In 1997 Wizards of the Coast bought Dungeons & Dragons publisher TSR, rescuing the company from bankruptcy. New D&D head Ryan Dancey looked for ways to turn the game into a healthy business. Dancey saw fan contributions as an enhancement to the D&D community that strengthened the game’s place in the market. Support from fans and from third-party publishers encouraged more people to play D&D. Dancey wrote, “This is a feedback cycle—the more effective the support is, the more people play D&D. The more people play D&D, the more effective the support is.” Besides, the numbers showed that the D&D business made money selling core books. Why not let fans and other companies bear the weight of supporting the game with low-profit adventures, settings, and other add-ons?
Dancey’s thinking led to the introduction of the Open Gaming License and the d20 License. Using these licenses gamers and gaming companies could create and distribute products compatible with the D&D rules. Sometimes the products competed with Wizard’s own publications, but the overall contributions from the community helped the game flourish. Other role-playing game companies recognized the success of this strategy and introduced similar licenses for their games.
The OGL granted a perpetual license, encouraging game publishers to view the OGL as a safe agreement to base investments on. “When v1.0a was published and authorized, Hasbro and Wizards of the Coast did so knowing that they were entering into a perpetual licensing regime,” Dancey said. However, the OGL does not grant an irrevocable license, and to lawyers, perpetual licenses can sometimes be revoked.
In 2022, Hasbro CEO Chris Cocks and Wizards of the Coast CEO Cynthia Williams appeared in a presentation for investors. Williams touted D&D’s popularity but described the game “under monetized.” Wizards aimed to do a better job of gaining income from the game, bringing more earnings to stockholders.
With monetization in mind, Wizards executives probably looked at other publishers profiting from D&D-compatible products and felt D&D’s owner deserved a cut. Royalties on a million-dollar Kickstarter for a D&D-compatible product would hardly move the bottom line of a company the size of Hasbro, but multiply that cut by 10 or more multi-dollar dollar kickstarters per year, every year, and the payoff adds up. So, the company asked lawyers to find a way break the OGL, and the legal team found a potential out in the word “authorized.”
The OGL states, “You may use any authorized version of this License.” What if Wizards simply declared current version of the license “unauthorized,” and then replaced the OGL with a new version containing terms that favored the company? Wizards prepared a FAQ that explained, “OGL 1.0a only allows creators to use ‘authorized’ versions of the OGL which allows Wizards to determine which of its prior versions to continue to allow use of when we exercise our right to update the license. As part of rolling out OGL 2.0, we are deauthorizing OGL 1.0a from future use and deleting it from our website. This means OGL 1.0a can no longer be used to develop content for release.”
The new OGL license required publishers to register their products, demanded royaties from larger publishers, and enabled Wizards to revoke the new agreement. Wizards surely knew such a move would meet resistance from the D&D community, but they made some allowances to minimize criticism.
- The new OGL introduced some high-minded changes such as rules that prohibited material that is “blatantly racist, sexist, homophobic, trans-phobic, bigoted or otherwise discriminatory.” Wizards undoubtedly supported such additions, but they also gave the company a way to claim that the new agreement came from noble goals. In a FAQ, Wizards states, “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.”
- The new OGL only demanded royalties from the few companies who grossed more than $750,000 on D&D-comparable products. Wizards probably hoped that this would leave the vast number of D&D creators with no cause for complaint. That proved a miscalculation, perhaps because most D&D creators eyeing a million-dollar Kickstarter think, someday that could be my project.
- The high-royalty rates in the new OGL only represented an opening offer in a negotiation. In late 2022 Wizards gathered about 20 third-party creators to outline the new OGL and to offer 15% royalty rate rather than 25% to publishers willing to sign a separate agreement. For growing companies, the OGL promised, “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.”
Likely Wizards executives hoped big publishers would come to terms before the new OGL became public, smaller publisher and fans would consider themselves unaffected by the OGL, and any lingering objections would be forgotten. They miscalculated. A draft of the new OGL leaked, igniting a firestorm of criticism.
For eight days, Wizard’s avoided commenting on the leak. According to insiders, the company’s managers saw fans as overreacting and calculated that in a few months everyone would forget the uproar. The company drafted a FAQ they hoped would soothe fans and help speed acceptance.
Meanwhile, many of the biggest OGL publishers announced plans to drop the OGL or to introduce their own gaming licenses for their product. A fan-led campaign to send a clear message to Wizards by canceling D&D Beyond subscriptions went viral. So many gamers went to the site to stop payments that the traffic temporary shutdown the page. The story reached mainstream news.
Wizards of the Coast got the message. They scrambled to make accommodations, first by promising to remove the most onerous provisions from the new license, and then by committing to keep the existing OGL. Ultimately, Wizards put the Systems Reference Document for D&D 5.1 into the Creative Commons using a perpetual, irrevocable open license agreement outside the company’s control.
Next: Number 2.