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

[Jer]

There's no point in a 3PP ever going above 750k since at that point they are no longer working for themselves but are basically working to give all of their profits to WotC.

Actually what's worse is that if you screw up your million dollar kickstarter or the timing of your production coincides with unanticipated increased costs you could end up deeper in debt because you brought in a million in revenue on books that will cost you nearly a million to produce, print and distribute. And you don't have the money to wet Wizards beak on your revenue.

 

[Justice and Rule]

Actually what's worse is that if you screw up your million dollar kickstarter or the timing of your production coincides with unanticipated increased costs you could end up deeper in debt because you brought in a million in revenue on books that will cost you nearly a million to produce, print and distribute. And you don't have the money to wet Wizards beak on your revenue.

Yeah, imagine MCDM Productions if this were in place at the time: they'd likely be struggling to make it by despite actually succeeding in a way no other Kickstarter had up until that point. Just utterly wild to think that companies would have to try and plan to make less than 750K and that wild success could actually end up crushing you.

 

[doctorbadwolf]

An API would probably be the only viable way to do something like that. But I strongly doubt they'd go for it, because they'd need some hefty QA, I'd think. WotC won't want broken 3pp features disrupting the "under-monetized D&D lifestyle brand" experience on their own platform.

Don’t know you were born, is an expression for not knowing how lucky you are. I didn’t say anyone was stupid.

If you are substantially over the $750k mark then it may not be worthwhile. If you are under then the advertising opportunity is golden.

Also people are fundamentally misunderstanding/misrepresenting the maths…

$750,000 revenue annually = $0 commission 0%
$800,000 revenue = $7,500 commission 0.9%
$1,000,000 revenue = $37,500 commission 3.75%
$1,500,000 revenue = $112,500 commission 7.5%

The suggestion that these figures can’t be profitable at over $750,000 is ridiculous.

I don’t think they were born yesterday. They want to keep more of their own money. I don’t think that’s stupid. Neither do I think it’s something that’s intrinsically good for the hobby or somehow better than WotC having some of it. They’re all capability entrepreneurs.

I don’t buy the idea that these figures are crippling. If overheads are that tight, you just put the price up by 3-7% which is what? $1.50 - $3.50 on a large hardback. Which is a stretch anyway because while the first book you print/publish/put online costs you $150,000 to make, the second one costs you a couple of dollars / nothing.

I mean even the head of games at KS acknowledged that the numbers don’t work for most publishers in this deal.

It's. Not. Their. Own. Money.
Stop saying this, please. This phrasing suggests that the OGL1.0 is somehow equivalent to theft or embezzlement or something. Obviously that is wrong, and suggesting it is not helpful.

WotC is trying to re-gate a few bits of IP that they've had out there for 20+ years, even as they have managed to keep massive amounts of other premium IP neatly cordoned off by regular IP law-- and to the entire industry's satisfaction, to boot. There's zero evidence that they've ever lost a single penny, or that they'd stand to gain much. And there's a pretty fair argument that the cost of having that IP out there all this time has more than been made up for by the 3pps and fans who have helped keep the "D&D lifestyle brand" vigorous enough to monetize today.

Yeah like most of the OGL was probably fair use anyway, but only if you’d reworded some stuff and used different verbiage. People built careers and businesses on the understanding that they could, instead, be in the clear while literally using copy and paste on the core rules they’re building on. For 20 years. Because wotc represented to them that this was the case.

Regardless of original intent, that’s a hell of a bait and switch. No wonder Dancy is so mad about it. They’re trying to exploit a good thing he did and turn it into a trap that no one would have opened themselves up to if Ryan hadn’t told them it was safe.

 

[MonsterEnvy]

Trusting D&Dshorts again. This thread is getting pathetic.

I can’t wait for this OGL nonsense to die down.

 

[mamba]

I can’t wait for this OGL nonsense to die down.

you are free to leave it alone any time you want

 

[MonsterEnvy]

you are free to leave it alone any time you want

I plan to, probably won’t bother with the One D&D forum until the next UA comes out

 

[mamba]

I plan to, probably won’t bother with the One D&D forum until the next UA comes out

Take your time

 

[Ruin Explorer]

Also people are fundamentally misunderstanding/misrepresenting the maths…

$750,000 revenue annually = $0 commission 0%
$800,000 revenue = $7,500 commission 0.9%
$1,000,000 revenue = $37,500 commission 3.75%
$1,500,000 revenue = $112,500 commission 7.5%

No, that's a fundamental misrepresentation.

It's a flat rate on every dollar above $750k. WotC themselves explained it that way. You're presenting it as a fraction of the whole, but that's irrelevant and misleading. The reality is 15% can flip you from profit to loss per unit immediately on passing $750k, but more likely would just destroy your profit. 25% almost certainly would given a normal business has a 10% profit margin (I can source this if you want to dispute it).

I don’t buy the idea that these figures are crippling.

Yes, and you also claimed that anyone who disagrees with you was "born yesterday", including all the people running these businesses, so why would we expect otherwise?

Which is a stretch anyway because while the first book you print/publish/put online costs you $150,000 to make, the second one costs you a couple of dollars / nothing.

Jesus wept lol. You don't get to talk about "misrepresentations" whilst making claims like this lol.

 

[TheSword]

No, that's a fundamental misrepresentation.

It's a flat rate on every dollar above $750k. WotC themselves explained it that way. You're presenting it as a fraction of the whole, but that's irrelevant and misleading. The reality is 15% can flip you from profit to loss per unit immediately on passing $750k, but more likely would just destroy your profit. 25% almost certainly would given a normal business has a 10% profit margin (I can source this if you want to dispute it).

That is exactly what those calculations show. A threshold that has scaling % of royalties from 0% to 7.5% up to $1.5m. Repeating 25% becauze it’s a larger number while ignoring the reality reveals either a lack of business acumen or you ideological opposition to this, in which case why are you bothering talking to people about the reality on the ground. Companies taking over 1.5m every year just in D&D related PDFs and books? At that point it’s not a small D&D publisher, they don’t equate to 99% of those 15,000 publishers and designers.

Yes, and you also claimed that anyone who disagrees with you was "born yesterday", including all the people running these businesses, so why would we expect otherwise?

If you’re gonna just lie then let’s stop here. I pointed out that my phrase was ‘don’t know you’re born’ you’re either British or have lived in Britain long enough to get the idiom. You know full well it doesn’t mean gullible, but rather unappreciative of how lucky you are.

 

[Ashtagon]

Story time.

I used to run a small hotel before covid did a number on the tourism industry. I set my own prices, and largely controlled my own profits. My single biggest expense was commission to certain online travel agents (known as OTAs in the trade); this was typically 15-20% of the sale price for bookings made through those OTAs. A large corporation approached me with an offer. They would handle all my booking data, and advertise, and control my prices. In exchange, they wanted 25% of the sales over a certain amount (that certain amount was slightly below my expected sales). Yes, this was on top of the 15-20% charged by the OTAs for any bookings made through those.

One of the things they said they would do to promote my property and increase sales was lower the basic room price. Now, after running costs, typically 40% of the sale price was nominal profit (that 40% was what paid for mortgage and my living expenses). Take away 25% of that for this big company's fee, and you'd be left unable to cover the mortgage.

Imagine if I'd let them do this. They'd also be knocking down the prices too. I'd have been in a situation where I would be paying for the privilege of hosting holiday-makers. Unsurprisingly, I laughed in their face. They offered to reduce their take to 15%. I still laughed.

----

WotC's 25% cut on sales above a certain amount is like this. It turns what for many companies is a tight but functional profit into a "paying for the privilege of being in the industry". As much as anyone might love their job and their industry, you can be quite sure that if they weren't being paid for it, they'd seek something else. And when they can continue getting paid for the job by simply not accepting a bad deal, why wouldn't they?