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.

 

[mamba]

DMSGuild is 50%. OBS is about 30% (depends on some factors I'm not familiar with).

the 30% for OBS are not a license fee though, that is similar to Valve’s Steam or Apple’s app store, ie a service fee.

You can argue the 20% on top of it for DMsGuild are a licensing fee, but for that you get to use WotC’s IP, which the OGL does not allow, so that still does not justify that rate for the OGL.

 

[Justice and Rule]

They are a cost. The lawyers around here will tell you that the amount of WotC's legal fees incurred so far are substantial. My guess (uninformed) is that they are approaching 7 figures in costs so far. And it will go higher before settlement. WotC brought in the big and expensive guns to quash this as thoroughly as possible. That isn't cheap.

That doesn't make them a threat to Wizards, though. They cost money, but they are no threat to Wizards, certainly not with anything they do. And nothing they are doing now would have prevented that anyways, and definitely not after what they've done in their backtracking.

Also I'm not quite sure they have costed Wizards over a million dollars, but I am also fairly uninformed on how much this sort of lawsuit actually costs. Then again, doesn't Hasbro have a dedicated legal department, or am I wrong on that?

I don't think of it as trust. But rather faith in humanity. I chose to believe that most people will try to act and make individual decisions in a moral and ethical way given their understanding of the situation and the knowledge they have. Others do not need to have this viewpoint. But my belief in this viewpoint makes me what I think is a better person than if I don't have this viewpoint.

I mean, faith in humanity is a kind of trust, isn't it? But yes, I think we agree on this.

 

[Parmandur]

yes, the basis being revenue I understand, but the 25% is 3 to 5 times a normal rate from my understanding / what was said in some other post. Maybe it is when the licensee can use the licensor’s IP, but that is not the case here…

You did not comment on WotC getting a free, perpetual, irrevocable sublicense to your work that they can further sublicense… is that still par for the course?

What about being able to change the terms at any time? I doubt they can change at all in closed licenses (outside of renewals…)

So no, even if 25% is normal, which I am not sure it is, this still is draconian.

Based on the chatter I saw from people who negotiated licensing deals, 15-25% is normal, which happens to match the spread between the custom deals on offer and the DMsGuild license fee. And yes, "you cannot sue us if we make something similar with our IP" is also normal, as are escape clauses. From a general IP businpoint of view, yes, this was generous.

 

[mamba]

And yes, "you cannot sue us if we make something similar with our IP" is also normal, as are escape clauses. From a general IP businpoint of view, yes, this was generous.

To me a ‘you cannot sue us for making something similar’ clause is not the same as providing a free sublicense.

So at best we now have something that is common and at the higher end for the fee despite not actually licensing the WotC IP.

At that point you can maybe say it is not uncommon, but it certainly is not generous either. Unless you consider the offer to license to be generous in and of itself.

 

[Parmandur]

To me a ‘you cannot sue us for making something similar’ clause is not the same as providing a free sublicense.

So at best we now have something that is common and at the higher end for the fee despite not actually licensing the WotC IP.

At that point you can maybe say it is not uncommon, but it certainly is not generous either.

I'm not speaking to being objectively generous or not, I'm speaking to how the executives with experience in software and toys would view it: and I honestly believe they would have thought they were putting a good deal out there, even if some in the room were calling the alarm out. Thinking in character, it makes total sense.

 

[mamba]

I'm not speaking to being objectively generous or not, I'm speaking to how the executives with experience in software and toys would view it: and I honestly believe they would have thought they were putting a good deal out there, even if some in the room were calling the alarm out. Thinking in character, it makes total sense.

I’d accept that if they were totally unaware that the OGL 1.0a existed for 20 years.

If this were WotC’s first attempt at an open license, maybe some would have embraced it.

It was not however and you cannot tell me that whoever decided that 1.1 was a good idea either 1) did not know this, 2) considered the terms ‘good enough’ when compared to 1.0a, 3) expected the revocation of 1.0a would just be shrugged at by the 3pps and players.

Well, I guess that is what you are telling me, the facts bear that out, and ultimately I agree, but that is why I said they acted highly irrational Just because they are convinced of something does not mean they are correct about it.

 

[Parmandur]

I’d accept that if they were totally unaware that the OGL 1.0a existed for 20 years.

If this were WotC’s first attempt at an open license, maybe some would have embraced it. m

It was not however and you cannot tell me that whoever decided that 1.1 was a good idea either 1) did not know this, 2) considered the terms ‘good enough’ when compared to 1.0a, 3) expected the revocation of 1.0a would just be shrugged at by the 3pps and players.

Well, I guess that is what you are telling me the facts bear that out, and ultimately I agree, but that is why I said they acted highly irrational Just because they are convinced of something does not mean they are correct about it.

Consider that the major decision makers are all new to WotC: the Senior VP of D&D does play the game, but he is new to the company. Ig orange of the OGL and it's significance seems overwhelmingly likely, though the plausible scenario based on what happens indicates to me that somebody at WotC was making the right arguments, and got people to listen when the stuff hit the fan.

 

[mamba]

Consider that the major decision makers are all new to WotC

and that is why you have other people in the room… if you are new to this, then maybe you should listen to the people with more experience, even if you are technically the boss.

Also, if this started two years ago, it started before these guys joined, so they did not come up with this nonsense, they just did not squash it.

So who does this leave, Chris Cocks?

 

[Parmandur]

and that is why you have other people in the room… if you are new to this, then maybe you should listen to the people with more experience, even if you are technically the boss.

Also, if this started two years ago, it started before these guys joined, so they did not come up with this nonsense, they just did not squash it.

So who does this leave, Chris Cocks?

If something took 2 years, it was a slow burn which probably involved a lot of arguments. All I'm saying is, it makes sense to me that a reasonable person may have thought theybwere offering a good deal.

 

[mamba]

If something took 2 years, it was a slow burn which probably involved a lot of arguments.

yes, this was definitely not something with daily meetings. Still, I am curious who got this idea on the table…

All I'm saying is, it makes sense to me that a reasonable person may have thought theybwere offering a good deal.

and that is where you are losing me

I agree that given the evidence / actions, they must have considered it a reasonable deal. I do agree that they are not idiots.

I do not agree that a reasonable person who did their ‘homework’ would have considered this to be a good deal given the circumstances. That is why I said they acted highly irrational, you cannot be that and reasonable at the same time…