DarkKestral
First Post
I suspect the question is not "was it good?" but "was it optimal?" In other words, was there another option that would make WotC more money in the long term? I think the easiest way to look at that would be to compare risks and rewards WotC takes in licensing the 3rd party commercial publishers via the OGL and the GSL, and the third option of keeping their system to themselves and not licensing it out to 3rd parties at all.
Remember, the purpose of the OGL and GSL are to let WotC selectively publish books in a way designed to maximize profitability per book, but more generally profitability as a whole. In the book trade, this is best achieved by printing high margin, large run, long-term, low development cost products. In the RPG sector of the book trade, this is generally best typified by rulebooks, most often core books, though rule-based splats aren't generally too far off from this ideal either. Setting splats are farther, and at the deep end are specialized rule books with a small likely userbase and adventure modules. So really, to gauge whether or not the OGL and GSL are effective or will be effective at these goals have to ask the question: how well do they accomplish the aim of letting WotC focus on products which will likely sell well and in large quantities and are unlikely to bite them later due to miscalculating market sizes? And secondarily, how well do they do the primary goal while minimizing possible legal entanglements, extra competition for WotC in WotC's target markets, and WotC's own product development costs?
First, let's look at the OGL: the OGL clearly seems to have worked fairly well at keeping WotC working on high volume, crunch-heavy product. So in that regard, we have to say it succeeded. And due to the wording of the OGL, WotC didn't have to maintain oversight and got free system development, at least in theory. So they could stay well away from the thorny legal issues that come up when acting like a "monitor" and controlling development, and the license also made the likelihood of losing a copyright infringment lawsuit significantly less on their end. However, it spawned several competing systems... but it appears that much of these competitors' impact is limited to hardcore RPG fans, many of which still have purchased large libraries of WotC material, which means that there is the potential that they lost almost no sales. On the other hand, the sheer quantity of material seems to have helped bring back otherwise lost customers and cemented d20's dominance as a system. So it's possible that the OGL lost them money, but it's also possible that they made significantly more money than they would have without any licensing. It's hard to tell without some specific figures and some hefty statistical analysis of the demographics and marketplace.
In comparison, the GSL prevents the spawning of new systems, which could be a benefit, but also has some problems; first off, the possibility of legal issues similar to those that affect "common carriers" in regards to having to be a neutral party come up, because WotC takes on something similar to regulatory role due to their ability to rescind a license at will, and a few times, losing a lawsuit of this type has meant that the licensing company ended up being forced to license their IP to all comers, albeit for a fee. This could be disastrous if it actually happens, as it means WotC would lose it's best way of keeping the IP that makes many people think of D&D limited to D&D. I'm not sure that such lawsuits will happen, or even that they will result in such a decision, but if such a possibility exists, the chance that it will happen must be balanced against any benefits. However, if WotC are challenged in such a lawsuit and they win, it provides them significant security later on. Secondly, due to various disagreements about the license's technicalities, the current GSL has driven several of the popular 3rd party publishers out of the market or led them to focus on their own systems, and WotC's own decision to keep the productions of Dungeon and Dragon in house means they are almost certain to have to devote significantly more resources to potentially lower profit areas of system support. Additionally, the dominance of their core system is less assured if their own splat material doesn't sell well, because there is less compatible material out there from 3rd party sources, which means they are taking on higher risks. On the other hand, the DDI, if it gets going, will serve to mitigate some of those risks, as it is fairly certain WotC's main distribution method for adventure modules will be the DDI, and so WotC can be assured of a reasonably steady income stream and a relatively low distribution and publishing cost, even if the fixed costs associated with writing and editing haven't changed.
The third alternative, no licensing for 3rd party publishing at all except possibly free fanmaterial, would mean that WotC would need to take on all of the traditional support roles as a publisher, and would therefore expose themselves most fully to the risks of adventure module production and sales, and it also means that they would be at the most risk of having their core material fail to sell if their splats didn't sell as well as hoped. However, they would suffer from few, if any legal vulnerabilities, and also not have to worry about any issues associated with losing dominance as far as their role in being the biggest publisher to use their system.
So in the end, I'd say that it's a question of risk versus reward; the OGL or a variant, in my mind, seems the generally less risky but possibly less lucrative option as compared to the GSL for WotC, if only because the design and practical effect of the license has likely helped insulate WotC from some forms of risk, but also has given the 3rd parties risk assurances that hel them exist and thrive working in areas WotC hasn't wished to cover. In comparison, the GSL's more targeted approach could be more profitable in the long run because it insulates them from the areas the OGL left WotC most vulnerable to and which are potentially among the most dangerous to WotC's position, but the situation with the GSL as it currently stands seems to have more failure points that lead to it being a practical failure and less of an overall success and the license has a few major pitfalls of it's own. However, I suspect that both the OGL and the GSL routes will demonstrate that some form of licensing is often better than going it alone, as that is the riskiest model, but the likely rewards are simply not worth the risk of losing status and the ability to maintain a large, active customer base and the ensuing network effects.
I also suspect that both will demonstrate that it is beneficial for system publishers to largely stay out of the module market unless the low margin products largely bypass the normal book distribution channels in favor of direct subscription and patronage models or they are primarily distributed through low-cost distribution techniques such as PDF, while higher margin product continues to show up in more mainsteam distribution channels. Paizo is a great example of one such company where their distribution and payment methods serve to offset their risks in being a company that has a significant portion of their resources tied up in publishing adventure modules and other low-margin, short lifespan material.
In short, was the OGL a bad idea? I don't think so. I'm pretty confident that it's better than going alone, particularly in the latter stages of a system's life cycle when support for a system is going to be waning and there will be less money in the operating budget of the primary publisher for low margin projects such as adventures, despite the need for them having not decreased. Is it the optimal model? I still couldn't tell you. Ask again in 5-8 years, as I really feel it will take that long to show clear results. It's easily possible a OGL/GSL hybrid which incorporates some of the protections 3rd parties feel are necessary for them to do business while limiting the ability of those 3rd parties to use WotC material for non-WotC systems would do better than either. Do I personally feel that the OGL or something roughly equivalent will prove to be the optimal model over a GSL ? I'd say yes, but I'd be lying, if only by omission, if I didn't mention that wasn't partly due to my bias for several of the 3rd party systems and my general feeling of being underwhelmed by 4e.
Remember, the purpose of the OGL and GSL are to let WotC selectively publish books in a way designed to maximize profitability per book, but more generally profitability as a whole. In the book trade, this is best achieved by printing high margin, large run, long-term, low development cost products. In the RPG sector of the book trade, this is generally best typified by rulebooks, most often core books, though rule-based splats aren't generally too far off from this ideal either. Setting splats are farther, and at the deep end are specialized rule books with a small likely userbase and adventure modules. So really, to gauge whether or not the OGL and GSL are effective or will be effective at these goals have to ask the question: how well do they accomplish the aim of letting WotC focus on products which will likely sell well and in large quantities and are unlikely to bite them later due to miscalculating market sizes? And secondarily, how well do they do the primary goal while minimizing possible legal entanglements, extra competition for WotC in WotC's target markets, and WotC's own product development costs?
First, let's look at the OGL: the OGL clearly seems to have worked fairly well at keeping WotC working on high volume, crunch-heavy product. So in that regard, we have to say it succeeded. And due to the wording of the OGL, WotC didn't have to maintain oversight and got free system development, at least in theory. So they could stay well away from the thorny legal issues that come up when acting like a "monitor" and controlling development, and the license also made the likelihood of losing a copyright infringment lawsuit significantly less on their end. However, it spawned several competing systems... but it appears that much of these competitors' impact is limited to hardcore RPG fans, many of which still have purchased large libraries of WotC material, which means that there is the potential that they lost almost no sales. On the other hand, the sheer quantity of material seems to have helped bring back otherwise lost customers and cemented d20's dominance as a system. So it's possible that the OGL lost them money, but it's also possible that they made significantly more money than they would have without any licensing. It's hard to tell without some specific figures and some hefty statistical analysis of the demographics and marketplace.
In comparison, the GSL prevents the spawning of new systems, which could be a benefit, but also has some problems; first off, the possibility of legal issues similar to those that affect "common carriers" in regards to having to be a neutral party come up, because WotC takes on something similar to regulatory role due to their ability to rescind a license at will, and a few times, losing a lawsuit of this type has meant that the licensing company ended up being forced to license their IP to all comers, albeit for a fee. This could be disastrous if it actually happens, as it means WotC would lose it's best way of keeping the IP that makes many people think of D&D limited to D&D. I'm not sure that such lawsuits will happen, or even that they will result in such a decision, but if such a possibility exists, the chance that it will happen must be balanced against any benefits. However, if WotC are challenged in such a lawsuit and they win, it provides them significant security later on. Secondly, due to various disagreements about the license's technicalities, the current GSL has driven several of the popular 3rd party publishers out of the market or led them to focus on their own systems, and WotC's own decision to keep the productions of Dungeon and Dragon in house means they are almost certain to have to devote significantly more resources to potentially lower profit areas of system support. Additionally, the dominance of their core system is less assured if their own splat material doesn't sell well, because there is less compatible material out there from 3rd party sources, which means they are taking on higher risks. On the other hand, the DDI, if it gets going, will serve to mitigate some of those risks, as it is fairly certain WotC's main distribution method for adventure modules will be the DDI, and so WotC can be assured of a reasonably steady income stream and a relatively low distribution and publishing cost, even if the fixed costs associated with writing and editing haven't changed.
The third alternative, no licensing for 3rd party publishing at all except possibly free fanmaterial, would mean that WotC would need to take on all of the traditional support roles as a publisher, and would therefore expose themselves most fully to the risks of adventure module production and sales, and it also means that they would be at the most risk of having their core material fail to sell if their splats didn't sell as well as hoped. However, they would suffer from few, if any legal vulnerabilities, and also not have to worry about any issues associated with losing dominance as far as their role in being the biggest publisher to use their system.
So in the end, I'd say that it's a question of risk versus reward; the OGL or a variant, in my mind, seems the generally less risky but possibly less lucrative option as compared to the GSL for WotC, if only because the design and practical effect of the license has likely helped insulate WotC from some forms of risk, but also has given the 3rd parties risk assurances that hel them exist and thrive working in areas WotC hasn't wished to cover. In comparison, the GSL's more targeted approach could be more profitable in the long run because it insulates them from the areas the OGL left WotC most vulnerable to and which are potentially among the most dangerous to WotC's position, but the situation with the GSL as it currently stands seems to have more failure points that lead to it being a practical failure and less of an overall success and the license has a few major pitfalls of it's own. However, I suspect that both the OGL and the GSL routes will demonstrate that some form of licensing is often better than going it alone, as that is the riskiest model, but the likely rewards are simply not worth the risk of losing status and the ability to maintain a large, active customer base and the ensuing network effects.
I also suspect that both will demonstrate that it is beneficial for system publishers to largely stay out of the module market unless the low margin products largely bypass the normal book distribution channels in favor of direct subscription and patronage models or they are primarily distributed through low-cost distribution techniques such as PDF, while higher margin product continues to show up in more mainsteam distribution channels. Paizo is a great example of one such company where their distribution and payment methods serve to offset their risks in being a company that has a significant portion of their resources tied up in publishing adventure modules and other low-margin, short lifespan material.
In short, was the OGL a bad idea? I don't think so. I'm pretty confident that it's better than going alone, particularly in the latter stages of a system's life cycle when support for a system is going to be waning and there will be less money in the operating budget of the primary publisher for low margin projects such as adventures, despite the need for them having not decreased. Is it the optimal model? I still couldn't tell you. Ask again in 5-8 years, as I really feel it will take that long to show clear results. It's easily possible a OGL/GSL hybrid which incorporates some of the protections 3rd parties feel are necessary for them to do business while limiting the ability of those 3rd parties to use WotC material for non-WotC systems would do better than either. Do I personally feel that the OGL or something roughly equivalent will prove to be the optimal model over a GSL ? I'd say yes, but I'd be lying, if only by omission, if I didn't mention that wasn't partly due to my bias for several of the 3rd party systems and my general feeling of being underwhelmed by 4e.
