Dungeons & Dragons’ New Licence Tightens Its Grip On Competition

Dungeons & Dragons’ New Licence Tightens Its Grip On Competition

The new Dungeons & Dragons Open Gaming Licence, a document which allows a vast group of independent publishers to use the basic game rules created by D&D owner Wizards of the Coast, significantly restricts the kind of content allowed and requires anyone making money under the licence to report their products to Wizards of the Coast directly, according to an analysis of a leaked draft of the document, dated mid-December.

Despite reassurances from Wizards of the Coast last month, the original OGL will become an “unauthorised” agreement, and it appears no new content will be permitted to be created under the original licence.

What is the Dungeons & Dragons Open Gaming Licence?

The original OGL is what many contemporary tabletop publishers use to create their products within the boundaries of D&D’s reproducible content. Much of the original OGL is dedicated to the System Resource Document, and includes character species, classes, equipment, and, most importantly, general gameplay structures, including combat, spells, and creatures.

The creation of the OGL version 1.0, which was originally published in 2000, has allowed a host of outside designers and publishers, both amateur and professional, to make new products for a game that remains entirely owned by Hasbro subsidiary Wizards of the Coast (WotC). While this arrangement sometimes created products that directly competed with WotC publications, it also allowed the game to flourish and grow thanks to the resources created by the wider D&D community.

In 2022, when WotC announced plans to develop a revised edition of the Dungeons & Dragons rules, codenamed One D&D, the company said it would update the OGL as well. The OGL has been tweaked multiple times since its 2000 release, and WotC has at times transitioned to other royalty-free licenses, but the original OGL 1.0 had essentially remained intact until the company said it would develop OGL version 1.1.

What is in the new OGL 1.1?

A lot, actually. While the original open gaming licence is a relatively short document, coming in at under 900 words, the new draft of the OGL 1.1, which was provided to Gizmodo by a non-WotC developer, is over 9,000 words long. It addresses new technologies like blockchain and NFTs, and takes a strong stance against bigoted content, explicitly stating the company may terminate the agreement if third-party creators publish material that is “blatantly racist, sexist, homophobic, trans-phobic, bigoted or otherwise discriminatory.”

One of the biggest changes to the document is that it updates the previously available OGL 1.0 to state it is “no longer an authorised licence agreement.” By ending the original OGL, many licensed publishers will have to completely overhaul their products and distribution in order to comply with the updated rules. Large publishers who focus almost exclusively on products based on the original OGL, including Paizo, Kobold Press, and Green Ronin, will be under pressure to update their business model incredibly fast.

This is no mistake. According to the document procured by Gizmodo, the new agreements states that “the Open Game Licence was always intended to allow the community to help grow D&D and expand it creatively. It wasn’t intended to subsidise major competitors, especially now that PDF is by far the most common form of distribution.”

This sentiment is reiterated later in the document: The “OGL wasn’t intended to fund major competitors and it wasn’t intended to allow people to make D&D apps, videos, or anything other than printed (or printable) materials for use while gaming. We are updating the OGL in part to make that very clear.”

Paizo Inc., publisher of the Pathfinder RPG, one of D&D’s largest competitors, declined to comment on the changes for this article, stating that the rules update was a complicated and ongoing situation.

Chris Pramas, founder and president of Green Ronin Publishing, said that despite the fact that one of their own products — Mutants and Masterminds — was published under the Original OGL in 2002, and is still available today, they had not seen the Updated OGL, and they do not believe there is “any benefit to switching to the new one as described.”

Wizards of the Coast declined to comment for this article or answer specific questions about the leaked OGL document. A spokesperson directed Gizmodo to a blog post the company published in December, which reassures the community that this OGL will not materially affect the majority of people working in the industry.

What will happen to the original OGL?

The original OGL granted “perpetual, worldwide, non-exclusive licence” to the Open Game Content (commonly called the System Resource Document) and directed that licensees “may use any authorised version of this Licence to copy, modify and distribute any Open Game Content originally distributed under any version of this Licence.” But the updated OGL says that “this agreement is…an update to the previously available OGL 1.0(a), which is no longer an authorised licence agreement.”

The new document clarifies further in the “Warranties” section that “this agreement governs Your use of the Licensed Content and, unless otherwise stated in this agreement, any prior agreements between Us and You are no longer in force.”

According to attorneys consulted for this article, the new language may indicate that Wizards of the Coast is rendering any future use of the original OGL void, and asserting that if anyone wants to continue to use Open Game Content of any kind, they will need to abide by the terms of the updated OGL, which is a far more restrictive agreement than the original OGL.

Wizards of the Coast declined to clarify if this is in fact the case.

Who will be affected by the new OGL 1.1?

If the original licence is in fact no longer viable, every single licensed publisher will be affected by the new agreement, because every commercial creator will be asked to report their products, new and old, to Wizards of the Coast.

Additionally, while the original OGL did not specifically outline what kind of content third-party creators could make available and profit from, the updated OGL is very specific: The updated licence “only allows for creation of roleplaying games and supplements in printed media and static electronic file formats. It does not allow for anything else, including but not limited to things like videos, virtual tabletops or VTT campaigns, computer games, novels, apps, graphics novels, music, songs, dances, and pantomimes. You may engage in these activities only to the extent allowed under the Wizards of the Coast Fan Content Policy or separately agreed between You and Us.”

The Fan Content Policy can be read here, but in broad strokes, it allows for free content “based on or incorporating our IP. Fan Content includes fan art, videos, podcasts, blogs, websites, streaming content, tattoos, altars to your cleric’s deity, etc.”

The leaked OGL 1.1 draft indicates that WotC may not give licensees a a lot of time to adjust and agree to this new policy: The document reads, “if you want to publish SRD-based content on or after January 13, 2023 and commercialize it, your only option is to agree to the OGL: Commercial.” Gizmodo’s source indicated that the final version of the document was originally intended for release on January 4, which would have given companies and creators seven business days to agree and comply.

What’s changing in the new OGL?

The Updated OGL is divided into Non-Commercial and Commercial agreements, and the rules are slightly different if you’re making money from direct sales or access to your work. The biggest change between the two sections is a Tiered Earning system (more on that later), new royalties, and rules for the use of crowdfunding. There is some clarity given about Patreon and tips — basically if your content is available for free elsewhere, but people can support you voluntarily without having their access affected, you are considered non-commercial.

Additionally, all creators will need to clearly and deliberately distinguish “their content” from “licensed content.” The new document reads that this must be done “in a way that allows a reader of Your Licensed Work to understand the distinction without checking any other document.” The Updated OGL suggests a different colour font, asterisks on the page, “or putting a separate index or list in the back of Your Licensed Work that lists out what, exactly, You used from the SRD.”

Other parts of the new OGL document create a tiered system of categorising licensees based on their revenues from commercialized work under the updated OGL.

Will OGL publishers have to pay royalties?

Probably not. Unless they are making over $US750 ($1,041),000 ($1,041,150), licensees get to keep the money they earn. But the new OGL states that the Commercial Agreement “covers all commercial uses, whether they’re profitable or not.” So if you go into the red on a Kickstarter that earned $US800K in backing money, you will still owe Wizards of the Coast, regardless of the fact that you did not profit from your venture.

“Note that if You appear to have achieved great success… from producing OGL: Commercial content, We may reach out to You for a more custom(and mutually beneficial) licensing arrangement,” the document notes, indicating that WotC is open to creating custom contracts and agreements, but at their discretion. This could indicate that “subsidized competition” like Pathfinder might not get a great deal.

The revenue tiers are as follows:

A. Initiate Tier. If You have registered at least one Licensed Work but haven’t generated $US50,000 ($69,410) or more in total (gross) revenue from OGL: Commercial products in a given year, You are at the Initiate Tier.

B. Intermediate Tier. If Your Licensed Work(s) have generated more than $US50,000 ($69,410) in total revenue in a given year but less than $US750 ($1,041),000 ($1,041,150), You are at the Intermediate Tier.

C. Expert Tier. If Your Licensed Work(s) have generated at least $US750 ($1,041),000 ($1,041,150) in total revenue in a given year, You are at the Expert Tier.

According to the document, “If, and only if, You are generating a significant amount of money (over $US750 ($1,041),000 ($1,041,150) per year across all Licensed Works) from Your Licensed Works, The revenue You make from Your Licensed Works in excess of $US750 ($1,041),000 ($1,041,150) in a single calendar year is considered “Qualifying Revenue” and You are responsible for paying Us 20% or 25% of that Qualifying Revenue.”

The draft goes on to explain that if you make $US750 ($1,041),001 ($1,041,151), you will owe Wizards of the Coast 25 cents ($0.35), as they are only asking for royalties on the one dollar made in excess of the Expert Tier. As stated in their announcement in December, WotC suspects that “less than twenty” companies are at the Expert Tier.

Who has to register work with Wizards of the Coast?

The Updated OGL says that “no matter what Tier You are in or how much money You believe Your product will make, You must register with Us any new Licensed Work You intend to offer for sale… including a description of the Licensed Work. We’ll also ask for Your contact information, information on where You intend to publish the Licensed Work, and its price, among other things.”

Creators will also be required to use a specific badge in order to publicly and obviously identify their work as covered by the updated OGL, and they will have to give WotC a copy of the publication. The early draft suggests that many of these processes will be handled through the company’s official digital toolset, D&D Beyond.

This is a significant change from the original OGL, which allowed creatorspublish without reporting. While it makes sense that Wizards wants to monitor who is using the Open Game Content, this feels like an impossible task. People are selling their work across dozens of platforms, and sometimes one product is being sold on multiple platforms. Whatever the reporting system looks like, the biggest burden will likely be on the smallest creators.

Kickstarter is D&D’s preferred crowdfunding platform

Online crowdfunding is a new phenomenon since the original OGL was created, and the new licence attempts to address how and where these fundraising campaigns can take place. The OGL 1.1 states that if creators are members of the Expert Tier, “if Your Licensed Work is crowdfunded or sold via any platform other than Kickstarter, You will pay a 25% royalty on Qualifying Revenue,” and “if Your Licensed Work is crowdfunded on Kickstarter, Our preferred crowdfunding platform, You will only pay a 20% royalty on Qualifying Revenue.”

This means that the Updated OGL is directly encouraging Kickstarter over any other platform, including private company sites, as any non-Kickstarter revenue over $US750K will incur a 25% royalty, and only Kickstarter revenue gets a break. There is no reason stated why Kickstarter is Wizards’ preferred crowdfunding platform.

There is also a section in the Updated OGL dedicated to conditions surrounding crowdfunding. Even for Initiate and Intermediate tiers, there are strings attached to using any crowdfunding platform, not just Kickstarter, to get a project off the ground. The two main points are that “you may only crowdfund the production of Licensed Works,” and that “no infringing materials are given out as perks or rewards.”

The power is back at Wizards of the Coast

While there is plenty more to parse, the main takeaway from the leaked OGL 1.1 draft document is that WotC is keeping power close at hand. There is no mention of perpetual, worldwide rights given to creators (which was present in section 4 of the Original OGL), and one of the caveats is that the company “can modify or terminate this agreement for any reason whatsoever, provided We give thirty (30) days’ notice.”

WotC also gets the right to use any content that licensees create, whether commercial or non-commerical. Although this is couched in language to protect Wizards’ products from infringing on creators’ copyright, the document states that for any content created under the updated OGL, regardless of whether or not it is owned by the creator, Wizards will have a “nonexclusive, perpetual, irrevocable, worldwide, sub-licensable, royalty-free licence to use that content for any purpose.”

There are a lot of implications in this extended policy, and the ramifications of this updated OGL could have a chilling effect on new licensed products. As only “static” products are included, all work that publishers do for virtual tabletops may have to be offered as non-commercial, free products, which de-incentivizes their production. The royalties associated with any company making above $US750K could also prompt publishers to hold back extra products or scale down projects so they stay under the Expert Tier.

Wizards of the Coast is clearly expecting these OGL changes to me met with some resistance. The document does note that if the company oversteps, they are aware that they “will receive community pushback and bad PR, and We’re more than open to being convinced that We made a wrong decision.”

io9 has reached out to additional publishers and creators, and will update this article as new information becomes available.

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