WotC Hasbro's CEO Reports OGL-Related D&D Beyond Cancellations Had Minimal Impact

Hasbro held a quarterly earnings call recently in which CEO Chris Cocks (who formerly ran WotC before being promoted) indicated that the OGL controversy had a "comparatively minor" impact on D&D's revenue due to D&D Beyond subscription cancellations. He also noted that D&D grew by 20% in 2022 (Magic: the Gathering revenues grew by an astonishing 40% in Quarter 4!)

WotC as a whole was up 22% in Q4 2022.

Lastly, on D&D, we misfired on updating our Open Gaming License, a key vehicle for creators to share or commercialize their D&D inspired content. Our best practice is to work collaboratively with our community, gather feedback, and build experiences that inspire players and creators alike - it's how we make our games among the best in the industry. We have since course corrected and are delivering a strong outcome for the community and game.

 

[Justice and Rule]

This has been nagging at me and I wanted to respond:



Because incompetence and/or stupidity* alone are sufficient to explain what happened, but malice and/or evil alone are not. Occam's Razor and all.

*Stupidity in the sense that they did something stupid. I'm not accusing the Hasbro/WotC people of being stupid.

Uh, that proof isn't a proof, but merely a bold assertion... and one that in modern times, feels woefully inaccurate. We live in an age where "the cruelty is the point" got coined for political policy actions, so acting like malice alone can't explain a decision I think misses the reality we live in.

Along with that, Hanlon and Occam are not substitutes for actual arguments. If we had no facts or context, maybe that would hold up. But we have the documents they released, as well as the Brink interviews. There's a pretty clear throughline, and to just default to Hanlon misses what we do know.

I think that's pretty naive and shows zero actual familiarity with "the corporate world," other than perhaps through interactions with Spirit Airlines' automated customer support. (From which it would be completely reasonable to conclude some sort of formal affiliation with Vecna.)

That's a cool story.

But I think your idea of what happened, that there was no malice involved, doesn't match up with the reality we see. Just watch some of the Brink interviews, where he talks about how he was clearly aware of the OGL stuff and was involved in discussion about it (he says he was both at the table and shielding the studio from these things) as well as his claim that they argued to raise the threshold for royalties. It beggars belief that Kyle didn't, at some point, bring up the obvious reasons and fallout that my come from doing this.

So to me, it comes off as incredibly unlikely that Wizards did not know how harmful these moves could be and how the community might react. In fact, I'd say it's practically unbelievable that they didn't have a reasonable idea of what would happen. Yet, they continued their path. It seems obvious to me that Wizards was just willing to take that heat to try and do it, especially given their response and follow-up.

At least, it seems more likely than Wizards stumbling into this situation like Mr. Magoo, not able to see the obvious. That just comes off as incredibly infantilizing to the corporate people there, as well as just ignoring what I am repeatedly told is a driving force behind their actions: money. They aren't a charity, or so I am told, so why would they care about the 3PP market beyond what they can get out of it? Their actions seem pretty clear: vassalize the market and give themselves direct control of it. Both OGL 1.1 and 1.2 are very clearly focused giving them that sort of power one way or another. Who cares if they get hurt, since it's not greedy to make as much money as they desire. I'm told that's the whole point, so why wouldn't they try it?

To me, the ignorance here isn't Wizards missing what the consequences would be, but simply thinking they could wait them out. And again, that happens all the time in the corporate world: companies weather the outrage, people forget and everything moves on.

Or am I being too naïve here?

 

[Hex08]

Also, I just do not understand describing the relationship between WotC and players in personal terms. For me, it is purely transactional. I'm not dating them. I don't care about their motives. I care about what they actually do or don't do.

Once, I think on these message boards, I expressed frustration that people could not separate the art from the artist. I was told by some that once they found out an artist, say JK Rowling, behaved in a certain offensive way it tainted the artist's work for some people. I find nothing wrong with that point of view (or it's opposite) and am willing to accept and understand that some feel that way. I also accept that some are able to separate the two. Everyone picks their own battles. For some people motivation matters (and maybe it should for more of us).

Businesses are not independent entities, they are run by people and made up of people. If the business is acting like a jerk then that's because a person or people within that organization are acting like jerks. If an artist can taint their work based on their behavior then I don't see why a business should be viewed any differently.

 

[mamba]

This is the thinking that I am flummoxed by, and I don’t mean that disrespectfully in any way. But I am flummoxed precisely because the events in January WAS them doing it again!

what events in January, the interviews (aren’t they a February thing, not sure when the first one was…)?

I guess I just have a different take on them. To me what Kyle is saying makes more sense than ‘WotC turned evil and wanted to kill all 3pps’.

I can see them wanting to protect themselves from Facebook or Disney, coming up with a ludicrous way to do so / angle they thought this would take and miss the forest for the trees (the actual impact on 3pps).

Any way I look at the OGL debacle, I see no upsides WotC gains by eliminating 3pps. You can argue maybe the target were VTTs, but that does not add up either to me (for one, the VTTs already are not using the OGL). In addition, WotC does not really need to hobble the competition, they can throw so much money at it that no one (of the existing VTTs) can compete.

I always saw this as as much of a defense of the 3pps as a step of taking the gun away from someone that was about to shoot themselves in the foot with it.

 

[Iosue]

But I think your idea of what happened, that there was no malice involved, doesn't match up with the reality we see. Just watch some of the Brink interviews, where he talks about how he was clearly aware of the OGL stuff and was involved in discussion about it (he says he was both at the table and shielding the studio from these things) as well as his claim that they argued to raise the threshold for royalties. It beggars belief that Kyle didn't, at some point, bring up the obvious reasons and fallout that my come from doing this.

So to me, it comes off as incredibly unlikely that Wizards did not know how harmful these moves could be and how the community might react. In fact, I'd say it's practically unbelievable that they didn't have a reasonable idea of what would happen. Yet, they continued their path. It seems obvious to me that Wizards was just willing to take that heat to try and do it, especially given their response and follow-up.

At least, it seems more likely than Wizards stumbling into this situation like Mr. Magoo, not able to see the obvious. That just comes off as incredibly infantilizing to the corporate people there, as well as just ignoring what I am repeatedly told is a driving force behind their actions: money. They aren't a charity, or so I am told, so why would they care about the 3PP market beyond what they can get out of it? Their actions seem pretty clear: vassalize the market and give themselves direct control of it. Who cares if they get hurt, since it's not greedy to make as much money as they desire. I'm told that's the whole point, so why wouldn't they try it?

To me, the ignorance here isn't Wizards missing what the consequences would be, but simply thinking they could wait them out. And again, that happens all the time in the corporate world: companies weather the outrage, people forget and everything moves on.

Or am I being too naïve here?

I would not say naive, but I think you're seeing the situation with the benefit of hindsight. I have no doubt WotC expected some pushback, but I don't think anyone was prepared for the degree of the pushback and the solidarity of the community. For example, Wizards announced in December that they were going to introduce a morality clause, royalties, and that 1.1 would not apply to VTTs and video games. And what was the response? A few people complained. There were some fiery threads on it in the various community fora, but on the whole there was no big backlash, no boycotts. So it wasn't like it was these specific conditions that got people up in arms. And when you look beyond just the vocal participants in community fora, to the fan-stomer base as a whole, I don't think it would have been hard in 2022 to make the case that changes in an OGL that would not even effect the majority of creators, let alone the non-creating fan-stomer base, would not really make waves.

I think they were more concerned from pushback from the major 3PP, since they were the ones most likely to be affected by the changes. Thus, the term sheets that offered better deals than the base OGL 1.1. And thus the quiet delay in announcing OGL 1.1 after nobody signed, or indicated willingness to negotiate, their term sheets.

IMO, I think a lot of WotC's actions make some sense if you assume that for many of the internal stakeholders, their understanding of the OGL was in practical terms the "OD&DL". They weren't looking at it from an Open Source or Open Gaming philosophy. They weren't taking into account Dancey's lofty words about "freeing the game." They weren't even thinking about non-D&D OGC. It was to them no more and no less than a license to use D&D rule content, "open" only in the sense that anyone could take the offer. Everything about how they structured and talked about OGLs 1.1, 1.2 and 2.0 points to that. That's the incompetence side of things (or more accurately, their blindspot on this matter.)

And finally, I think it's safe to assume that WotC did not go into this assuming that their unreleased documents would get leaked, which no doubt both affected community response and their own internal timelines.

 

[Clint_L]

But what did this business do, exactly? Flirt with revoking IP rights that they had previously shared, and then completely reverse themselves after they faced a backlash.

Okay. The former is standard corporate behaviour; the only thing that made it noteworthy is that they ever shared the IP rights to begin with. The latter is...exactly what we want corporations to do, isn't it? Back down from doing the bad thing and change their policy in accordance with our demands?

So I don't get the particular outrage now that they've backed down. They did what we wanted. If you are still upset with them you must be REALLY upset with just about every other corporation, because almost all of them do worse things and never back down.

What, exactly, is the incentive to compromise and give in if our response is to continue to vilify them? This just seems like outrage for the sake of outrage.

 

[mamba]

So to me, it comes off as incredibly unlikely that Wizards did not know how harmful these moves could be and how the community might react.

agreed, to a degree. I assume they underestimated just how godawful the terms were and did not expect everyone to walk away.

However, what if WotC thought they should do this anyway in an effort to protect themselves, despite this hurting 3pps rather than because it does?

At least, it seems more likely than Wizards stumbling into this situation like Mr. Magoo, not able to see the obvious. That just comes off as incredibly infantilizing to the corporate people there, as well as just ignoring what I am repeatedly told is a driving force behind their actions: money.

there are more forces than just money that corporations consider, always

They aren't a charity, or so I am told, so why would they care about the 3PP market beyond what they can get out of it?

but that is the point, they get a lot out of it thanks to it existing. They get nothing out of it and in fact do damage to themselves if it were eliminated.

Their actions seem pretty clear: vassalize the market and give themselves direct control of it. Both OGL 1.1 and 1.2 are very clearly focused giving them that sort of power one way or another.

I’d say 1.1 and 1.2 differ drastically in that regard. 1.1 was a forced sublicense of the content to WotC, registration and fees. None of that was in 1.2, that one was closer to 1.0a than to 1.1

It had some issues of its own, but most of these would ordinarily be considered minor at best, but after WotC had just dropped the 1.1 bomb nothing was ordinary / no one trusted them

To me, the ignorance here isn't Wizards missing what the consequences would be, but simply thinking they could wait them out.

I think they could have actually waited them out if they were so intent on it. As you said

that happens all the time in the corporate world: companies weather the outrage, people forget and everything moves on.

Or am I being too naïve here?

I don’t think that is the word I would use, cynical, jaded, paranoid all feel like a better fit

 

[Bill Zebub]

Uh, that proof isn't a proof, but merely a bold assertion... and one that in modern times, feels woefully inaccurate. We live in an age where "the cruelty is the point" got coined for political policy actions, so acting like malice alone can't explain a decision I think misses the reality we live in.

Along with that, Hanlon and Occam are not substitutes for actual arguments. If we had no facts or context, maybe that would hold up. But we have the documents they released, as well as the Brink interviews. There's a pretty clear throughline, and to just default to Hanlon misses what we do know.



That's a cool story.

But I think your idea of what happened, that there was no malice involved, doesn't match up with the reality we see. Just watch some of the Brink interviews, where he talks about how he was clearly aware of the OGL stuff and was involved in discussion about it (he says he was both at the table and shielding the studio from these things) as well as his claim that they argued to raise the threshold for royalties. It beggars belief that Kyle didn't, at some point, bring up the obvious reasons and fallout that my come from doing this.

So to me, it comes off as incredibly unlikely that Wizards did not know how harmful these moves could be and how the community might react. In fact, I'd say it's practically unbelievable that they didn't have a reasonable idea of what would happen. Yet, they continued their path. It seems obvious to me that Wizards was just willing to take that heat to try and do it, especially given their response and follow-up.

At least, it seems more likely than Wizards stumbling into this situation like Mr. Magoo, not able to see the obvious. That just comes off as incredibly infantilizing to the corporate people there, as well as just ignoring what I am repeatedly told is a driving force behind their actions: money. They aren't a charity, or so I am told, so why would they care about the 3PP market beyond what they can get out of it? Their actions seem pretty clear: vassalize the market and give themselves direct control of it. Both OGL 1.1 and 1.2 are very clearly focused giving them that sort of power one way or another. Who cares if they get hurt, since it's not greedy to make as much money as they desire. I'm told that's the whole point, so why wouldn't they try it?

To me, the ignorance here isn't Wizards missing what the consequences would be, but simply thinking they could wait them out. And again, that happens all the time in the corporate world: companies weather the outrage, people forget and everything moves on.

I'm confused. Where is the malice?

Sure, it's not altruism, either. But the absence of altruism isn't malice.

Is that all you mean? That they aren't willing to put some kind of "greater good" about a hobby involving elves and dragons above money? Is that your threshold for evil?

Or am I being too naïve here?

I think so. I think, unless I'm misunderstanding your argument, that you hold businesses to a standard that is admirable but completely unrealistic. There is not a publicly held company on the planet that would meet those standards. Most privately held companies, too. (There are a few exceptions, for instance Patagonia.)

 

[Justice and Rule]

I would not say naive, but I think you're seeing the situation with the benefit of hindsight. I have no doubt WotC expected some pushback, but I don't think anyone was prepared for the degree of the pushback and the solidarity of the community. For example, Wizards announced in December that they were going to introduce a morality clause, royalties, and that 1.1 would not apply to VTTs and video games. And what was the response? A few people complained. There were some fiery threads on it in the various community fora, but on the whole there was no big backlash, no boycotts. So it wasn't like it was these specific conditions that got people up in arms. And when you look beyond just the vocal participants in community fora, to the fan-stomer base as a whole, I don't think it would have been hard in 2022 to make the case that changes in an OGL that would not even effect the majority of creators, let alone the non-creating fan-stomer base, would not really make waves.

This is actually an interesting point, but I think the real reason for this is that the statement was released 4 days before Christmas and most people were checked out of this sort of news until the holiday season ended. And I'd probably say that was a bit of the calculation there.

I think they were more concerned from pushback from the major 3PP, since they were the ones most likely to be affected by the changes. Thus, the term sheets that offered better deals than the base OGL 1.1. And thus the quiet delay in announcing OGL 1.1 after nobody signed, or indicated willingness to negotiate, their term sheets.

I dunno if they were worried as much as they thought they could lock them in more quickly to deals by a carrot-and-stick approach. Once you get some big companies on board, you can ratchet up the feeling of "inevitability". I also think that they wanted to get this done before the community caught on for rather obvious reasons.

IMO, I think a lot of WotC's actions make some sense if you assume that for many of the internal stakeholders, their understanding of the OGL was in practical terms the "OD&DL". They weren't looking at it from an Open Source or Open Gaming philosophy. They weren't taking into account Dancey's lofty words about "freeing the game." They weren't even thinking about non-D&D OGC. It was to them no more and no less than a license to use D&D rule content, "open" only in the sense that anyone could take the offer. Everything about how they structured and talked about OGLs 1.1, 1.2 and 2.0 points to that. That's the incompetence side of things (or more accurately, their blindspot on this matter.)

I would largely agree! But I think that kind of feeds into the idea I keep putting forward: that they wanted to essentially "vassalize" the 3PP market. If you are unfamiliar with the game or the politics of the community, it doesn't make sense that you have a bunch of people running around with alternatives to your version of the rules, making stuff before you can and occupying market share that could be yours. If you have to make massive profits in the coming years, best to bring this whole thing under your control, and do it before it becomes a problem for your new, upcoming edition.

And finally, I think it's safe to assume that WotC did go into this assuming that their unreleased documents would get leaked, which no doubt both affected community response and their own internal timelines.

Yeah, that probably didn't help. That sort of dramatic thing with a ticking clock attached probably helped wake people up a bit to what was happening as well. I do think a big part of the backlash is that this whole thing came across like it was trying to be done behind the community's back (again, they made their press release days before Christmas) and that definitely helped stir up emotions.

But what did this business do, exactly? Flirt with revoking IP rights that they had previously shared, and then completely reverse themselves after they faced a backlash.

Okay. The former is standard corporate behaviour; the only thing that made it noteworthy is that they ever shared the IP rights to begin with. The latter is...exactly what we want corporations to do, isn't it? Back down from doing the bad thing and change their policy in accordance with our demands?

So I don't get the particular outrage now that they've backed down. They did what we wanted. If you are still upset with them you must be REALLY upset with just about every other corporation, because almost all of them do worse things and never back down.

What, exactly, is the incentive to compromise and give in if our response is to continue to vilify them? This just seems like outrage for the sake of outrage.

Because that's not how "trust" works. When you do something sneaky and underhanded, it colors people's view of you, and if you back out under pressure, people just think you did it because you were pressured. And let's be honest: they'd be right.

Wizards doesn't get any credit for backing out because they had already caused a lot of harm to the community by even just announcing it. That they switched courses is good, but they also did that because we yelled at them. To regain the trust of the community, they have to do good stuff unprompted. Even then, it'll still take time because, again, that's just how "trust" works: it takes years to earn and seconds to break.

agreed, to a degree. I assume they underestimated just how godawful the terms were and did not expect everyone to walk away.

However, what if WotC thought they should do this anyway in an effort to protect themselves, despite this hurting 3pps rather than because it does?

Again, to me I think those in charge didn't want a 3PP community like we see it. I think you don't go about changing the OGL (and changing it like this) if you aren't dead-set on basically setting fire to what has been built around you. And I think that makes sense if you have a bunch of people who are looking at it from a purely profit-driven sense: you don't want alternatives to your rules supplements out there, or at least not ones you can't readily control.

there are more forces than just money that corporations consider, always

Sure, though in this case I think it's the simplest one to ascribe as a justification.

but that is the point, they get a lot out of it thanks to it existing. They get nothing out of it and in fact do damage to themselves if it were eliminated.

Yes, we know that. I think Kyle Brink also knows that. I think that other people in the room don't like other people being able to play in their playground and don't have high-falutin' ideas about D&D as a community. Instead, they see it as a detriment and impediment from them completely controlling their space. They had been thinking about this for a while (Again, thank you Kyle Brink!) and the timing would indicate that they were trying to put enough of a gap between 1D&D and this that outrage would have died out and memories would have faded. to me, I think

I’d say 1.1 and 1.2 differ drastically in that regard. 1.1 was a forced sublicense of the content to WotC, registration and fees. None of that was in 1.2, that one was closer to 1.0a than to 1.1

It had some issues of its own, but most of these would ordinarily be considered minor at best, but after WotC had just dropped the 1.1 bomb nothing was ordinary / no one trusted them

I definitely think that 1.2 was more subtle in how Wizards could exert control, but they still had that control. They were very firm on that being in there, and I remember many of us saw that as them showing where they were going to try and hold their line.

I think they could have actually waited them out if they were so intent on it. As you said

I don't think so.

I mean, okay, yeah they could, but I think they wisely saw it as being way more detrimental to a lot of big things for them coming up: they had a movie releasing in roughly 2 months and this story would absolutely get more and more play because that's exactly the sort of juicy narrative the news would want to hit. Plus I think doing this in the middle of the playtest threatened to taint 1D&D going forwards because it would just become inextricably linked to it.

And I think that's part of what the design team told them: that they were basically poisoning their newest product before it was released, and that the sooner they moved on from this, the better chance they had of eventually healing the rift and forgetting about it. With the profit targets they are trying to hit, they can't be limping when 1D&D comes out. So they swallowed a difficult pill and backed down.

I don’t think that is the word I would use, cynical, jaded, paranoid all feel like a better fit

Clearly I am a multifaceted man.

But while I do think I'm a bit jaded and cynical, not sure I'm paranoid. But I always enjoy these discussions with you.

I'm confused. Where is the malice?

Sure, it's not altruism, either. But the absence of altruism isn't malice.

Is that all you mean? That they aren't willing to put some kind of "greater good" about a hobby involving elves and dragons above money? Is that your threshold for evil?

It's not just the absence of altruism, but going back on a long-standing agreement with the community and destroying dozens of creators in the pursuit of a buck that anyone (and I'm sure a few did) could have told them would end up losing them money rather than gaining.

Not all evils have to be great evils. There are petty ones as well. To me, this is a very petty, mundane evil.

I think so. I think, unless I'm misunderstanding your argument, that you hold businesses to a standard that is admirable but completely unrealistic. There is not a publicly held company on the planet that would meet those standards. Most privately held companies, too. (There are a few exceptions, for instance Patagonia.)

I don't think that my standards are all that unreasonable. I think your standards might be too low if you can just brush off Wizbro's actions with a "Well, that's what happens."

 

[Parmandur]

There are a few exceptions, for instance Patagonia

Yeeeeeeeeeaaaaaaaaaaaahhh, maybe less than they want you to think.

 

[Bill Zebub]

Yeeeeeeeeeaaaaaaaaaaaahhh, maybe less than they want you to think.

I guess to be more precise, the former owner of Patagonia, Yvonne Chouinard, did an incredibly altruistic thing. I haven't followed what the trust he set up has done with the company since then so you may be right.

Chuck Feeney's story is another example of what is possible when a company is privately held. (I worked for him indirectly and shook his hand exactly once. I have nothing but respect for him.)

EDIT: But I bet, with enough information, one could find an example, and maybe even lots of examples, of things that happened under Chuck's leadership that some would consider evil. Canceling a contract after a vendor has invested in supplying that contract, laying off employees in order to outsource, racial/gender bias in promotions, etc. I don't know what they would be, but I'm sure they're there. I guess it depends on how perfectly, across all dimensions, you expect an organization to behave in order to count as non-evil.