WotC Announces OGL 1.1 -- Revised Terms, Royalties, and Annual Revenue Reporting

There has been a lot of speculation recently about WotC's plans regarding the Open Gaming License and the upcoming One D&D. Today, WotC shared some information.

In short, they will be producing a new Open Gaming License (note that the previous OGL 1.0a will still exist, and can still be used). However, for those who use the new OGL 1.1, which will be released in early 2023, there will be some limitations added with regards the type of product which can use it, and -- possibly controversially -- reporting to WotC your annual OGL-related revenue.

They are also adding a royalty for those third party publishers who make more than $750K per year.

Interestingly, only books and 'static electronic files' like ebooks and PDFs will be compatible with the new OGL, meaning that apps, web pages, and the like will need to stick to the old OGL 1.0a.

There will, of course, be a lot of debate and speculation over what this actually means for third party creators, and how it will affect them. Some publishers like Paizo (for Pathfinder) and others will likely simply continue to use the old OGL. The OGL 1.0a allows WotC to update the license, but allows licensees to continue to use previous versions "to copy, modify and distribute any Open Game Content originally distributed under any version of this License".

OGLs, SRDs, & One D&D

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1. Will One D&D include an SRD/be covered by an OGL?

Yes. First, we’re designing One D&D with fifth edition backwards compatibility, so all existing creator content that is compatible with fifth edition will also be compatible with One D&D. Second, we will update the SRD for One D&D as we complete its development—development that is informed by the results of playtests that we’re conducting with hundreds of thousands of D&D players now.

2. Will the OGL terms change?

Yes. We will release version 1.1 of the OGL in early 2023.

The OGL needs an update to ensure that it keeps doing what it was intended to do—allow the D&D community’s independent creators to build and play and grow the game we all love—without allowing things like third-parties to mint D&D NFTs and large businesses to exploit our intellectual property.

So, what’s changing?

First, we’re making sure that OGL 1.1 is clear about what it covers and what it doesn’t. OGL 1.1 makes clear it only covers material created for use in or as TTRPGs, and those materials are only ever permitted as printed media or static electronic files (like epubs and PDFs). Other types of content, like videos and video games, are only possible through the Wizards of the Coast Fan Content Policy or a custom agreement with us. To clarify: Outside of printed media and static electronic files, the OGL doesn’t cover it.

Will this affect the D&D content and services players use today? It shouldn’t. The top VTT platforms already have custom agreements with Wizards to do what they do. D&D merchandise, like minis and novels, were never intended to be part of the OGL and OGL 1.1 won’t change that. Creators wishing to leverage D&D for those forms of expression will need, as they always have needed, custom agreements between us.

Second, we’re updating the OGL to offer different terms to creators who choose to make free, share-alike content and creators who want to sell their products.

What does this mean for you as a creator? If you’re making share-alike content, very little is going to change from what you’re already used to.

If you’re making commercial content, relatively little is going to change for most creators. For most of you who are selling custom content, here are the new things you’ll need to do:

1. Accept the license terms and let us know what you’re offering for sale
2. Report OGL-related revenue annually (if you make more than $50,000 in a year)
3. Include a Creator Product badge on your work

When we roll out OGL 1.1, we will also provide explanatory videos, FAQs, and a web portal for registration to make navigating these requirements as easy and intuitive as possible. We’ll also have help available to creators to navigate the new process.

For the fewer than 20 creators worldwide who make more than $750,000 in income in a year, we will add a royalty starting in 2024. So, even for the creators making significant money selling D&D supplements and games, no royalties will be due for 2023 and all revenue below $750,000 in future years will be royalty-free.

Bottom line: The OGL is not going away. You will still be able to create new D&D content, publish it anywhere, and game with your friends and followers in all the ways that make this game and community so great. The thousands of creators publishing across Kickstarter, DMsGuild, and more are a critical part of the D&D experience, and we will continue to support and encourage them to do that through One D&D and beyond.

 

[overgeeked]

WotC has their best years right now, so how bad is the outcome really… incidentally (or not) their worst years were when they tried this last time.

Which is why this stinks of pure petty greed. They’re doing better than they’ve ever done and that’s still not enough. But they’re going to piss off a lot of fans to go for the comparative peanuts 3PP are making.

 

[Greg Benage]

relative to the 1 billion target, this is peanuts.

Let’s do some much too simple math. Each of the top 20 makes $2M per year, 25% of which is profit, with WotC getting 10% of that. That amounts to 1M or 0.1% of their goal.

I should have responded to this at the same time, but I screwed it up. I don't think the royalty will be based on "profit." I don't care how well you run your business.

When the OGL was originally drafted, I doubt anyone anticipated Kickstarter--let alone $2MM campaigns. So if I'm wearing the suit, I want some protection for what you're not anticipating this time. What other opportunities is our IP going to create on the way to $1 billion that you're trying to license away for free again? You don't know, so let's do it my way this time.

Then we could get into even more speculative territory. Like, is the OGL and SRD (as they have existed up to now) viewed as an encumbrance on the brand? Follow the above line of thought and imagine that our suit has indeed turned D&D into a $1 billion brand, and now Hasbro wants to sell it. Does it matter to its value that there's a free license out there to OneD&D and other businesses are making millions of dollars off it? Probably, though I couldn't even guess at how much (and neither can anyone currently at Hasbro). What if you could eliminate (or at least mediate) that encumbrance and turn it into a passive revenue stream with a simple royalty structure?

 

[mamba]

No, I mean it's a risk for Wizards/Hasbro that someone will uses 1.0/a to clone 5e.

there is nothing they can do about that, the 5e SRD is already available under OGL 1.0a

 

[Greg Benage]

there is nothing they can do about, that the 5e SRD is already available under OGL 1.0a

I agree, which is why I said, "I don't think they can put that horse back in the shed, but maybe they think they can at least make it less likely that the next horse gets out."

 

[mamba]

I should have responded to this at the same time, but I screwed it up. I don't think the royalty will be based on "profit." I don't care how well you run your business.

if I am not turning a profit yet because I am investing, and you want some money already, that hurts me even more, more incentive to stay with 1.0a

When the OGL was originally drafted, I doubt anyone anticipated Kickstarter--let alone $2MM campaigns.

Probably not, so? D&D is not exactly suffering because of that, one could argue (and the creators of the license did) that they benefit from it

So if I'm wearing the suit, I want some protection for what you're not anticipating this time.

that only works if you can withdraw the 1.0 version, and you cannot.

At best it works 10 - 20 years down the line when the then current version is sufficiently different from 5e, assuming you cannot forward-clone like others retrocloned…

What other opportunities is our IP going to create on the way to $1 billion that you're trying to license away for free again? You don't know, so let's do it my way this time.

As I said in an earlier post, I get restricting it to print and pdf. I want VTTs in there as well though, but carve out NFTs, games and all else. I am fine with that, drop registration, reporting and fees and I stop complaining

Then we could get into even more speculative territory. Like, is the OGL and SRD (as they have existed up to now) viewed as an encumbrance on the brand?

I doubt it, you either are a $1B brand in the market environment you find yourself in or you are not.

One could also argue that D&D benefits from it because there is so much more diverse material drawing players in than WotC could ever hope to produce.
It might also generate a certain level of goodwill that WotC currently enjoys and might throw away, just like they did with 4e, and see how that went for them (granted that was not just a matter of dropping the OGL, but who is to say that this will be the only misstep now…)

 

[mamba]

I agree, which is why I said, "I don't think they can put that horse back in the shed, but maybe they think they can at least make it less likely that the next horse gets out."

they have no second horse… OneD&D is the same horse after a bath, I doubt you need the new SRD in 95% of cases or more, which means you can stick with the current one and 1.0 without any issues.

They really need to offer a carrot for anyone to even look at 1.1, and so far they have not offered any

 

[Greg Benage]

One could also argue that D&D benefits from it because there is so much more diverse material drawing players in than WotC could ever hope to produce.

I'm just going to focus on this, because the whole post reads similarly. I agree that one could argue this. I think the available evidence suggests Wizards/Hasbro doesn't find the argument particularly persuasive. If we're trying to make sense of why they're doing this when (we think) it's "so little money," it doesn't really get us very far if we just keep repeating, "They shouldn't do this!"

To be clear, I don't want them to make the license more restrictive. There's nothing in it for me if they make the license more restrictive. If I'm honest, of course, the only reason I care about how much money 3PP's can make is that I want there to be lots of 3PP content, but as far as that goes, the more money they make the better.

You said you were surprised about the royalty announcement, I speculated on some possible business reasons for it. I'm not arguing with you about what I want to happen.

 

[Greg Benage]

they have no second horse… OneD&D is the same horse after a bath, I doubt you need the new SRD in 95% of cases or more, which means you can stick with the current one and 1.0 without any issues.

This seems highly speculative, and (I think) very unlikely to be correct, but if you're right, they have dumb lawyers. There's no reason for any of this if other companies can ignore 1.1 and still get 95% of the OneD&D content. That being the case, and given Section 9, it's much more interesting to me to consider how they could structure the license and the SRD to square that circle. If they're simply so dumb that they haven't noticed the circle, well, then I'll eat a bug for overestimating them.

 

[mamba]

I'm just going to focus on this, because the whole post reads similarly. I agree that one could argue this. I think the available evidence suggests Wizards/Hasbro doesn't find the argument particularly persuasive.

that, or they think they can have their cake and eat it too

If we're trying to make sense of why they're doing this when (we think) it's "so little money," it doesn't really get us very far if we just keep repeating, "They shouldn't do this!"

well, the 'shouldn't' is unrelated to the 'why'. As to why, the obvious answer is that it makes them some money (and maybe I am off about how much that is, but compared to the 1B goal it will always be negligeble) and they apparently think that this direct money is more than the indirect damage this might inflict on WotC. I am much more pessimistic about that.

 

[mamba]

This seems highly speculative, and (I think) very unlikely to be correct, but if you're right, they have dumb lawyers. There's no reason for any of this if other companies can ignore 1.1 and still get 95% of the OneD&D content. That being the case, and given Section 9, it's much more interesting to me to consider how they could structure the license and the SRD to square that circle. If they're simply so dumb that they haven't noticed the circle, well, then I'll eat a bug for overestimating them.

They cannot square that circle beyond limiting the 1.0a OGC to what is already licensed under it.

To me there are two cases 1) you want to create your own RPG, 2) you want to create something for 5e / OneD&D (adventure, race, (sub)class, monsters, ...).

In the latter case you basically need nothing from the SRD other than maybe reference some names that are in it (monsters, spells, items, ...). That list will not be all that different in the One D&D SRD, so to me there is almost no case where you would actually need something from the new SRD that is not also in the 5e one.

If you want to create your own RPG the question is how close to D&D you want to stay, i.e. how much you copy over and how much you rewrite / add / remove. Here there might be something in the One D&D SRD that you might be interested in but cannot copy over, because of OGL 1.1.
That leaves you with coming up with a similar mechanic in your own words and go with that. Probably not too much of a problem in most cases either.

The one case where it might be is if you want to create 'Open5.5' as an exact (or as close to identical as legally possible) One D&D clone. That might be a risky approach even under 1.1

So all in all, I see almost no case where using the new SRD is important for a 3PP. All things being equal (i.e. no carrot, and the new SRD is not one), I expect 1.1 to be pretty much dead on arrival.