Mafia of the Coast

WotC and the so-called Open Gaming License

Over the past few months rumors were circulating in the tabletop RPG community that Wizards of the Coast - company that owns the Dungeons and Dragons IP - was going to make changes to OGL, the license which undergirds a large chunk of the entire TTRPG community. Recent leaks seem to confirm that they are set on this. I think this is a despicable move, a blatant anti-competitive power grab, aimed at either wiping out most first- and third-party creators in this space or leashing them into creative serfdom, forced to dance and bow at the whim of WotC while paying them a tribute that would make the Corleones blush. Let me explain what is going on.

1. What is OGL?

We’ll start with some background. In the early 2000s, the tabletop RPG hobby was much less popular than it is now. Wizards of the Coast was the company developing the third edition of the Dungeons and Dragons TTRPG, in their role as a subsidiary of Hasbro. In an effort to expand their share of the market, they released the OGL - Open Gaming License - allowing third-party creators to publish DnD content. You can find the text of the license here on Wayback Archive, it’s pretty short.

There are two key paragraphs in OGL, numbered four and nine: 

4. Grant and Consideration: In consideration for agreeing to use this License, the Contributors grant You a perpetual, worldwide, royalty-free, non-exclusive license with the exact terms of this License to Use, the Open Game Content.

9. Updating the License: Wizards or its designated Agents may publish updated versions of this License. You may use any authorized version of this License to copy, modify and distribute any Open Game Content originally distributed under any version of this License.

As you can see, it is very permissive. As long as your material included a copy of OGL, you could freely refer to other OGL material and not have to fear a lawsuit. Adoption of the OGL lead to an explosion in TTRPG material published, and was one of the reasons for DnD assuming the market leader position it holds nowadays, accounting for 50-80% of the market, depending on which metrics you use.

But OGL was and is currently used outside of the DnD sphere too. For example, Mutants and Masterminds, a superhero RPG, is published under OGL, despite not having anything to do with DnD. At the end of the day, it is simply much, much easier to use an already existing license which would allow third-party creators to easily contribute to your RPG than to try and create something in-house. Likewise, as a third-party creator, you would be much more willing to publish for a system which uses a license which you know does not lead to lawsuits, compared to an unknown, novel license.

2. What are the leaked changes?

OGL 1.1 was leaked to a Gizmodo reporter Linda Codega, see a twitter thread here and an article here. In my opinion, the article does not properly convey the gravity of the situation: WotC isn’t “tightening its grip on competition”, the term you are looking for is “strangulation”.

Let’s go over the changes:

1. Original OGL, in paragraph 9, stated that “any authorized version” of the OGL license may be used. OGL 1.1, within its text, explicitly says that OGL 1.0 is no longer authorized: therefore, any and all protections anyone had using OGL 1.0 are completely gone, vanished like the wind, unless they are explicitly included in OGL 1.1 and you agree to use it.

2. All commercial projects working with OGL are now required to report their revenue to WotC. Any revenue - not profit, revenue before expenses - above 750 thousand dollars per year across all OGL products is subject to a licensing fee of 25%. So, if your company made 1 million dollars, you now owe 62 thousand in licensing fees to WotC. If you made 2 million, you owe 312 thousand - more on this later.

3. WotC may modify or revoke this license from you at any time for any reason, with a 30 days notice.

4. WotC acquires a “nonexclusive, perpetual, irrevocable, worldwide, sub-licensable, royalty-free license to use [any content you create under OGL 1.1] for any purpose”. In other words, if you use OGL content commercially, you owe WotC money; if they use your content, they don’t owe you shit.

5. The new license also states that it “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.”

6. Finally, the license includes a “poison pill”: if you agree to OGL 1.1, then you revoke your rights to publish under OGL 1.0, forever.

3. Is this bad?

Yes, this is incredibly bad.

This new license is like an arrow aimed at the heart of the TTRPG community. One of the first things any DM or player learns is the value of sharing ideas in a community - be it character builds, monster stat blocks, adventure ideas, or even just generic advice. In fact, “creative appropriation” is the core of any GM’s toolset. In much the same way, free exchange of ideas between system designers and adventure writers is what leads to solid RPG design. Someone comes up with a cool mechanic, another person comes up with a cool boss monster, a third combines them into an adventure, a fourth writes a novel based on that adventure, a fifth makes a videogame sequel to the novel - as a result, all of them are better off than they would have been individually. Ideally, they can also be paid for it.

OGL 1.1 cuts across this idea of freedom. Instead of an equitable playing field, WotC seems intent on establishing a master-serf dynamic: they can use your creations, but you can only use their creations how they like it. If you make a great, interesting adventure, then they can unilaterally develop it into a video game, but you cannot do this. At any point, and for any reason, they could remove the legal security the license provides you with only thirty days notice. And if, god forbid, you get too successful? They will take a cut of your money anyways.

OGL is one of the core reasons why the TTRPG hobby has flourished to the point where it is today. It allowed independent creators to build on top of systems, and eventually flourish into dozens of small companies we have nowadays, secure in the knowledge that they will not be hit by a lawsuit, from WotC or from anyone else creating under OGL. Without OGL, someone writing for Mutants and Masterminds, or for Pathfinder 2e, or for FATE, could lose their license to use the content of other writers for those systems at the whim of WotC. This would be a deadly blow to the entire hobby.

The monetary cut WotC would like to demand is likewise destructive. Two of the largest video game products in the TTRPG space in the latest years - Pathfinder: Kingmaker and Pathfinder: Wrath of the Righteous - have collected enough on Kickstarter to move past the cutoff threshold. Both of these properties are based on OGL content. Given that videogame development happens on razor-thin margins, needing to pay this additional licensing fee would significantly increase the chances of sinking both properties. Likewise, the largest direct competitor of WotC - Paizo - is well beyond the licensing cutoff, and would be severely damaged if not outright sunk due to needing to pay 25% of their revenue in additional expenses.

Beyond being bad on its merits, this license is a statement. It says that WotC feels comfortable in their position as a market leader, and intends to use their position of power to secure this domination for years to come. It says that WotC isn’t in this to make the hobby better, or to make the players happier: they are in this to rake in money by whatever means necessary, even if it means destroying the common goods we all rely on. It says that WotC isn’t afraid to use dirty tactics to shut down their competition.

Ask yourself: what other tactics could they turn to next?

4. Can’t you just switch the license / keep using OGL 1.0?

Not really!

First of all, you cannot “keep using” OGL 1.0, assuming WotC’s legal trickery pans out. OGL 1.1 de-authorizes the entire license: it means that there is no more OGL 1.0, it’s just gone, not a license anymore. On top of that, the text of OGL 1.0 is copyrighted by WotC: I see no particular reason why they couldn’t sue you for copyright infringement simply because you have the non-functional OGL 1.0 text in your books.

But let’s consider what you’d have to do to switch the license. If you publish physical, paperback books, then you already have a whole lot of printed product on the shelves which includes OGL 1.0. You can’t just “switch out” the license there: you would have to re-print the entire run. At best you may be able to split up the already existing books back into pages, take out the page which contains the license, and slot in a newly printed page with a new license; but I am not sure wherever this labor would be cheaper than just a direct reprint. This would lead to massive costs, which you likely cannot afford.

Even if you only distribute PDFs, you would need to pay for the work of an editor and a formatter, to make sure that your new license doesn’t screw up how the overall product looks like. While this is much, much cheaper than reprinting book runs, this will still involve costs.

Furthermore, consider the situation where your product interacts with DnD material, as opposed to being completely unrelated like Mutants and Masterminds. For example, imagine that you have published a dungeon module which depends on the exact mechanics of a simulacrum spell. In that case, you may have to throw out the entire product!

Finally, if what you do is not covered by OGL 1.1 - e.g. if it’s a DnD-based video game, actual play stream, podcast, an internet comic, or something else - then you may need to switch your entire business model, or die.

For some products, switching the license will be fairly easy; but for a lot of them, it is prohibitively difficult or impossible.

5. Is this even legal? Can WotC really do this?

Nobody knows! I have seen several lawyers that play DnD comment on the leaked changes. Some claim that WotC can go through with it, others say there are ways to fight against it, yet others say this revocation business is bogus. But in fact, in my opinion, it doesn’t matter if it’s legal, what matters is how people will react to it.

Imagine that you are a small, third-party publisher. You have 10 employees and a revenue stream of, let’s say, 20-30 thousand per month. You publish primarily DnD content under OGL 1.0. OGL 1.1 comes out, and you are considering what to do. Say you decide that WotC is in the wrong and their argument that they can deauthorize a perpetual license is bogus, and go on with your day, working under OGL 1.0.

Now say that WotC sends you a cease and desist letter, saying that you violate their license agreement, and if you don’t agree to all OGL 1.1 terms and start publishing things under it, they will sue you for copyright infringement. What do you do?

Let’s say that you are pretty sure you are in the right. You are only creating for Mutants and Masterminds, you don’t touch any WotC property, you don’t really need OGL. Are you going to tell WotC to fuck off?

Maybe. But it’s quite likely you are going to sign.

Why would you do this?

You will do this because WotC is owned by Hasbro, a nine billion with a capital B dollar company. They are like a thug coming into your shop and saying “Oh ho ho, what a nice business you have here. Would be a shame if anything happened to it!”. As a ten person company, realistically, you have no chance of winning against them in court: they will bankrupt you on legal costs before you could eke out a victory. Even if you find some good lawyers who would work for you pro bono, the victory is still not guaranteed: copyright and license law is a lovecraftian chimera, and nobody can tell which way a court case will go before it happens. There is a real chance that you will lose, and then will be forced to pay Hasbro’s legal costs, bankrupting you anyways.

Hasbro has massive resources to project legal power. You don’t. They can wave lawyer teams around, you can’t. In a fight - even an unfair, unjust fight - they will probably win. On a pure cost/benefit analysis, risking a legal fight may be worse than allowing WotC to steal your creativity and dictate what you can and can’t do.

Furthermore, Hasbro might not even threaten you personally! Instead, they could send a false DMCA claim against a website which you use to host your content - be it drivethrurpg, roll20, or some other place. The website, not wanting a fight with Hasbro, would remove your content; and there is nothing you could do about it. Games Workshop has used this tactic for years: it works.

This gets even worse if your situation is less clear cut - for example, if you publish dungeon modules. Yes, maybe on pure merits WotC doesn’t own the idea of making a building plan and putting some monster stat blocks in - assuming none of them are original WotC monsters - but the closer you get to that line, the shakier your legal case will be.

But in fact, probably, it won’t even come to this. Third-party publishers can read this writing on the wall as well as I can, and a lot of them will simply bow their heads and start using OGL 1.1 before WotC even has to send a cease and desist letter. The threat of legal power works, most of the time, just as well as the thing itself.

The clear intention behind this license is to create a chilling effect in the hobby, pushing as many creators as possible into Hasbro-controlled creative serfdom.

6. I think you are overexaggerating, and mafia comparisons are unnecessary.

If you think that the changes described above - changes to a twenty-year old license that is used ubiquitously in the entire industry, changes that go contrary to the explicit promises of the original creators of that license, despite being legally feasible - are exaggerated by me, then frankly you are blind and there is nothing I can say to you. This is an accurate assessment of the situation and the implicit threat put on the table by WotC.

But let’s consider the mafia comparisons. In Italy, the mafia collects pizzo - protection money. Wikipedia gives an average figure of about 450 dollars (420 eur) per month for a retail store. Rental prices in Sicily seem similar to European ones, with websites claiming you can get an apartment for about 600 euros. Let’s assume that rent for a retail location would be larger - let’s say 1500 euros. Let’s further assume that we have a single employee paid minimum wage of 1000 euros per month. This gives us an absolute minimum revenue of 2500 euros, before accounting for costs of purchasing things to sell, heating, electricity, and everything else - otherwise we simply could not stay afloat. 420 euro protection money would then be about a 17% revenue tax, as opposed to a 25% one by WotC.

Some may object that this tax only applies after 750k revenue per annum, thus only affecting large firms: it is not correct to compare it to protection money which affects everyone. I will respond that the 750k cutoff can be changed by WotC with a 30 day notice, and WotC has already shown full willingness to rake third party creators for all that they have.

This tax by WotC does not provide you any service other than removing the threat of litigation by WotC - this isn’t the case of Steam, where the platform cut at least pays for server and maintenance costs. I think it’s thus accurate to compare it to mafia protection money. Only you can decide how does the threat of breaking your legs compare to the threat of being sued to oblivion, or how does the moral crime of WotC blatantly stealing your creative products with no attribution compare to the moral crime of supporting the mafia, but I do not think the comparison itself is misplaced.

7. Why is WotC doing this?

Some reporters have claimed that leaks are “unconfirmed”, and we should reserve judgment until the changes do in fact happen. I think this is naive. These changes are not random, they do not come out of the blue, and in fact are a part of a historic pattern of behavior on behalf of WotC. Because of this, I do not see any particular need to “reserve judgment”: I fully believe that the leaked license text was real and was intended to be released by WotC. If they back down from this - which so far has not happened - then that would be because of a clear and unambiguous reaction by the community, not in spite of it.

But let's look at the context of what WotC is doing. I will not write my own historical overview: The Alexandrian had already done that. To summarize the historical context: this has happened before. WotC have, already, in the past, performed this same exact trick: bringing all licensing in house, giving themselves unilateral rights to revoke licenses, preventing the creation of derivative content, adding poison pills into the licenses. They have, in fact, done a very similar thing twice, though most people are only aware of the incident with the 4th edition. And they have done this in the name of profit.

His overview was written before the leaks of the exact terms of OGL 1.1, and it’s an ill omen that it predicts the exact same ideas that Hasbro has put into this new license, by simply looking at what they have done in the past.

Hasbro is, once again, lusting for more profit. The company is not doing great. Here is their stock price, over the last five years:

But we do not have to look at overall trends to gauge this: we can look at their actions. Recently, they have appointed an E-commerce veteran as the VP of Dungeons and Dragons. Finally, we can look at the recent Hasbro’s investor webinar, that happened in October 2022. The relevant excerpts have been collected here, or here in an article format. This was a webinar about the future strategy of Hasbro/WotC, focusing on Magic the Gathering and DnD. This is WotC CEO Cynthia Williams, claiming that the “DnD brand is under monetized”, and explaining how they will use the lessons from video game monetization methods to set up a “recurring spending environment”.

Like an old vampire rearing their head from a coffin, WotC is on the hunt again. And just like that vampire, it will kill the things you love, unless we stop them.

8. What can we do?

There are some options available, but I must first make a note of who is responsible. I do not believe that regular employees at Wizards of the Coast bear any responsibility for this. In fact, I think that they are by and large going to be on the side of the community. If you meet a regular employee - such as on twitter - please do not harass them. The problem almost certainly lies with management: people at Hasbro who push WotC to become more profitable, and people at the top of WotC that determine overall company direction.

The strategy therefore should be three-fold: first of all, try to convince people at the top to change direction, by putting on customer pressure. Secondly, give workers at the bottom the resources they need to convince their management directly. Finally, prepare for a potential future legal fight, if WotC decides to force the issue.

I think that the first two strategies are unlikely to work, but are worth trying. With that in mind, you can send a support ticket to WotC, email them at Investigations@wizards.com, or message them on twitter. Likewise, you can message Hasbro customer support at hopp.us@hasbro.com, their legal team at dpo@hasbro.com, their media PR team at HasbroBrandPR@hasbro.com, contact them on twitter, or call them between 8 am and 5 pm EST on their general customer support phone line 1 800 408 0052. Finally, you could sign an open letter to WotC.

The goal here would be to create internal company pressure to revert these proposed changes. It is much easier to argue with your management that some decision is bad when you can say “ok look, I have 10 000 emails right here of people saying they would not buy any dnd products if we go through with this”. With that in mind, if you are going to write to any of these lines, do not copy-paste some email someone else wrote - those would be filtered out as bots - and instead write your own email.

Contact various creators and publishers in the DnD space, and convince them that they shouldn’t sign OGL 1.1. Once their signature is on paper, they are fucked - but as long as they delay and stall and not sign OGL 1.1, as long as they do not fall victim to the fear tactics of WotC, they should be fine. Yes, an individual creator can be threatened by a lawsuit with impunity - but if you organize with other creators, and if a large portion of all creators in this space refuse to bend their necks, then WotC’s tactics will not be so effective. If you yourself are a creator, a publisher, or a potential activist, then join the Defend The OGL discord server, where you could better organize with others of the same mindset.

If you have contact with WotC employees, then giving them the resources necessary to unionize would be a good idea - given that workers are, overall, on the right side here, anything that increases their relative power is good. Even the threat of a potential union drive could put more pressure on Hasbro/WotC.

Long term, it would be important to create a new license to replace OGL: keeping this power in the hands of a company that is clearly willing to abuse it is wrong. I don’t think any direct action needs to be taken here, as this is something various companies in the TTRPG space, such as Paizo, would already be looking at.

Finally, you should organize with other people. The more people are involved, the more effective all of these strategies would be. This goes doubly true for preparing for a potential legal fight to defend the ideas of open gaming: funding lawsuits like that takes a large and tight-knit community. Send this information to people you know - such as your gaming group - and see what they think about it. Join the Defend The OGL discord server, as I have already mentioned. Do whatever you think would be effective, basically.

This license is a very serious move by WotC, and we are lucky we found out about it before it fully dropped. If you enjoy TTRPGs, if you value this hobby - I think the only right choice is to oppose it, by whatever means necessary.

Article cover art made by LadyofHats on imgur, used with their permission.