Hasbro delays new Dungeons & Dragons licensing rules

The license change comes ahead of the release of the movie Dungeons & Dragons: Honor Among Thieves starring Chris Pine and a recent deal with Paramount+ to stream D&D TV shows. Additionally, “True Blood” actor Joe Manganiello will direct a documentary about the game, along with Kyle He Newman, which is set to be released in 2024, to mark the game’s 50th anniversary.

Wizards of the Coast president Cynthia Williams told investors in a virtual UBS fireside chat in December: “But the brand is really not monetized well.”

Wizards, which also owns the fantasy card game Magic: The Gathering, surpassed $1.2 billion in 2021 revenue. This represents approximately 20% of Hasbro’s annual net revenue. Hasbro reports that the division generated about $986 million in his first nine months of 2022. The company is expected to announce fourth quarter results next month.

Williams pointed out that the majority of D&D-related purchases come from Dungeon Masters, game organizers who create settings and challenges for players to face. Many of these purchases come in the form of source books and campaign modules used to run or supplement long-running campaigns.

Wizards hopes to generate more cash with its recently acquired D&D Beyond, a digital toolset and game companion for the 5th edition of Dungeons & Dragons that Hasbro acquired last year for $146.3 million. increase. We also plan to launch an online his tabletop space that players can use for virtual games, and are in the process of updating and expanding the game rules.

This digital investment is a strategy that allows Wizards of the Coast to “unleash the type of recurring spend found in digital games,” Williams said.

Hasbro’s restructuring of OGL is not a surprise move for the business, said MKM’s Handler.

“They aren’t doing what other big companies aren’t doing to protect their intellectual property,” he said.

Hasbro, under its current open license, allows third-party authors to develop their own settings, monsters, and magic items using the game mechanics, dice-rolling system, and combat framework for free. is allowed. Companies like Paizo, Kobold Press, Hit Point Press, and The Griffon’s Saddlebag have entered the market to sell companion books for D&D players.

These creators could not use Wizard’s intellectual property (characters, setting, or plot), but could publish new material that used the same mechanics without paying the company for the right to use it. This was a boon for these companies as they didn’t have to develop a new set of rules and were less likely to enter into a copyright dispute with Hasbro.

With the OGL update, Hasbro had originally considered charging a fee to these sellers if they generated significant profits from their products in the calendar year.

Businesses with revenues above $50,000 were required to report profits and products, and were required to earn a creator product badge for their work. According to OGL 2.0, there is a 20% fee for each amount over $750,000. In OGL 1.1 that fee was going to be 25%.

Noah Downs, an intellectual property attorney and partner at Premack Rogers Law Firm, said, “What I found unusual about this contract was that the numbers being talked about meant gross income, not net income. to be,’ he said. In other words, content creators should have been charged based on revenue, not profit.

The D&D community frowned upon this. This is because most of the third-party creators in this space use crowdfunding websites to gather support for their projects, raise funds, and produce their projects. These sites charge around 7% on Kickstarter, 8% on Patreon and 20% on Roll20. If your crowdfunded project exceeds $750,000, you will be required to pay these fees in addition to your license fee to Wizards of the Coast.

“Every Kickstarter campaign turns into a coin toss,” said Holik. “If you do it too well, the surroundings will collapse”

Holik has launched #OpenDnD, a website that brings D&D fans together to speak out against Hasbro’s open license changes. Downes is Holick’s attorney and also serves as the campaign’s legal and media representative.

The purpose of the petition is to force Hasbro to completely withdraw its proposed new open license and to educate the larger Dungeons & Dragons community about what the new OGL means for fans of the game, not just third-party publishers. That was it.

Before Hasbro’s OGL postponement, Downes and Holick both told CNBC that by taxing third-party content creators and taking away their intellectual property, Hasbro and Wizards would destroy the D&D community. .

“It’s strange what Wizards are doing,” said Horik. “They either don’t understand the market they are serving, or they are terrifying in and of themselves.

There was growing concern that the community would fall apart if publishers were forced to move away from Dungeons & Dragons game mechanics to develop their own game systems.

Holik also feared the licensing crackdown would negatively impact the types of content available to the D&D community, including products for the LGBTQ community and people of color. Much of the content produced through these third-party publishers is often more diverse and less likely to center around cisgender white male heroes.

In 2020, Wizards of the Coast changes the traditional definitions of certain races, including orcs and drow, which were previously associated with real-world ethnic groups and portrayed negatively in D&D literature, by changing these Addressed some of the concerns of

The company has revamped these groups in several campaigns to make them morally and culturally complex people.

“One of the explicit design goals of 5th Edition D&D was to portray humanity in all its beautiful diversity by depicting characters representing a range of ethnicities, gender identities, sexual orientations, and beliefs. to do,” the company said at the time. “We want everyone to feel comfortable around their gaming table and see our products as a positive reflection of themselves.

Hasbro intends to create a new OGL to prevent D&D content from being used in “hateful and discriminatory products” and to prevent people from using D&D in blockchain games and NFTs. said.

In a statement for D&D Eyend, Hasbro said, “The license back language was intended to protect us and our partners from creators who falsely claim that they stole their work because of an accidental similarity.” As we continue to invest in and pursue partnerships in film, television and digital games, the risks are too great to ignore.”

According to the company, the new OGL will include provisions to address this risk, but will do so without a license-back clause.

“Your ideas and imagination make this game special and it belongs to you,” Hasbro wrote.

While the backtracking may quell immediate concerns about the D&D license, Holick says fans have been so reluctant about the company’s actions that it has created a rift between Wizards and its community. .

“Wizards of the Coast has destroyed decades of trust in days, and the community will be skeptical of all their moves going forward,” he said Friday. .

He further pointed out that the company’s attempts to modify the OGL show a lack of awareness that the actual product of D&D is the story.

“And if you try to steal someone’s story, they’ll fight with all their might,” he said earlier. “And that’s what Wizards are discovering.”