Gizmodo Reveals OGL v1.1's 'Term Sheet' Carrots For Selected Publishers

In December, WotC arranged meetings under NDA with a number of prominent third party 5E OGL creators in order to persuade them to sign up to the new Open Game License v1.1. before it was revealed to the world.

Part of this approach included 'Term Sheets'. According to Gizmodo, which has sources at Wizards of the Coast, these term sheets offered:

• A 15% instead of 25% royalty
• Marketing on D&D Beyond (but not at times when WotC had its own releases)

It's not clear whether any publishers actually signed the contract at the time.

WotC has since walked back some of the terms in the upcoming OGL v1.1, but the OGL v1.0a still remains slated for 'de-authorization'.

According to an anonymous source who was in the room, in late 2022 Wizards of the Coast gave a presentation to a group of about 20 third-party creators that outlined the new OGL 1.1. These creators were also offered deals that would supersede the publicly available OGL 1.1; Gizmodo has received a copy of that document, called a “Term Sheet,” that would be used to outline specific custom contracts within the OGL.

These “sweetheart” deals would entitle signatories to lower royalty payments—15 percent instead of 25 percent on excess revenue over $750,000, as stated in the OGL 1.1—and a commitment from Wizards of the Coast to market these third-party products on various D&D Beyond channels and platforms, except during “blackout periods” around WotC’s own releases.

It was expected that third parties would sign these Term Sheets. Noah Downs, a lawyer in the table-top RPG space who was consulted on the conditions of one of these contracts, stated that even though the sheets included language suggesting negotiation was possible, he got the impression there wasn’t much room for change.

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gizmodo.com

 

[Reynard]

I thought those NDAs expired on January 4th?

Those NDAs may never expire.

 

[Morrus]

Well then, just sign the sweetheart deal! /s

Well that's the point -- WotC chose a select few who were offered that deal.

 

[Haplo781]

It's been even more obvious than that if you look at history. OGL1.1 was the second try at this kind of thing after a 8-9ish year cooling off pause.

Spoiler: history

video jumps to relevant timestamp

15 years, and the GSL was nowhere near as onerous as this naughty word sandwich.

 

[UngeheuerLich]

I'\d be very uncomfortable operating under a licensing regime where I knew WotC was giving a significant advantage over me to my direct competitors.

They would pay 15% of their revenue.
You would not.
You could create your own tools. Thy might not be allowed.

So I don't know if that is fair. But it certainly was not good enough for most of the people who did show up at the meeting.

 

[Reynard]

They would pay 15% of their revenue.
You would not.
You could create your own tools. Thy might not be allowed.

So I don't know if that is fair. But it certainly was not good enough for most of the people who did show up at the meeting.

He's talking about two publishers both operating under the OGL 2.x, but one of them getting the sweetheart deal.

 

[Morrus]

They would pay 15% of their revenue.
You would not.
You could create your own tools. Thy might not be allowed.

So I don't know if that is fair. But it certainly was not good enough for most of the people who did show up at the meeting.

No, I meant if I (or anyone else who wasn't offered the sweetheart deal) signed the v1.1. we saw, with the 25% royalties, knowing that a bunch of my competitors were only paying 15% and getting marketed by WotC.

(I had the same objections to their DMs Guide 'Adepts' program, though that kind of petered out and I've never used DMsG as I like Kickstarter).

 

[UngeheuerLich]

15 years, and the GSL was nowhere near as onerous as this naughty word sandwich.

That is not totally correct.
The first GSL disallowed you from selling anything that was under OGL except for your backstock.
So the GSL was a lot more binding, now that the OGL grandfathers in OGL 1.0a stuff.
And I am not entriely sure if it the old OGL 1.1 disallowed it either... we have never seen the ecact wording, have we?

 

[Haplo781]

That is not totally correct.
The first GSL disallowed you from selling anything that was under OGL except for your backstock.
So the GSL was a lot more binding, now that the OGL grandfathers in OGL 1.0a stuff.
And I am not entriely sure if it the old OGL 1.1 disallowed it either... we have never seen the ecact wording, have we?

Both 1.1 and 2.0 deauthorize the 1.0a. The GSL never attempted that.

 

[UngeheuerLich]

No, I meant if I (or anyone else who wasn't offered the sweetheart deal) signed the v1.1. we saw, with the 25% royalties, knowing that a bunch of my competitors were only paying 15% and getting marketed by WotC.

Oh. Yes. I see. It did not cross my mind, that you would sign OGL 1.1, even hypothetically...

 

[Abstruse]

So at a time when Apple, Google, and Valve are facing anti-trust lawsuits over their app/game storefront pricing structures, Wizards of the Coast thought it would be a brilliant idea to leverage their complete dominance in the market to the point they have no direct competitors in their industry to not only give a sweetheart deal to the largest crowdfunding website who is also for the first time facing real competitors while working in the industry with the largest market share on said crowdfunding site responsible for 25% of their revenue...but also offered sweetheart deals to the largest companies in the market trying to carve up a share of what is at the most favorable estimates 20% of the remaining market?

Can Wizards please stop doing inadvisable things before I've had my coffee?

 

[UngeheuerLich]

Both 1.1 and 2.0 deauthorize the 1.0a. The GSL never attempted that.

The question is, we don't know what deauthorization means.
Does it mean, you can't use it on new products, or do you have to strike it from your old books.

If it is the latter, it is akin to the GSL, but as far as I understood, it could just mean the former, which is way less erregious.

The GSL tried to force everyone 100% into the 4e ecosystem. If you signed, all your backcatalogue was suddenly trash.

 

[Morrus]

Oh. Yes. I see. It did not cross my mind, that you would sign OGL 1.1, even hypotherically...

Well, yeah, hypothetically.

 

[kenada]

Marketing on D&D Beyond but (presumably) not access to the platform to sell content? How generous of WotC.

 

[Haplo781]

The question is, we don't know what deauthorization means.
Does it mean, you can't use it on new products, or do you have to strike it from your old books.

If it is the latter, it is akin to the GSL, but as far as I understood, it could just mean the former, which is way less erregious.

The GSL tried to force everyone 100% into the 4e ecosystem. If you signed, all your backcatalogue was suddenly trash.

And 1.1/2.0 does that even if you don't sign.

 

[Abstruse]

Side note: That's 15% royalties on the use of Wizards of the Coast's IP. That would likely be in addition to a distributor's cut for being on D&D Beyond. So you're paying 15% to use the OGL and (based on DTR, Steam, etc.'s rates) likely another 25-35%.

 

[UngeheuerLich]

And 1.1/2.0 does that even if you don't sign.

This was never clarified. I am no lawyer and I did not read it that way.

I withdrew my subscription for exactly this clarification. Now that wotc clarified I am not that annoyed anymore.

 

[Morrus]

Side note: That's 15% royalties on the use of Wizards of the Coast's IP. That would likely be in addition to a distributor's cut for being on D&D Beyond. So you're paying 15% to use the OGL and (based on DTR, Steam, etc.'s rates) likely another 25-35%.

No, there was no mention of them selling it on DDB. Just some marketing assist.

 

[Alzrius]

That is not totally correct.
The first GSL disallowed you from selling anything that was under OGL except for your backstock.

That's not correct; the first iteration of the GSL prevented you from manufacturing and publishing any OGL versions of a given product line ("as reasonably determined by Wizards") that you converted to 4E and published under the GSL, but it didn't go further than that. So if you had an OGL series of products that were called "Mystic Earth," and you converted one to 4E under the GSL, you couldn't make any more "Mystic Earth" products under the OGL. You could still continue publishing OGL books that weren't part of that line.

Here's the relevant section of the original GSL:

6. OGL; Conversion

6.1 OGL Product Conversion. If Licensee has entered into the “Open Gaming License version 1.0” with Wizards (“OGL”), and Licensee has previously published a product under the OGL (each an “OGL Product”), Licensee may publish a Licensed Product subject to this License that features the same or similar title, product line trademark, or contents as such OGL Product (each such OGL Product, a “Converted OGL Product”, and each such Licensed Product, a “Conversion”). Upon the first publication date of a Conversion, Licensee will cease all manufacturing and publication of the corresponding Converted OGL Product and all other OGL Products which are part of the same product line as the Converted OGL Product, as reasonably determined by Wizards (“Converted OGL Product Line”). Licensee explicitly agrees that it will not thereafter manufacture or publish any portion of the Converted OGL Product Line, or any products that would be considered part of a Converted OGL Product Line (as reasonably determined by Wizards) pursuant to the OGL. Licensee may continue to distribute and sell-off all remaining physical inventory of a Converted OGL Product Line after the corresponding Conversion is published, but will, as of such date, cease all publication, distribution and sale (and ensure that third party affiliates of Licensee cease their publication, distribution and sale) of any element of a Converted OGL Product Line in any electronic downloadable format. For the avoidance of doubt, (a) any OGL Product that is not part of a Converted OGL Product Line may continue to be manufactured, published, sold and distributed pursuant to the OGL; and (b) this Section 6.1 will survive termination of this Agreement.

6.2 No Backward Conversion. Licensee acknowledges and agrees that it will not publish any product pursuant to the OGL that features the same or similar title, product line trademark, or contents of a Licensed Product.

6.3 Licensee Termination. In the event that any portion of a Converted OGL Product Line is manufactured or published by Licensee, or a third party affiliated with Licensee, after the first publication date of a Conversion, Wizards may immediately terminate this License upon written notice.

 

[UngeheuerLich]

Well, yeah, hypothetically.

And didn't you say, they asked you to speak woth them and you did not have time?
But lets just hope, the next deal is a lot sweater and available to everyone.

 

[Reynard]

Side note: That's 15% royalties on the use of Wizards of the Coast's IP. That would likely be in addition to a distributor's cut for being on D&D Beyond. So you're paying 15% to use the OGL and (based on DTR, Steam, etc.'s rates) likely another 25-35%.

Unless they are planning on dramatically expanding the SRD, it isn't a royalty on using WotC's IP so much as a royalty on being allowed to continue to support WotC's game line.