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.

Cancelled D&D Beyond Subscriptions Forced Hasbro's Hand

Swift consumer action prompted Dungeons & Dragons publisher Wizards of the Coast to to scrap licensing updates. The players aren't done yet.

gizmodo.com

 

[Ruin Explorer]

An entire industry will fall into the hands of a single judge. I hope that judge goes with the intentions of the original OGL.

I think, even if the judge doesn't, WotC will then need to argue specific copyright violations.

And there is absolutely no chance that goes 100% well for them.

A load of stuff that currently companies do treat as "belonging to WotC", and needing the OGL 1.0a is going to end up being ruled not WotC's copyright.

I suspect they would like to avoid that. The obvious out-of-court settlement would be to essentially concede that everything that was OGC under the OGL can be transferred to ORC or the like, assuming the originator wants that (and probably WotC would have to do it for their previous SRDs), as that would basically obviate the issue with deauthorizing the OGL.

 

[Psikosis]

I don’t believe it was intended to be palatable more that it was “this is what’s coming and this is the best offer you are gonna get” strong arming.

Sort of a “give this idea legitimacy by signing this now and we will give you this tiny concession”

Exactly. This was blatant strong-arming. Turns out Hasbro/WotC grossly overplayed their hand.

 

[UngeheuerLich]

Exactly. This was blatant strong-arming. Turns out Hasbro/WotC grossly overplayed their hand.

I am not sorry for that. Nice that our all hands together were stronger. Now lets wait and see, what wotc will do now.

Of OGL 1.1 is open enough, people will sign and use it to create content. People are people and make mistakes and not always do the right thing, but learning from mistakes is an important part of life. Denying people (even people at the top of big corporations) that is not a good thing.

 

[DMZ2112]

I still think the "under monetization" is a lack of official merch.

Oh, gosh, yes.

Where are my D&D toys? I was ever-so-slightly too young to catch them in the ’80s, and a new run was a hope I cleaved to as soon as Hasbro bought Wizards. I own every D&D KRE-O set I could find, but I couldn’t find hardly any, they were so poorly marketed. But it’s been par for the course. Where was Strixhaven when Harry Potter was at its peak? Why was the My Little Pony RPG outsourced? Whoever is/has been in charge of cross-marketing at Wizards has a lot of explaining to do.

It's not a videogame where if you're not in day 1 you're "behind" and you're going to be spammed with FOMO stuff. And there's not much upcoming to really induce FOMO either - some books I might have bought, but none I'll be mad not to have.

Worthless musing: I wonder if FOMO marketing has anything to do with why Volo’s GTM and Mordenkainen’s TOF are just gone, instead of relegated to the DM’s Guild.

 

[This Effin’ GM]

Oh, gosh, yes.

Where are my D&D toys? I was ever-so-slightly too young to catch them in the ’80s, and a new run was a hope I cleaved to as soon as Hasbro bought Wizards. I own every D&D KRE-O set I could find, but I couldn’t find hardly any, they were so poorly marketed. But it’s been par for the course. Where was Strixhaven when Harry Potter was at its peak? Why was the My Little Pony RPG outsourced? Whoever is/has been in charge of cross-marketing at Wizards has a lot of explaining to do.


Worthless musing: I wonder if FOMO marketing has anything to do with why Volo’s GTM and Mordenkainen’s TOF are just gone, instead of relegated to the DM’s Guild.

I just figured it was because they were reprinted as MMotM

 

[LuisCarlos17f]

I don't like any things by WotC but I support the idea of allow space for 3PPs in D&D Beyond. I can understand they want to make money, but some times you can get more if you know how to offer the right reward.

I guess Hasbro wants D&DBeyond to be something like the streaming service for TTRPG.

 

[Scribe]

Worthless musing: I wonder if FOMO marketing has anything to do with why Volo’s GTM and Mordenkainen’s TOF are just gone, instead of relegated to the DM’s Guild.

That has almost 100% have to be down to the lore contained. Which is amusing in some ways, as that lore they jettison is...branding.

 

[whimsychris123]

Imagine a world where WotC had offered to integrate and sell 3pp on D&DBeyond instead of this attempt to overthrow the whole industry. They would have had more people sign up for DDB subscriptions and could have received a commission for sales on their site. That would have furthered their goals of monetizing the brand and gatekeeping which 3pp received the most attention - all while creating goodwill with the community and other creators. Instead, they chose destruction. Sigh.

 

[Ruin Explorer]

Worthless musing: I wonder if FOMO marketing has anything to do with why Volo’s GTM and Mordenkainen’s TOF are just gone, instead of relegated to the DM’s Guild.

Personally, I don't believe it.

I think if they wanted that, they'd have hyped the hell out of it with like all caps "LAST CHANCE TO OWN!!!" banners and stuff.

On the contrary, they kept pretty much on the downlow, because the main reason Volo's was being retired was that it's an embarrassment. Specifically some elements of the lore are... not great. Like 1E not great. Maybe worse than 1E with Orcs. It was a bloody weird decision to go that way lore-wise at the time, and I think part of the "apology edition" deal that went too far.

Likewise I don't think they'll try FOMO on the 5E PHB/DMG/MM though I think they will also remove them from sale. They'll just say when they're going, then take them away.

 

[Tazawa]

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%.

Not the valuable portion of WotC’s IP. Not the Forgotten Realms, etc. that you can access through DMs Guild for 50% royalties.

Only the 5.1 SRD content you currently can use for 0% royalties.

And you still can’t claim compatibility with D&D or their latest release. And you still might need to pay fees to sell through D&D Beyond.

Also doesn’t say if your content could be integrated into the D&D Beyond rules content. D&D Beyond customers don’t buy unless they can add it to their character with a click. Likely that type of integration would require extra fees and giving up additional rights.

Not a good deal at all.

 

[Brightmane]

They're under NDA, so they can't comment.

In December, WotC licensing folks reached out to me for one of these meetings, but that didn't pan out.

I wonder how that NDA would have affect you being able to cover this news had made that meeting.

 

[MockingBird]

Imagine a world where WotC had offered to integrate and sell 3pp on D&DBeyond instead of this attempt to overthrow the whole industry. They would have had more people sign up for DDB subscriptions and could have received a commission for sales on their site. That would have furthered their goals of monetizing the brand and gatekeeping which 3pp received the most attention - all while creating goodwill with the community and other creators. Instead, they chose destruction. Sigh.

That's what I'm speculating on though. Like why didn't they leave the OGL alone, leave it as is. Then try to attract bigger 3pps who want to make 5e material by offering better than the standard terms for DMsguild. Just spit balling here but maybe say "Hey Kobold Press, come to DMsguild for your new 5e book. We will feature your book, make the royalties more appealing, and even invest a little into your product. If you agree we will even advertise your new book on Dndbeyond! Still not sure? Hey you can even keep publishing all your standard OGL stuff for as long as you want. Even better, after a year you can publish this new book outside of DMsguild. How does that sound?" All that just seems like a no brainer to me, but I'm no CEO of Hasbro so what do I know.

That's pretty much what I was getting at with this post.

 

[Tazawa]

The really significant part of the Gizmodo article:

"According to multiple sources, these immediate financial consequences were the main thing that forced them to respond....According to those sources, in meetings and communication with employees, WotC management’s messaging has been that fans are “overreacting” to the leaked draft, and that in a few months, nobody will remember the uproar."

This makes it clear that WotC is not changing course, just trying to play for time mitigate the PR disaster.

Hasbro has basically become the villain in one of their own cartoons: "You may have won today G.I. Joes, but you haven't seen the last of us!!!" /Shakes fist.

Although come to think of it, at least COBRA is willing to admit when they lost. The Hasbro version would be "You haven't won today G.I. Joes - we BOTH won. We never intended to fire the destructo-ray and are merely executing the retreat we planed ALL ALONG!" /Shakes fist.

They have to do this. If they don’t, their whole D&D Beyond strategy falls apart. They would have to admit that they vastly overpaid for D&D Beyond.

Taking a $146M write down less than a year after purchasing that asset would not be viewed favorably by the market. It might be a good time to consider shorting Hasbro.

 

[wingsandsword]

I am not sorry for that. Nice that our all hands togehter were stronger. Now lets wait and see, what wotc will do now.

Of OGL 1.1 is open enough, people will sign and use it to create content. People are people and make mistakes and not always do the right thing, but learning from mistakes is an important part of life. Denying people (even people at the top of big corporations) that is not a good thing.

WotC will stab us in the back, that's what.

Sorry, but they can't be trusted regarding the OGL anymore, not at all.

First, if they can just cancel it at any time on little notice, or amend it at will, then it's worthless for publishing because they can just come along later and pull your entire inventory out from under you. There's no faith that they won't do something dishonest or despicable with the OGL 1.1, because they already did it to 1.0a. Fool me once, shame on you. . .

Second, this morality clause they want about being able to remove content for being bigoted? Given how absurdly over-reaching some people get in calling things "racist" or "sexist" or other kinds of bigotry, people can find something in just about any gaming product to complain about. They've already been saying calling character races "races" is racist, or saying that giving a typical alignment to humanoid races is "racist". . .you think they won't use something like that to shut down a product they don't want to succeed? They could say that a dungeon with no ramps and only stairs is ableist because it doesn't have support for wheelchair-using adventurers. Remember the overwrought outrage about people saying that the old 1e Oriental Adventures was racist?

 

[wingsandsword]

They have to do this. If they don’t, their whole D&D Beyond strategy falls apart. They would have to admit that they vastly overpaid for D&D Beyond.

As opposed to their whole strategy for D&D falling apart?

 

[Voadam]

So now that is a moving goalpost.

Noone signed the OGL 1.1 too. But if you do compare both, compare the first issues that actually poisoned the relationship between fans and wotc at their respective times.

4e WotC poisoned fan relationships in many dimensions. The marketing attitude towards the 3e games people were playing. No 4e OGL material. The poison pill attempt to kill off OGL stuff. The terrible one-sided revised GSL license terms compared to the OGL. Yanking old edition PDFs so that there would be less D&D alternatives out there. No online free SRD for using 4e rules.

Under the revised GSL only a few signed on. Drivethru shows less than 500 PDFs tagged as GSL and there are a number of false positives.

Pathfinder came out after 4e, there are over 10,000 PDFs tagged as third-party Pathfinder 1e currently on DriveThru.

As a fan of 4e stuff the GSL was hugely disappointing. It would have been great to have it under the OGL with a decent SRD.

To the rest: it is a very different thing, if you have to cease selling your backcatalogue or if you can still reprint it.
I guess pathfinder rulebooks still sell well enough.

Yes, it would be worse if they could not do that.

Not making new stuff is bad too.

Without the royalties and right giving away and termination clauses, there might be no problem just releasing new stuff under 1.1...

Not from what we have seen. The license revision clauses are still issues similar to the GSL. Taking away the protections of the 1.0 OGL would be considered problems by many.

So again: rebelling against the OGL 1.1 was the right move. I think now that it is off the table,

1.1 De-Authorization is still on the table.

you should go back to the table and try to find a good agreement for all instead of burning the bridges which might harm everyone involved.

I agree. They are responding to cancellations so those should continue to push them to authorize a revised OGL with 1.0 terms that are explicitly not revocable or subject to de-authorization to enable continued use of OGL stuff while removing the threat of future WotC taking up that line of legal argument and threat again.

I like D&D. I like 5e. I like past versions and stuff for them. I want new OGL stuff. I want OGL stuff to continue, 5e has been thriving under the OGL and I do not want that to change.

 

[Tazawa]

As opposed to their whole strategy for D&D falling apart?

WotC/Hasbro leadership have painted themselves into a corner. They could save the D&D brand by abandoning this strategy, but they would lose their jobs and their options. So they’ll keep fighting until the end.

They’ve been incentivized to make bad decisions.

 

[Rabulias]

The status of OGL 1.0 and whether it is revocable or can be "de-authorized" will be decided in court. I believe there is ample evidence that supports the idea that the OGL is irrevocable. Not to go too far into politics, but I worry that if appealed up to the US Supreme Court, the court's current "pro-corporation attitude" will rule for Hasbro/WotC.

 

[Lanefan]

I heard that rumour too, but I assumed we'd have heard more from them if that was the case. I tried to look at the one they sent me (I neevr signed it as we didn't arrange a meeting) and it's not longer active for me to view.

Call me old-fashioned, but if someone doesn't give me something like this on actual paper that's a huge red flag.

The advantage of hard copy, of course, is that once you have it in your hand the sender can't make it vanish on a whim.

 

[pac71]

This is why I have taken the stand that not only will I not support OGL1.1, I will not support any product or service that does. This also includes OGL2.0, 3.0, x.0 regardless of how many backflips the WotC have left. If they decide to rejoin our community under ORC ... perhaps.