Let’s Take A Minute To Talk About D&D’s Open Gaming License (OGL)

Hi all! My name is Noah Downs, aka MyLawyerFriend! I am a licensed attorney with a focus on business, and intellectual property issues in the tabletop and digital gaming industries.

There is a lot of confusion and misinformation floating around the internet regarding Wizards of the Coast’s new Open Gaming License (“OGL”), version 1.1, and what it means for the future of D&D content creators. So I wanted to take a few minutes to answer some of the common questions I see out there about the OGL.

OGL Basics

Work
A copyrighted work (or, for simplicity, “work”) is an original creation (such as a graphic, book, video, song, or program) that can be protected by copyright law.

Copyright Holder
A Copyright Holder is the person who holds the rights to a specific Work. This can be the author of the Work, or whoever received ownership from the author.

Open License
Copyright Holders can choose to issue an open license to their Work if they want others to freely build with, customize, or improve the Work. Open licenses give permission to anyone to use the work without cost and minimal restrictions on modifications.

Perpetual License
A Copyright Holder can issue a perpetual license — which is a license to use the Work indefinitely. This only means that the license does not have an inherent expiration date. It can still be terminated or revoked.

Revocable License
A license can be revocable or irrevocable. If a license is irrevocable, then it cannot be revoked by the Copyright Holder. If a license is revocable, then- you guessed it- it can be revoked by the Copyright Holder. If the license does not say it is irrevocable, then it is revocable by default.

Third Party Creators
Third Party Creators (in this case) are individuals or companies that make their own works based on a Copyright Holder’s Open License to a Work.

So what’s happening?

OGL 1.1 is not an open license, although WotC tries to claim that it is. It’s a severely restricted set of licenses (commercial and non-commercial) that grant WotC broad rights to the Works of Third Party Creators, and requires incredibly high royalty percentages in exchange for continuing to create. Third Party Creators who agree to OGL 1.1 grant WotC the right to reprint, distribute, and otherwise exploit the Third Party Creators’ Works without any compensation, and also require the Third Party Creators to pay WotC a royalty if the Third Party Creator finds enough success with their work.

What’s followed is a huge industry discussion about what OGL 1.1 means for Third Party Creators (established and fledgling), as well as the tabletop industry as a whole. I’d like to answer a bunch of the questions that have been asked in this discussion, as well as other questions I have received while working with Third Party Creators:

Questions & Answers

All of this only serves to chill and limit the growth of the tabletop economy and community, limiting the amount of D&D content made by Third Party Creators for fans, and serving as a gatekeeping measure for the industry and hobby as a whole.

Q: I’m a Third Party Creator — should I sign OGL 1.1?
A: I cannot tell you whether to accept OGL 1.1 or not — but I can supply you with information to help make your decision. Here’s a breakdown of the important points:

  1. Any Third Party Creator that signs OGL 1.1 will be bound by the terms of OGL 1.1, as currently written and subsequently updated.
  2. Agreeing to OGL 1.1 means that you will have to 1) report what Works you (or your company) are making to WotC, 2) report revenue from your Works to WotC, if above $50,000, and 3) pay WotC a 25% royalty on revenue over a certain threshold (currently $750,000) from your Works.
  3. You will own your own content and Works, and can distribute them to certain places. However, WotC will receive a perpetual, irrevocable right to use your Works, and to allow others to use your Works, without additional payment to you. This would allow WotC to publish these Works in places you would not be allowed to, and to allow others to do the same.

Your Works are the core of your business — it would generally be a bad idea to give someone else near-unlimited access to your business.

Q: Wait, $750,000 sounds like a lot. Doesn’t this only affect a few huge companies?
A: No, not necessarily — for several reasons.

  1. While $750,000 seems like a large number, that’s based on gross revenue. Gross revenue is the total of all money generated from a Work, without taking into account any part of that total that has been or will be used for expenses. In many cases, a Third Party Creator’s actual profit will be less than 25%, because of expenses for artists, writers, marketing, etc. In addition, the Third Party Creators have to pay platform fees for distribution (approximately 7% for Kickstarter, 8% for Patreon, and 20% for Roll20). Therefore, a 25% royalty on gross revenue can actually cause a Third Party Creator to lose money — if they even try to make the Works in the first place.
  2. The $750,000 amount is the current threshold for WotC to impose a royalty. This number can be freely changed by WotC at any time, simply with an email to you. It is likely that WotC will rely on the $50,000 revenue reporting threshold to determine how much to reduce the $750,000 royalty threshold by, so that they can incrementally increase the number of Third Party Creators subject to the license.
  3. Kickstarters have no cap on revenue you can raise for your project, so if you Kickstart a successful campaign, then you may end up accidentally crossing the $750,000 threshold — and suddenly having a new expense that you did not account for in fulfillment of your project.

Q: It’s been over 20 years since the OGL was updated. Why is WotC just NOW doing this?
A: Hasbro owns WotC, and on December 8, 2022 announced to investors that although “D&D has never been more popular,” and has “really great fans and engagement,” the hobby is under-monetized (aka, Hasbro’s not making enough money from it, despite WotC’s nearly $1 billion in revenue last year). In order to increase the monetization, WotC can do two things. It can either invest in a team of writers, creatives, and creators to increase the publications and offerings WotC publishes each year, or it can take money from Third Party Creators by subjecting them to a royalty. The OGL 1.1 takes a foundational document (OGL 1.0a) that creators have relied on for two decades, and replaces it with something that WotC’s monetization of D&D at the Third Party Creator’s expense.

Q: Why not just continue using the OGL 1.0a?
A: Unfortunately, the OGL 1.1 expressly revokes the OGL 1.0a, despite what this FAQ from WotC claimed:

I do believe that there are potential legal challenges to the revocation of OGL 1.0a, especially given the length of time Third Party Creators have relied upon OGL 1.0a and the speed with which WotC has taken action to revoke it. However, these challenges would have to take place in court.

Q: So if I’m a Third Party Creator, I have to agree to the OGL 1.1 if I wanted to continue to make licensed content using Works WotC is claiming to own?
A: Correct, that’s what WotC is saying.

Q: And if I don’t, I am at risk of getting sued?
A: Yep.

Q: That sucks…
A: You’re not wrong.

Q: There has got to be something else we can do.
A: Agreed. Several Third Party Creators are building out their own Open Licenses and System Reference Documents that will be system-agnostic — aka, you can use the Works they publish there with any compatible system, whether it’s D&D 5e to Monster of the Week to the Marvel Multiverse RPG. In addition, you can support Third Party Creators by telling your fans and fellow players that we need an #OpenDnD to continue to grow this game that we love.

Q: What if I have more questions that weren’t answered here?
A: There is likely an answer somewhere! Hit me up on Twitter (@MyLawyerFriend) or dive into any Third Party Creator Discord where they’re chatting about this. Use these resources to answer any questions you have.

In Conclusion

  • The OGL 1.1 is not an Open License, and it imposes many restrictions on the use of Works WotC claims to own under relevant copyright law.
  • If you’re a Third Party Creator, the OGL 1.1 gives WotC a perpetual and irrevocable license to your Works, so that WotC can fully exploit (and allow others to exploit) without additional permission from, or payment to, you.
  • The $750,000 threshold affects more than just large Third Party Creators, and can be lowered at any time — and you can expect it to lower incrementally as WotC seeks to profit off Third Party Creator Works.

Wizards of the Coast is a cool company that publishes one of our favorite pastimes. However, they are not your friends, and if we do not find a way to #OpenDnD then it will probably diminish this incredible game we have come to love.

Disclaimer: The information in this blog post (“post”) is provided for general informational purposes only, and may not reflect the current law in your jurisdiction. No information contained in this post should be construed as legal advice from Premack Rogers PC or Noah Downs individually, nor is it intended to be a substitute for legal counsel on any subject matter. No reader of this post should act or refrain from acting on the basis of any information included in, or accessible through, this post without seeking the appropriate legal or other professional advice on the particular facts and circumstances at issue from a lawyer licensed in the recipient’s state, country or other appropriate licensing jurisdiction. This post is not intended to create an attorney-client relationship in any way. Any particular outcome is based on the facts and circumstances of each particular case and the applicable laws of your jurisdiction.

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Noah "MyLawyerFriend" Downs

Professional Service, Friendly Face | USA Atty licensed in VA | Entertainment Law/Intellectual Property Law/Gamer