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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[Olgar Shiverstone]

No retreat. Never give up; never surrender! Keep up the pressure!

 

[This Effin’ GM]

Hopefully there was more to the term sheets than those crumbs. If that was it, they were basically saying "we won't screw you over quite as much as other people - now we'll pause for you to heap thanks and praise upon us". The only thing that might have made that palatable is if they opened up their product identity and made it more like a licensing agreement. Then they might be earning their 15% cut.

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”

 

[Incenjucar]

Hard to see the carrot for all the sticks, but yeah that would have been a start.

 

[Ruin Explorer]

Another good one from Linda Codega/io9.

Catching WotC in a public lie here is just delicious. We knew they were lying from what people had said, but now we have proof.

And 15% holy crap how INSULTING! Do WotC even know what a sweetheart deal is?! No wonder no-one signed! That's still enough to vapourize your razor-thin profit margins! Being promoted on Beyond is cute, but "only when WotC doesn't have a product"? How would that even work? WotC is promoting a product on Beyond almost 24/7. There are occasional gaps of a week or three, and what, we'd have like 10 different 3PPs (assuming 10 signed) competing for those narrow little slots? Pfffft.

 

[Kinematics]

Given the terms, I find that very hard to believe. It was a ludicrously bad offer, and reducing royalties from 25% to 15% would not make it good or even tolerable.

But how many of them would predict the level of backlash that occurred when the community found out about it? If the outcry was small and easily outlasted, and they didn't sign the 15% royalty deal, they'd be stuck with the even more horrible 25% deal.

I would not be surprised if some signed up, no matter how much they hated it. It would depend on how much their business needed to keep up with WotC's newest content, vs feeling like they could get away with staying on 1.0a. Unless they were also told about the de-authorization of 1.0, in which case it was about how well they could divorce themselves from D&D entirely.

I do not envy the people who had to be in that meeting. Hopefully they could put it off til they talked to their lawyers, and then not much happened over the holidays, so they didn't get trapped.

 

[darjr]

The VERY best time to be promoted is when you have a product that synergizes with a new D&D release! WTH?!

See the Dragonlance release as a prime example with releases on DMSGuild.

Do they not realize?

Wait I think maybe they do and now I think I know what they think of those, at least the suites.

 

[OB1]

Maybe I'm not getting something, but a 15% cut on revenue above $750k to be on the DDB platform and gain access to it's millions of monthly users seems like a seriously good deal. Playstation, for example, charges a 30% cut of 1st dollar revenue to 3rd party developers to be on its platform. Same with the App and Play stores. The 1.1 release sent with these contracts was clearly meant to be part of a negotiation process (and WotC definitely overplayed their hand here) but I'd guess that a company could have talked them down to between 7 and 10 percent.

This confirms my suspicion that what WotC was trying to do was establish DDB as a gaming platform. Looks like they'll be competing with ORC now, which is a good thing for competition and the growth of the industry.

 

[Ruin Explorer]

Hopefully they could put it off til they talked to their lawyers

One of the biggest red flags possible in business is if someone tries to make you sign something without letting a lawyer look at it.

Most of the 3PPs are run by serious/reasonable people, so would never sign in such circumstances.

WotC, whilst behaving like wankers right now, and issuing infantile comments (particularly in the OGL 1.1), are not so dumb they'd try that, I think.

Most likely they effectively had until either the 4th or the 13th, before plans changed.

 

[Ruin Explorer]

Maybe I'm not getting something, but a 15% cut on revenue above $750k to be on the DDB platform and gain access to it's millions of monthly users seems like a seriously good deal.

You're making a huge assumption rather than missing anything.

That is that being advertised on the DDB == Being available on the DDB.

I think if it was the latter, that would have been mentioned specifically. Also, let's be real, if WotC was guaranteeing availability on the DDB, someone would have signed, and it looks awfully like no-one did. My guess would be they'd just be essentially directing people to DM's Guild or some other WotC store which then had a FURTHER charge on it.

So even if was availability on DDB, it would like have been $15% over 750k aaaaaaaaaaaaaaaaaaaaaaaand WotC gets 30-50% of the total sales revenue at all amounts.

 

[UngeheuerLich]

I would say, most publishers would have gotten about 85% more of my money, had they accepted the deal, as acces through dndbeyond would be a major boon...
I hope they can still get the carrot under less of a stick...