Chad Perrin: SOB

31 March 2009

What if 4E was open?

Filed under: Geek,Liberty,RPG — Tags: , , , — apotheon @ 01:54

This is part of my RPG series of entries here at SOB. See the inaugural entry in the series for more details.

Chris, over at 6D6 Fireball, has a recent piece called What if 4e was free? In it, he floats the idea of building long-term success for the Dungeons & Dragons brand by giving away all the core books as black-and-white PDFs. The idea is that this would make it easier for more people to get into the game, and would build a lot of goodwill, as well as providing a bunch of fans with the impetus to buy more non-core game books and merchandise.

Part of the reason something like this sounds like a good idea is the fact that WotC/Hasbro has burned a lot of gamer goodwill by reversing its position on open gaming. With 3E, Wizards of the Coast introduced the Open Game License, which essentially made the core rules of third edition Dungeons & Dragons into an “open source” game. While the contents of the WotC books themselves were covered by copyright, all rights reserved, WotC released the System Reference Document, which consisted entirely of materials subject to the terms of the OGL.

As pointed out in Dungeons & Dragons: The gamers are revolting! Rebecca Bryant points out what many of us already know — that, after years of declining sales, 3E and the OGL was a shot in the arm for D&D sales and for the RPG industry as a whole. Accompanying the rise of D&D, though, was the rise of third-party publishers of D&D compatible game books, and even of competing, nearly compatible systems, such as Green Ronin Publishing’s True20, all made possible by the OGL. Dozens of small, essentially basement-run publishers sprang up to create new gaming materials that would otherwise never have existed, producing a cottage industry that owed its entire existence to the OGL.

Well, darn. Rejuvenating the D&D brand also generated a whole new community of small publishers making money off of ideas inspired by, and usually dependent on, WotC’s D&D books. WotC/Hasbro decided things had to change. As Rebecca Bryant said:

But it didn’t last long. Perhaps threatened by the upsurge in competition, Hasbro and Wizards of the Coast attempted to recall the open license and revoke the rights of third-party publishers, and supporters of the open license were fired en masse. When they found that the license could not be revoked, they began work on a new edition of D&D that would not fall under the open license. They banked on the brand name’s popularity forcing the industry to comply with their new standard and created an almost unusably restrictive “game system license” allowing minimal third-party support for their new edition.

Like many industry dominating corporations, the WotC/Hasbro collective decided it was in its best interests to make sure that nobody else got to make any money off its core brand or anything spawned by that brand. I keep seeing this sort of thing happen — in music, fiction publishing, online news, and other industries dependent on copyrightable works — and, pretty much every time, I find myself shaking my head in incredulity at the short-sighted stupidity of such business strategy. Fans and customers get alienated, and other businesses are destroyed, all for no real benefit in the long run. Getting all the profit for oneself doesn’t ensure you’re going to make more money. If your business dominates 90% of an industry, and you decimate (literally, “reduce to one-tenth”) destroy a 90% majority of the industry, gaining total control of the whole industry means you’ll be left with a ninth of your previous profits.

(edit: as pointed out in comments, I had a brain fart in which I managed to reverse the definition of “decimate”, so I altered the sentence accordingly)

Decimation isn’t what’s happening to the RPG industry, of course — at least, not yet. WotC/Hasbro isn’t proving nearly that effective in destroying the competition. In fact, it seems to be increasing the competition with its actions, turning third-party publishers of materials that supported D&D in the past into first-party publishers of competing products in the present.

If 4E was as open as 3E, there may still have been attempts to create competing 3E-compatible game lines. They probably wouldn’t have been likely to get a chance at as much market share as they do get now, though — because third-party publishers wouldn’t have been effectively driven away from 4E by its restrictive licensing policies.

As someone who prefers the underlying system of 3E over that of 4E, there’s definitely an upside to WotC’s reversal of direction on licensing; Pathfinder RPG, my favorite descendant of the original D&D game, probably wouldn’t even exist without WotC/Hasbro attempts to drive third-party publishers out of business. Still . . . my ideal world would have both Pathfinder RPG and D&D 4E (leaving aside for the moment that 4E wouldn’t be called “D&D” in my perfect world), and both would be licensed under open terms (the OGL would do well enough).

Open licensing helped make D&D 3E the success it was. Restrictive licensing has only stood in the way of 4E’s success. This is the kind of lesson I’ll be taking to heart in the future, as I work on an RPG of my own for publication. It’s also the kind of lesson I don’t expect any industry dominating corporation will learn any time soon.

16 Comments

  1. …attempted to recall the open license…

    I tried to find a citation for the source of this information, which I can easily believe but would prefer hard evidence for. Is there proof to this (did one of the fire supporters say it)?

    Comment by Mad Brew — 31 March 2009 @ 02:15

  2. I’m not sure they literally tried to “recall” it. I seem to recall reading something about doing some kind of legal analysis to see what they could do about preventing some of those third-party publishers from doing some of what they were doing, but that nothing came of it. I don’t remember a specific article to that effect, though.

    There are a couple of statements made in Dungeons & Dragons: The gamers are revolting! that seems slightly suspect to me. It might have been an exaggeration. I think the overall message is a good one, though, and well presented.

    Comment by apotheon — 31 March 2009 @ 02:24

  3. Open licensing helped make D&D 3E the success it was. Restrictive licensing has only stood in the way of 4E’s success.

    That depends on your interpretation of success. The OGL sparked a whole new industry, but how much of that turned into dollars for WoTC? Since they tried to revoke the OGL, I’m guessing not enough.

    Regarding 4e success, I see many posts in forums and blogs about it one way or the other, but never any evidence.

    Comment by Tom — 31 March 2009 @ 02:29

  4. Considering D&D was about ready to vanish from the market entirely before 3E, I’d say that “success” involved quite a few dollars.

    Since they tried to revoke the OGL, I’m guessing not enough.

    If you think it’s that simple, you probably don’t pay a lot of attention to how business works in the real world.

    Comment by apotheon — 31 March 2009 @ 02:32

  5. If you think it’s that simple, you probably don’t pay a lot of attention to how business works in the real world.

    Indulge us then

    Comment by Tom — 31 March 2009 @ 02:36

  6. Obligatory somewhat irrelevant point:

    “decimate (literally, ‘reduce to one-tenth’)”

    To decimate was to literally kill one in ten, not to kill all except one in ten. However it is used figuratively, it’s literal meaning is unchanged.

    Thus if they were to ‘decimate’ their market, they would reduce that market by one tenth and their share would be (ironically) unchanged in your hypothetical (90% of the pre-decimation market equals 100% of the post decimation market).

    However, I believe that the essential point still stands: They would probably be better off aiming for a (still majority) piece of a potentially much larger pie, rather than trying to grab all of a much smaller one.

    Carl

    Comment by Syrsuro — 31 March 2009 @ 02:42

  7. Tom:

    It’s not that difficult.

    1. A product line is failing.

    2. You release a new version under a permissive license.

    3. It gains popularity rapidly and regains its market dominance.

    4. You decide to revoke the permissive license that corresponds with the boost to success, because you think it’s standing in the way of greater profits.

    There. Between that and what you previously said, there are now two, completely antithetical, interpretations of the role the license plays in your product’s profitability. Does it still sound like as simple a situation as how you presented it? Seriously?

    Carl:

    Oops. You’re right. I’ll add a note to the SOB entry to that effect.

    Comment by apotheon — 31 March 2009 @ 02:42

  8. You decide to revoke the permissive license that corresponds with the boost to success, because you think it’s standing in the way of greater profits.

    Is it? I think that’s the question. If it is, then changing the license was a no-brainer.

    Is 4th edition not a success so far? I’m just wondering if there is any actual evidence that changing the license was a bad business move.

    Comment by Tom — 31 March 2009 @ 03:08

  9. Is it? I think that’s the question. If it is, then changing the license was a no-brainer.

    How do you measure the benefits of preventing others from publishing products you weren’t planning to publish yourself anyway against the loss of free marketing provided by those products and goodwill among fans/customers who like open licensing?

    Is 4th edition not a success so far? I’m just wondering if there is any actual evidence that changing the license was a bad business move.

    All we really know so far about the effects the licensing change is having is:

    1. many third-party publishers have stopped supporting the core D&D product line with free marketing

    2. at least some gamers have expressed extreme distaste for the new licensing model and prefer games published under a more open license

    Basically, all we really know about how the license changes have affected the success of the game and its ability to generate profits is that some advantages provided by the previous licensing model have evaporated under the new licensing model.

    Comment by apotheon — 31 March 2009 @ 03:19

  10. “A product line is failing. You release a new version under a permissive license. It gains popularity rapidly and regains its market dominance. “

    But that’s correlation, not causation. It might be causal (and to a degree I’m sure it is) but was the permissive license really the core of 3Es success? I don’t know what we can easily say. 3E certainly brought me back to gaming with DnD but it wasn’t cause I gave a flippidy doo about the OGL. Releasing a new edition and the permissive licensing scheme are two different things which interact, but

    And has 4e not been a success? Do we know numbers? Relying on blog and forum posts to determine that is sketchy in reliability.

    Comment by justaguy — 31 March 2009 @ 03:24

  11. But that’s correlation, not causation.

    I didn’t claim it was necessarily causation.

    Pointing out it’s correlation, and not (necessarily) causation, doesn’t mean it’s not a sign of causation.

    It might be causal (and to a degree I’m sure it is) but was the permissive license really the core of 3Es success?

    I didn’t say it’s the core of 3E’s success. I think it is at least a significant contributing factor, though — since the prevalence of expansions from third-party publications pretty obviously contributed to increased popularity.

    And has 4e not been a success? Do we know numbers? Relying on blog and forum posts to determine that is sketchy in reliability.

    I don’t know numbers. Yes, relying on posts in Weblogs and fora is a trifle sketchy — but I didn’t make a statement to the effect that 4E isn’t doing well, either. I’m just pointing out that there are reasons to believe it’s not going to do as well as it could with an open licensing model (that, in fact, there are at least some benefits of open licensing that have been lost), and that it’s typical for industry dominating corporations to make decisions like this without considering all the potential consequences.

    Comment by apotheon — 31 March 2009 @ 03:33

  12. I think 4e is about as open as WotC is likely to ever allow it to be. Third parties are relegated to producing modules that can be used with the core, without being able to substantially alter the core. For WotC, there was just too much money being made by others in the 3e system. As long as WotC owns the core, and is able to feed if out in $35 chunklets every couple of months, they’re maximizing revenue via that control. That keeps the business people happy. Is it a long term model for success? Depends on how much 4e stuff the market consumes…

    Comment by anarkeith — 31 March 2009 @ 06:59

  13. For WotC, there was just too much money being made by others in the 3e system.

    That’s sorta my point — WotC/Hasbro seems to be far too busy worrying about how much money other people are making to think about whether that cuts into its own profits (particularly in the long term).

    As long as WotC owns the core, and is able to feed if out in $35 chunklets every couple of months, they’re maximizing revenue via that control.

    Not necessarily. They may be maximizing their revenue relative to competitors, but that doesn’t mean they’re maximizing revenue relative to a business model that allows competitors to exist.

    Comment by apotheon — 31 March 2009 @ 09:06

  14. I think making 3rd Edition open was the best thing that has happened to the gaming community since the creation of the original D&D.

    Making 4e closed (or at least almost closed) is possibly the worse thing, a definite step in the wrong direction.

    Hasbro, like many pre-internet companies is obsessed about control. It thinks that without control it cannot make money.

    This is wrong.

    Ideas and the electronic bits want to be free. Fighting against this is fighting your own customers. The way to make money from RPGs is selling convenience ( paying the PDF because it includes all the errata updates ), beauty ( a high quality book that is also convenient ), services ( DDI ) and add-ons ( miniatures, t-shirts, gen-con etc etc ).

    Comment by Chris Tregenza — 1 April 2009 @ 04:15

  15. Thanks for reading and commenting, Chris.

    I seem to have missed the little bitty thing at the bottom of the post that says “chris”, declaring you the author of What if 4e was free?, so I didn’t know for sure it was you that wrote it. I’ll edit the above SOB entry to reflect your authorship.

    Comment by apotheon — 1 April 2009 @ 08:31

  16. […] What if 4E was open?, I discussed the business possibilities available to Wizards of the Coast and Hasbro via opening up […]

    Pingback by Chad Perrin: SOB » What if D&D was more restrictive? — 7 April 2009 @ 09:13

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