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

 

[overgeeked]

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.

Exactly why I prefer printed books over PDFs and subscriptions plans.

 

[dbolack]

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

Emphasis mine:

Is this a known fact, or simply assumed?

 

[UngeheuerLich]

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?

Although I share some of your concerns, I for my part can't look into the future and know what is in the new OGL 2.0.

I am not that paranoid and actually think, that being thoughtful about what you wrote down seems a good idea.

What was not considered racist, even progressive 30 years ago might be racist in hindsight. So while you should look at everything in the correct way and honour old things, you should not write some them today.
I am seeing a lot of movies or series today that I really liked 30 years ago and they make me cringe today...

So lets just say: I can see pros and cons for both sides of the argument. It is not all good and evil.

 

[UngeheuerLich]

Emphasis mine:

Is this a known fact, or simply assumed?

Probably as much of a fact as some other statements here.

We are still in speculation mode...

 

[Abstruse]

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.

The DMs Guild has two fees built in. I can't remember if it's 25% to DriveThru/OneBookShelf and 25% to WotC or if it's 30% to OBS and 20% to WotC off the top of my head. Either way, it's part licensing fee to access WotC IP that isn't covered by the OGL and part distribution fee to OBS.

But I was simplifying to make the point I was making. I've been talking about this whole thing constantly for a week and a half and I'm getting tired of explaining the exact same things over and over again (just a statement of fact, not meaning to be disparaging or insulting, I really need like a week in a blanket burrito right now), so I skipped over some details because I figured people on EN World would know the full context of what I meant.

 

[Abstruse]

Emphasis mine:

Is this a known fact, or simply assumed?

D&D Beyond claimed almost 10 million users last spring before the purchase and Wizards of the Coast stated...crap I can't remember and can't find the EN World article right now but it was either 14 million or 16 million back around October (give or take a month) during a shareholder presentation. I think it was the one before the infamous "undermonetized" one.

 

[dbolack]

In the Roll for Combat Dancy interview, he points out that a few years ago some venture capitalists dug into Hasbro and discovered that essentially all the value in the company was coming from WotC and that got everyone -- board included -- finally noticing WotC.

I suspect this is an overstatement. What I would expect is meant is that a large part of the stable/consistent value is in WotC and that one or more of the most consistent high performers are inside WotC's bag of goodies. Toys can be a fickle market and Zuru has been eating their lunch.

 

[OB1]

Emphasis mine:

Is this a known fact, or simply assumed?

Last month saw 14M page visits and they have 10M users, so yes.

 

[Von Ether]

I think on a certain level it's not just about making a paywall to make more money -- it's about control.

The product has been on the rise for 10 year and the only time it took a nose dive when someone messed with the OGL before. It is the only way someone can assume the OGL was a poison pill of some sort.

 

[Abstruse]

I suspect this is an overstatement. What I would expect is meant is that a large part of the stable/consistent value is in WotC and that one or more of the most consistent high performers are inside WotC's bag of goodies. Toys can be a fickle market and Zuru has been eating their lunch.

It's not. It was part of the shareholders presentation from Hasbro going back to 2021. Wizards of the Coast was responsible for 75% of the profits for the entire company in 2020. It's why they moved Wizards of the Coast to a top-level division on par with their Consumer Products (that would be every toy and board game Hasbro makes) and the Entertainment division (all the movies and TV including Transformers, GI Joe, My Little Pony, Peppa Pig, etc.). I don't have numbers for 2021 that I can find in a quick search, but the revenue recline for that year was less than the company overall so it's likely that Wizards represents somewhere around the same percentage of profits this year.

That's why there was a proxy war in 2022 over control of the Board of Directors at Hasbro. An activist investment group wanted Hasbro to spin off WotC to its own company to pay higher dividends to shareholders rather than use the profits from WotC to invest in the rest of the company.