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

Parmandur

Book-Friend
If they were going for a win-win situation then they would have negotiated with the publishers. They would have said, "This is what we want, what would make it worthwhile for you to sign off on that?" Then the different parties would have traded ideas and worked cooperatively to craft a license. But WotC didn't do that at all, they simply went to all the top publishers in December with a demand that they sign a new license or else a much worse license would be forced upon them on January 13th. That is not negotiating, that is coercion. And coercion is used to make people agree to something that is NOT good for them.
Yeah, heavy-handed, sure. But the best explanation for why rhey thought ur would work was that the numbers made godd business sense on their end. And I can see why they thought that based on the leaked info.
 

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HomegrownHydra

Adventurer
There is one legitimate reason for such a clause. If you are going to try and yank the rug out from under everyone by revoking OGL 1.0a, then you also put in a bunch of other ridiculous changes so that when you get pushback, you can "compromise" by removing those, leaving you with the change or changes you wanted to begin with. You get what you wanted and the customers feel like that got something out of it.

WotC just failed to anticipate the level of pushback they would get and continue to make things worse with their deceptive practices.
The scenario you are describing here is exactly what they were trying do. I would only disagree with calling that tactic "legitimate" precisely because that clause was not offered in good faith in the belief that it would be acceptable to the other party. It was simply coercion, and I don't think calling coercion in this situation should be considered a legitimate motive.
 

Maxperson

Morkus from Orkus
The scenario you are describing here is exactly what they were trying do. I would only disagree with calling that tactic "legitimate" precisely because that clause was not offered in good faith in the belief that it would be acceptable to the other party. It was simply coercion, and I don't think calling coercion in this situation should be considered a legitimate motive.
It's a legitimate bargaining strategy. If you want to sell your house for 750k, you don't list it for 750k unless the market is super hot. You list it higher so that the other side can bargain you down to what you actually want.
 

Ashtagon

Adventurer
It's occurred to me that one possible reason a 3PP might reject this offer is that they aren't big enough to scale up effectively from selling 10-15 thousand units to selling 250k+ units. Even if it was a good deal in terms of profit per unit, if you can't make and distribute the product in a reasonable time span, it does nothing but damage your reputation.
 

Parmandur

Book-Friend
It's occurred to me that one possible reason a 3PP might reject this offer is that they aren't big enough to scale up effectively from selling 10-15 thousand units to selling 250k+ units. Even if it was a good deal in terms of profit per unit, if you can't make and distribute the product in a reasonable time span, it does nothing but damage your reputation.
And that may have been off the radar of WotC finance people.
 

raniE

Adventurer
15% on the millions in revenue theybfelt they were offering seems obvious and sufficient motivation. Seriously, 15 million subscribers. Versus thousands of book buyers. I can see the value on offer.
What 15 million subscribers? As far as I can tell, subscriber numbers have never been released for D&D Beyond. 10 million accounts was the thing in April of last year. But say it's 15 million accounts. How many of those are active, so not dormant accounts just sitting there? Is it 20%? 30%? More? Less? I don't know, but I doubt it's even a majority. Then, how many of those accounts are subscribed? you only need one subscription per group really, and the people I've played with have always unsubscribed whenever they weren't in an active campaign, and only one account was ever subscribed per group, because more would be pointless. So one out of every five active accounts maybe? Let's be generous and say 25%. So 15 million accounts, 30% active, 25% of those subscribed. That's 1.125 million subscribers. Substantially fewer than the total number of accounts. And if the number of subscribers was actually a significant proportion of the number of accounts, we would have heard such a number proclaimed at some point. We haven't, so it's likely to be a small fraction of total accounts.
 

HomegrownHydra

Adventurer
It's a legitimate bargaining strategy. If you want to sell your house for 750k, you don't list it for 750k unless the market is super hot. You list it higher so that the other side can bargain you down to what you actually want.
Sure, that's legitimate if you are actually negotiating. That is, trading offers back and forth. So you list the house at 850k and someone offers 650k; you counter with 800k, they respond with 700k, and then both agree to 750k. But that's not what WotC did. They simply dropped this contract in front of them and said "accept this license or you will be forced to take a far worse deal" with the "far worse deal" serving as a gun to the head. It's like if you're house is worth 750k and someone says "sell your house to me for 200k or I will make you sell it to me for 50k". That's not legitimate negotiation.
 

Haplo781

Legend
Sure, that's legitimate if you are actually negotiating. That is, trading offers back and forth. So you list the house at 850k and someone offers 650k; you counter with 800k, they respond with 700k, and then both agree to 750k. But that's not what WotC did. They simply dropped this contract in front of them and said "accept this license or you will be forced to take a far worse deal" with the "far worse deal" serving as a gun to the head. It's like if you're house is worth 750k and someone says "sell your house to me for 200k or I will make you sell it to me for 50k". That's not legitimate negotiation.
More of a "pay me 50k or I will burn your house down" IMO.
 


Parmandur

Book-Friend
What 15 million subscribers? As far as I can tell, subscriber numbers have never been released for D&D Beyond. 10 million accounts was the thing in April of last year. But say it's 15 million accounts. How many of those are active, so not dormant accounts just sitting there? Is it 20%? 30%? More? Less? I don't know, but I doubt it's even a majority. Then, how many of those accounts are subscribed? you only need one subscription per group really, and the people I've played with have always unsubscribed whenever they weren't in an active campaign, and only one account was ever subscribed per group, because more would be pointless. So one out of every five active accounts maybe? Let's be generous and say 25%. So 15 million accounts, 30% active, 25% of those subscribed. That's 1.125 million subscribers. Substantially fewer than the total number of accounts. And if the number of subscribers was actually a significant proportion of the number of accounts, we would have heard such a number proclaimed at some point. We haven't, so it's likely to be a small fraction of total accounts.
I mean, tons of unknowns there. Which is why I focused on numbers assuming that WotC could move sales to about only 1% of their supposed numbers, which would still mean millions upon millions of dollars.
 

raniE

Adventurer
I mean, tons of unknowns there. Which is why I focused on numbers assuming that WotC could move sales to about only 1% of their supposed numbers, which would still mean millions upon millions of dollars.
Right, but thinking they could move sales to 1% of total accounts might mean thinking they can move sales to 20% of subscribers. I think that's far less likely. And I think any third party producer looking at the numbers WotC puts out will see that number of subscribers aren't mentioned. When you mention how many accounts there are in total at your free service with a fairly onerous method of account deletion, but don't mention how many of those are actually subscribed to the optional subscription tiers, that means that it's a low percentage.
 

dave2008

Legend
Indeed. It's fair to say that contracts rarely use profit as a measure because it's too easy to manipulate, but if you want naked revenue, you need to be reasonable, and be looking at values like 3% and 5%.
I am pretty sure Morus said 10% of total revenue was reasonably common in the industry and I have heard from others that companies charge much more. Also, that fee is only for amounts above 750K, so depending what your revenue is it could end much lower.

That being said, it was not low enough to make it enticing. If this was something WotC really wanted it should have been around 10% general and 5% or less for premium 3PP. I'm not sure what their goal was since the dropped it completely in the first public draft.
 

Parmandur

Book-Friend
Right, but thinking they could move sales to 1% of total accounts might mean thinking they can move sales to 20% of subscribers. I think that's far less likely. And I think any third party producer looking at the numbers WotC puts out will see that number of subscribers aren't mentioned. When you mention how many accounts there are in total at your free service with a fairly onerous method of account deletion, but don't mention how many of those are actually subscribed to the optional subscription tiers, that means that it's a low percentage.
I've never paid for D&D Beyond, probavly never will (because that's why God invented pens and paper, dangnabbit)dang nabbing, but I would still be reached by Beyond communications because of course I have a free account (it's free, and it gives free stuff). So no, I think you are wildly underestimating the value and reach of that marketing muscle...though, again, it's academic since this isn't happening. But I can see why someone would rationally offer this deal and think they are doing the offeree a favor.
 

raniE

Adventurer
I've never paid for D&D Beyond, probavly never will (because that's why God invented pens and paper, dangnabbit)dang nabbing, but I would still be reached by Beyond communications because of course I have a free account (it's free, and it gives free stuff). So no, I think you are wildly underestimating the value and reach of that marketing muscle...though, again, it's academic since this isn't happening. But I can see why someone would rationally offer this deal and think they are doing the offeree a favor.
I have a free account (unless my deletion of it has actually gone through at this point) and I would absolutely not be reached by any of the marketing, because I'm not an active user. I think I'm at most underestimating it by something like half. Most people don't want advertisements from websites.
 

Parmandur

Book-Friend
I am pretty sure Morus said 10% of total revenue was reasonably common in the industry and I have heard from others that companies charge much more. Also, that fee is only for amounts above 750K, so depending what your revenue is it could end much lower.

That being said, it was not low enough to make it enticing. If this was something WotC really wanted it should have been around 10% general and 5% or less for premium 3PP. I'm not sure what their goal was since the dropped it completely in the first public draft.
I think theybwanted that money, but it was fairly tertiary. Notice that "free advertising to our huge distribution list of account holders" isn't part of the deal now.

I also suspect a missing ingredient here, longterm, is a plan to make Beyond more of a marketplace which isn't there yet. But dollars to donuts, when it is...15-20% off the top for WotC, just like OneBookShelf or a video game store.
 

Parmandur

Book-Friend
I have a free account (unless my deletion of it has actually gone through at this point) and I would absolutely not be reached by any of the marketing, because I'm not an active user. I think I'm at most underestimating it by something like half. Most people don't want advertisements from websites.
Yeah, I think you are way underestimating here. But even your underestimating puts the poterntial reach at a couple orders of magnitude past what the 3PP are doing on DriveThru or their Kickstarters.
 

Note that Steam charges 30 percent to sell stuff on there. However, the products are directly uploaded on Steam's servers, people buy it on Steam, and then Steam sends the other 70 percent back to the devopler.

WOTC wanted 15 percent in exchange for some advertising. If a person saw a 3PP product on D&D Beyond, they would have to then buy it somewhere else. That would be a step too far for many. Assuming of course the people on D&D Beyond arn't those "3PP is gross" types.
 

Haplo781

Legend
Note that Steam charges 30 percent to sell stuff on there. However, the products are directly uploaded on Steam's servers, people buy it on Steam, and then Steam sends the other 70 percent back to the devopler.

WOTC wanted 15 percent in exchange for some advertising. If a person saw a 3PP product on D&D Beyond, they would have to then buy it somewhere else. That would be a step too far for many. Assuming of course the people on D&D Beyond arn't those "3PP is gross" types.
Yeah they're trying to charge app store prices for ... Not an app store.
 

Whizbang Dustyboots

100% that gnome
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.
To underscore this, as I've said before, the majority of the D&D books I have are third party. None of them are books that WotC makes a counterpart to. But those purchases then encourage me to stay in the WotC ecosystem and continue buying WotC books that do appeal to me.

The third party publishers are acting like retention specialists for the brand.
 


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