OGL Roll for Combat reveals the terms of the "sweetheart deal" offered to 3pp

[Parmandur]

I don't believe that at all. They have those numbers at their fingertips. They are as likely to be out of touch about those numbers as they are about what players and DMs want out of the game. There's no way in hell that they haven't had long talks with some people who make those products or have employees who have done it themselves.

Why do you thinknthat WotC financial people have access to Kobold Press or Goodman Games finances? Working under the assumption that past $750,000 a company is operating pure profit for a book might seem to be very reasonable from the data that WotC has access to or general MBA trained assumptions, because that MBA wouldn't set up a business that wasn't operating in profit by that point...and the marketing WotC had on offer as detailed in this thread is probably worth more than they were asking at 25% over $750,000. But might be a threat to a company operating on the cliff's edge that an MBA wouldn't factor into their assumptions.

 

[Parmandur]

Wait… I’m confused… is it 25% of revenue OVER 750K or is it 25% of ALL revenue once you go over 750K? @_@

15% of all revenue past $750,000. So if a company had signed one of these deals and made $750,001, they would owe WotC 15 cents while getting all the noted advertising help. But each dollar they make past that point is $0.15 to WotC...which given the marketing indifference isn't crazy.

 

[MockingBird]

"Kids today. They don't know they've been born."

Not Know You Are Born, Meaning & Definition - UsingEnglish.com

What does the idiom 'Not know you are born' mean? Discover the definition of 'Not know you are born' in our extensive dictionary of English idioms and idiomatic expressions.

www.usingenglish.com

Using English claims it is international usage. However, Google Ngrams suggests it is primarily British English. Earliest written record seems to be about 100 years ago. To me, it feels like its more Midlands/Northern British than southern.

Most reference websites seem to suggest it means something along the lines of "you have a good life and don't realise it". It's something like "Oh my sweet summer child" in that regard, except a bit more disparaging, because it's normally used to refer to someone in the third person, rather than talking to someone in the second person.

Sort of like "bless your heart" in the southern United States.

 

[Maxperson]

Why do you thinknthat WotC financial people have access to Kobold Press or Goodman Games finances? Working under the assumption that past $750,000 a company is operating pure profit for a book might seem to be very reasonable from the data that WotC has access to or general MBA trained assumptions, because that MBA wouldn't set up a business that wasn't operating in profit by that point...and the marketing WotC had on offer as detailed in this thread is probably worth more than they were asking at 25% over $750,000. But might be a threat to a company operating on the cliff's edge that an MBA wouldn't factor into their assumptions.

They don't need exact finances of any specific company to know a very close approximation to what the profit margins are as a whole for 3PP. They knew what 20-25% would do. Hell, even after people screamed about what those margins were, they still only lowered it to a 3PP killing 15% for the "sweetheart" deal.

 

[Haplo781]

Sort of like "bless your heart" in the southern United States.

Yep. And definitely an insult and against the rules @Umbran

 

[Parmandur]

They don't need exact finances of any specific company to know a very close approximation to what the profit margins are as a whole for 3PP. They knew what 20-25% would do. Hell, even after people screamed about what those margins were, they still only lowered it to a 3PP killing 15% for the "sweetheart" deal.

The 15% offer came before the leaks, incidentally, that was their opening gambit to have 25% the standard withb15% for negotiated contracts.

I thinknyou overestimate the potential knowledge of the MBA making the number calls here. They aren't the people who know people at Kobold Press, and knowing several people whose job it is to male these sorts of number proposals I have been told it is "wild ass guessing." I think the most likely explanation is that the business side people really believed that 25% with marketing assistance was a legitimately great offer on the numbers.

Even assuming more knowledge than I am guessing the business guys had, let's take a look at Kobold Press Tome of Beasts line. They had fewer than 10,000 backers for the latest one on Kickstarter, and made some thousands of sales on DriveThruRPG. Now, let's assume that WotC marketing offer convinced 1% of D&D Beyond users to try Tome of Beasts V, or about 150,000 sales: or approximately $7.5 Million in revenue. Sure, 15% on 7.5 million would be a lot of money given to WotC, but from a business point of view that's a fair trade.

 

[Undrave]

It's marginal like taxes. So if you make $750,001, WizBro gets 25¢.

Okay that's what I understood.

 

[HomegrownHydra]

I think the reason it didn't work was that the people at WotC in charge of figuring out a number didn't have an accurate understanding of how seat-of-the-pants the third party D&D industry is.

Kickstarter straight up told WotC that these sky high royalties were too much for creators to be able afford. WotC knew that and went forward with them precisely because they were trying to hamstring the top 3pp's not because they thought the royalty rate was reasonable.

 

[Maxperson]

The 15% offer came before the leaks, incidentally, that was their opening gambit to have 25% the standard withb15% for negotiated contracts.

I thinknyou overestimate the potential knowledge of the MBA making the number calls here. They aren't the people who know people at Kobold Press, and knowing several people whose job it is to male these sorts of number proposals I have been told it is "wild ass guessing." I think the most likely explanation is that the business side people really believed that 25% with marketing assistance was a legitimately great offer on the numbers.

Even assuming more knowledge than I am guessing the beers guys had, let's take a look at Kobold Press Tome of Beasts line. They had fewer than 10,000 backers for the latest one on Kickstarter, and made some thousands of sales on DriveThruRPG. Now, let's assume that WotC marketing offer convinced 1% of D&D Beyond users to try Tome of Beasts V, or about 150,000 sales: or approximately $7.5 Million in revenue. Sure, 15% on 7.5 million would be a lot of money given to WotC, but from a business point of view that's a fair trade.

You give a repeatedly and blatantly deceptive company more credit than I do.

 

[Parmandur]

Kickstarter straight up told WotC that these sky high royalties were too much for creators to be able afford. WotC knew that and went forward with them precisely because they were trying to hamstring the top 3pp's not because they thought the royalty rate was reasonable.

A lot of assumptions going on there. The Occam's Razor approach is that the decision makers at WotC thought this was a good deal that people would take up, and everybody would make money. And putting on the McBusiness glasses, I can see why that may have seemed reasonable from a particular information vantage point.

 

[HomegrownHydra]

I think the most likely explanation is that the business side people really believed that 25% with marketing assistance was a legitimately great offer on the numbers.

The most likely explanation is that they were trying to cut the top 3pp's down to size.

 

[Parmandur]

You give a repeatedly and blatantly deceptive company more credit than I do.

More importantly than that, theybare greedy. Ot really isn't that hard to read them: they thought they saw a way to make money byboffering a way for others to make more money, and didn't consider ideals like "Open Gaming" or that third party publishers might not be cold calculating business Reptialians (temwmber that most people assume that everyone secretly thinksnlike they do!). Mistakes were made.

 

[Parmandur]

The most likely explanation is that they were trying to cut the top 3pp's down to size.

No, the most likely explanation was that they wanted money, and an excellent way to do that is by offering a way for someone else to make money and pay you for the privilege.

 

[Ashtagon]

The 15% offer came before the leaks, incidentally, that was their opening gambit to have 25% the standard withb15% for negotiated contracts.

...

Even assuming more knowledge than I am guessing the beers guys had, let's take a look at Kobold Press Tome of Beasts line. They had fewer than 10,000 backers for the latest one on Kickstarter, and made some thousands of sales on DriveThruRPG. Now, let's assume that WotC marketing offer convinced 1% of D&D Beyond users to try Tome of Beasts V, or about 150,000 sales: or approximately $7.5 Million in revenue. Sure, 15% on 7.5 million would be a lot of money given to WotC, but from a business point of view that's a fair trade.

Sure, but if cost-per-unit accounts for 30% of the unit price (assuming printed books), losing 75% (DM Guild's 50%, plus another 25% for the 1.1 licence) means you are paying for the privilege of being in the industry; the more you print, the more you lose.

You're not just paying an upfront cost for development. Per-unit costs exist as well. And it's quite reasonable to suppose that a few thousand units have to be sold just to break even on the development costs.

It might conceivably be a good deal if all you are selling is software with electronic distribution, and therefore no meaningful per-unit costs. Given that the current batch of WotC executives seem to be from that field, that may be why they think its such a good deal.

 

[Maxperson]

More importantly than that, theybare greedy. Ot really isn't that hard to read them: they thought they saw a way to make money byboffering a way for others to make more money, and didn't consider ideals like "Open Gaming" or that third party publishers might not be cold calculating business Reptialians (temwmber that most people assume that everyone secretly thinksnlike they do!). Mistakes were made.

Mistakes are still being made. They continue to try and deceive us, making things worse and not better.

 

[Parmandur]

Sure, but if cost-per-unit accounts for 30% of the unit price (assuming printed books), losing 75% (DM Guild's 50%, plus another 25% for the 1.1 licence) means you are paying for the privilege of being in the industry; the more you print, the more you lose.

You're not just paying an upfront cost for development. Per-unit costs exist as well. And it's quite reasonable to suppose that a few thousand units have to be sold just to break even on the development costs.

It might conceivably be a good deal if all you are selling is software with electronic distribution, and therefore no meaningful per-unit costs. Given that the current batch of WotC executives seem to be from that field, that may be why they think its such a good deal.

Per unit costs go down with volume, and as I pointed out above, if WptC could use their marketing muscles to get 1% of their users to buy a Kobold Press book we are talking millions of dollars. I think we have to reasonably assume that some MBA ran some numbers that seemed wildly mutually beneficial, but maybe had some flawed assumptions or data.

 

[Parmandur]

Mistakes are still being made. They continue to try and deceive us, making things worse and not better.

Well, duh, they always were. Like, this is WotC we are talking about here, they've always been manipulative snowjob experts at their best as a group.

 

[eyeheartawk]

Sure, but if cost-per-unit accounts for 30% of the unit price (assuming printed books), losing 75% (DM Guild's 50%, plus another 25% for the 1.1 licence) means you are paying for the privilege of being in the industry; the more you print, the more you lose.

You're not just paying an upfront cost for development. Per-unit costs exist as well. And it's quite reasonable to suppose that a few thousand units have to be sold just to break even on the development costs.

It might conceivably be a good deal if all you are selling is software with electronic distribution, and therefore no meaningful per-unit costs. Given that the current batch of WotC executives seem to be from that field, that may be why they think its such a good deal.

I'm pretty sure if you use the DMs Guild you are not using the OGL. DMs Guild is a separate (bad!) agreement with WOTC that supersedes the implicit offer and acceptance in the OGL. I think they even specifically say that in the old "draft" of OGL 1.1. Or, at the very least, they wouldn't be double-dipping on royalties.

Then again, their word is mud, so you know.

 

[HomegrownHydra]

A lot of assumptions going on there. The Occam's Razor approach is that the decision makers at WotC thought this was a good deal that people would take up, and everybody would make money. And putting on the McBusiness glasses, I can see why that may have seemed reasonable from a particular information vantage point.

We are both making assumptions and yours are not the "Occam's Razors approach", they are just your assumptions. You are assuming that WotC was going for a win-win situation but that clearly is false based upon the fact they included in OGL 1.1 a clause that would let them change or cancel the license whenever they wanted, they just had to give 30 days notice. That is an absolutely outrageous provision that would grant WotC the power to destroy any business that signed on to OGL 1.1. There is no legitimate reason for such a clause and it made clear that they were not wanting to help 3pp's be more successful but to wreck them.

 

[Parmandur]

We are both making assumptions and yours are not the "Occam's Razors approach", they are just your assumptions. You are assuming that WotC was going for a win-win situation but that clearly is false based upon the fact they included in OGL 1.1 a clause that would let them change or cancel the license whenever they wanted, they just had to give 30 days notice. That is an absolutely outrageous provision that would grant WotC the power to destroy any business that signed on to OGL 1.1. There is no legitimate reason for such a clause and it made clear that they were not wanting to help 3pp's be more successful but to wreck them.

I mean, of course they wanted a win-win, they wanted money. They are simple creatures.