and narrative-leaning RPG circles online. Both indie and mainstream RPG developers know and get along with them and the company has only grown up until now--as has the RPG industry.

So: something has legitimately gone wrong at Evil Hat. This is a diversified company that has respectable nerd licenses, a rabid fanbase, and Fate--a game so popular in online circles the refrain "Have you tried Fate?" is a cliche so cliche even pointing out it was cliche stopped being funny a year ago.  This shouldn't have happened.

Let's take a look at why it did...

You may be thinking "Oh but you're an artist so of course you think..." No.

The main difference between the RPG stuff in these blog entries, which are free, and the books I make out of them that pay James Raggi's rent is one thing: the art.

The difference between Uno (a fabulously successful card game in the '80s) and Crazy Eights (a nearly identical game which you can play with any deck of cards) is art, the difference between Exploding Kittens (one of the most successful Kickstarters in history) and either of these games is, largely but not entirely, the art.

What made Warhammer its own fantasy franchise competing with D&D while Runequest and Tunnels and Trolls struggled to stay afloat is the art. The difference between the Warhammer 40k universe and every other military SF game (there were hundreds if you check the ads in old Dragon Magazines)--and in fact what makes you kind of feel like "military SF game" is a sort of weird description of Warhammer 40k, is the art. (Yes, miniatures are art.) Warhammer (a tweaked D&D on a d100 system with critical hits) made Games Workshop so big it became an entire gaming company so big that it has its own chain of stores.

Vampire, Rifts, Shadowrun, Pathfinder--the big games have/had big and distinctive artists.

Art, of course, makes the product look nice and feel like a collectors' item but it also does something else, it projects information to the reader, like:

a) This game has a distinctive style, making it like/unlike other games

b) The creators have a sensibility which does/doesn't line up with mine

c) The creators invested effort in this game

d) The worldbuilding has an implied depth to it

Evil Hat has always had problems here. It's not that they didn't ever hire competent artists, it's that the people hiring them didn't really have a sense of what to do with them.

With the best will in the world: even Evil Hat fans do not go around talking about how stunning the images in it are. Evil Hat has a fanbase eager to praise every single aspect of its design, business and marketing online and yet the only praise (or even discussion) I've seen Evil Hat's art ever getting was for depicting diverse casts of characters, which: that's basically a standard thing in RPGs now and even when it wasn't that's a pretty easy bar to leap once you're asked.

Even accepting that Fate is a universal system on purpose and therefore distinctive art would be a challenge (nobody ever picked up a picture and went "That's so Fate!" but then again nobody did that with GURPS either):

Dresden Files was based on novels, Evil Hat did nothing to expand or solidify that world visually.

Blades In The Dark managed to do A and B but there wasn't very much art, it wasn't in color and most of it didn't do much more than the standard Storygame/DeviantArt "Take a photo of some guy, jack up the contrast, glue a gear on it" standard. So it fell down hard on C and D. You may like or dislike that setting but the art and aesthetics refer to other things that it hopes you like, too rather than helps create the world and make you go "Oooh, I need to know more about this part".

Atomic Robo (like other poor-selling indie games Mouse Guard and Marvel Heroic) had great art--but it was all from the licensed property--so fans could get it without buying the game. And in the case of something as niche as Atomic Robo, they probably already had it. The art wasn't doing any new work.

Say what you want about 40k, but the visual of, say, a chainsword does a lot more than go "Ok, you're playing a sci fi game". Even if your sensibilities lined up with Evil Hat's, the art wasn't dragging you to new places, and if RPGs need anything, it's that.

While excitement about the licenses or the flexible system may be enough to bring in fans of that license or of online RPG discussion, outreach to new audiences is nigh-impossible without good art.

Let's assume every Dresden Files fan who wants to play an RPG is going to find the Dresden Files RPG--besides that, Evil Hat's main product is Fate.

Fate is a universal system, so you can't sell it on the setting, and the art is forgettable, so you can't sell it on that. So you're left selling it on the system itself--and the Fate Core kickstarter found many online RPG fans eager to do just that.

But the strength and weakness of system-centric online fans eager to shell out cash is they are...system-obsessed online fans eager to shell out cash. 

They're always looking for a new system. If they write their own, they're not buying yours and unless yours is the newest one, they're not buying yours either.

Without getting too far into game-design inside baseball, the fact is someone who wants 

A Generic Narrative System With Few Mechanical Penalties For Failing To Problem-Solve, Some Narrative Control And Lots Of Sliders For Emulating Random Pre-Existing Genres they can play pbta ("powered by the apocalypse"--games derived from Apocalypse World) or Cortex (a Fate-like system with regular dice developed for a romance RPG).

Pbta is The New Hotness and therefore will vacuum up a good chunk of online system-obsessive fans and Cortex was used on the Marvel Heroic RPG--that game came out right around when the first Avengers movie did, reached into the mainstream, and gave lots of newly-minted superhero fans and lapsed gamers a chance to discover that they didn't like Generic Narrative Systems With Few Mechanical Penalties For Failing To Problem-Solve, Some Narrative Control And Lots Of Sliders For Emulating Random Pre-Existing Genres.

Let's assume for the sake of argument Fate does what it does very well. So did Steve Jackson Games' GURPS and Chaosium's Basic Role-Playing--neither were enough alone to keep their respective companies afloat.

What did they do? Diversify. But there's a problem with that..

Just the facts:

-Neither Fred Hicks nor Rob Donoghue have written much for their own company in years. They often speak about being more managers now than creators.

-None of the writers or artists they have hired are people whose names exactly ring out in RPG circles or inspire massive fan support (Ken Hite was tangentially involved in Bubblegumshoe and indie darling John Harper did BitD, but Hat just distributes that game). None of the workhorse authors have built up any fanbase.

-Online, neither Fred nor Rob much talk about playing any of these games very often or talk in any detail about their content. That thing where someone at a game company (anyone: Monte Cook, Mearls at D&D, James at LotFP, the folks at Chaosium) casually say on social media "When I first read ____ in what so and so turned in I was like _____! Y'all are gonna be amazed at what they cooked up". Fred and Rob's main passions online appear to be business management tips and the same progressive politics retweets as the rest of us.

-A major part of their business is shipping people different kinds of Fate dice (which is fine, but its not exactly an in-depth creative vision here).

-Considering the size of the company and the amount of online support, Evil Hat winning fewer and fewer fan awards every year is surprising.

-Considering the size of the company, it's surprising how little they're willing to pay their talent  compared to smaller companies.

-Fred Hicks has openly said that the products they put out (even ones that do win awards) don't have a long tail and don't sell more and more copies each year...

(and no, this is not true for all indie games, there are many indie RPG products where awards do move the needle and they do sell more and more copies the longer they're out).

Quality is subjective, of course, and I have no way of knowing for sure how much Rob Donoghue and Fred Hicks care about what they're putting out. But every sign I've seen suggests: not that much.

In order to run a small creative business which is in constant contact with a fan base, you don't just have to be comforting, useful, and send the boxes on time, you have to communicate (and have) a strong vision of what you are doing that nobody else is. What is Evil Hat about? What's the big image? A bunch of dice with plusses and minuses? That gorilla that they put everywhere? Otherwise there's 200 other tightly-run nerd companies out there willing to tweet "black lives matter" just as many times as you are.

Steve Jackson games got themselves out of Generic System Limbo with Munchkin--and someone there cared about that game--the art and the writing are by someone deeply invested. Chaosium will always have Cthulhu and Runequest, and they have been able to find authors deeply invested in horror--and they have Greg Stafford. Fate fans love the company's scrupulously polished image of non-problematicness but...that's a list of things Fate doesn't do, not a list of things it does.

The writing in Evil Hat books is something even the Evil Hat fans complain about. The entire virtue of the Fate system, other than being narrative, is its simplicity and yet the authors signally have a really difficult time communicating that simplicity.

Evil Hat can move people: The Fate system excites an online fanbase that wants to play it and tell you to play it, Fred Hicks' and Rob Donoghue's loud and frequent support of normal liberal ideas excites an online fanbase terrified that a secret racist might be hiding under their game table. The writing does not excite anyone.

While neither Donoghue nor Hicks talk a lot about writing or reading and should perhaps not be judged as people based on how well they write, the fact is when you're in the RPG business, not to mention when your books are being read by people who are fans of the actual novels they're based on and the main competition in your niche is pbta and Vincent Baker's clear, fan-friendly prose, and your main competition outside your niche is winning writing awards literally every year this is a problem--and one they are signally unwilling to shell out money to freelancers to solve.

You may be forgiven is this gushy heckload of prose blinds you to the fact that "Take care of your peeps and your peeps will take care of you" is also the mafia's motto.

Fred Hicks has been very explicit about his marketing strategy. When asked how Evil Hat became so successful: they spent 10 years online making friends. 

There's nothing wrong with friends, of course, or even networking--but there's something very wrong with putting Taking Care of Your Peeps above all else when those peeps become the engine of an endless right-wing harassment campaign that culminates with you being forced to accuse the only good writer who ever worked for you and a Jewish guy of being Nazis--thus legitimately costing game folks whose names you don't even know their livelihoods.

Despite the vast marketing potential of friendship, Rob and Fred have never had much stomach for what most smart people try to do online in RPG communities: discuss stuff that matters to them.  They peace out whenever discussions become serious or difficult:

...being neither "smart enough or calm enough" to have the conversations that characterize the community you sell your game in is not a great trait in someone who is designing games, but it's a million times more dangerous in someone whose whole marketing strategy is trying to start conversations that end with "Hey look at what we made" with people who are actually affected by these issues and know way more about them than than you.

There are probably Fate fans who know nothing of Rob and Fred's online activities, but the core of their fanbase is people who do and who engage and sympathize with the desire to snipe at other peoples' projects and then flee. That is: the worst people in the RPG community. And it has paid dividends: Fate fans, authors and Evil Hat associates and employees are an RNC-worth of toxic names in the RPG sphere, up to and including open transphobes and trolls like fucking Ettin:

Business on the indie scale isn't just about moving product--it's also about striking people with talent and wherewithal as the kind of people worth working with, recommending, supporting and signal-boosting. 

Rob Donoghue added me on social media long before I had any idea who he was, and yet whenever Fred or Evil Hat's friends started spreading toxicity his response was always no response. Not disagreement, not defending them, just--total stonewalling, avoiding the issue, obliqueness, using the distance technology provides to refuse to be a person.

This behavior will get you a fanbase--because all the other people who want to relay signals that put you on the right team without giving a second's thought to the content of those signals will like you. All the other straight white cis-guys who talk a blue streak about diversity while funneling money into the hands of two straight white cis-guys will nod and smile and Like. But if literally nobody honest or smart is willing to work with you or claim what you do is good, that puts a ceiling on what your company can do. This might not be true with a bigger company or another industry, but this a small scale and a creative field, both as creators and humans you have to be able to offer potential partners something of real substance or they can just move to the next cottage nerd property.

Maybe nobody cares about that stuff and it's all inside baseball, but if you sponsor the biggest RPG forum, run constant banner ads on the other, and can get hundreds of fans to retweet your most workaday political snark and yet they not only won't pay for product but won't even vote for it in a fan award once they bought it, something's wrong.

When your Peeps work themselves into a position where they betray every value you sell yourself on as a company and when the targets of your Peeps' ire turns out to be the diverse progressive creative community that you claim to want to be part of, maybe reconsider who your Peeps are.

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*Evidence:

...and that's just from LotFP, just one payment and at the time LotFP was exactly one permanent staff member and at the smallest table you could get at GenCon, selling nothing but game books and t-shirts.