Hasbro admitted during an earnings call that its attempt to update the Open Game License that provides a framework for third-party publishers to make Dungeons & Dragons compatible material was a “misfire.” Today, CEO Chris Cocks provided a rocky outlook on Hasbro’s current and future earnings during a quarterly earnings call, with Hasbro reporting a 9% decrease in revenue in 2022 and estimating an additional drop in revenue in 2023 due to recession concerns. During the call, Cocks also addressed the self-inflicted controversy involving the Open Game License, which caused a mass revolt by D&D fans earlier this year. “On D&D, we misfired on updating our Open Game License, a key vehicle for creators to share or commercialize their D&D inspired content,” Cocks said in prepared remarks. “Our best practice is to work collaboratively with our community, gather feedback, and build experiences that inspire players and creators alike – it’s how we make our games among the best in the industry. We have since course corrected and are delivering a strong outcome for the community and game.”
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In early 2023, fans learned that Hasbro planned to “update” the OGL by de-authorizing the current version and instituting a much stricter license with a royalty fee structure and several other onerous causes. While Wizards initially defended leaked versions of the new OGL as a draft, the company later reversed course due to pressure from both fans and publishers who used the OGL to make D&D compatible material and announced that the D&D System Reference Document (which contains the base mechanics for D&D’s current Fifth Edition) would be published under a Creative Commons license, greatly opening up who and how the mechanics could be used.
Later in the phone call, Cocks said that a coordinated effort to cancel D&D Beyond subscriptions in response to the attempted OGL revision wouldn’t have a substantial impact on either the D&D P&L (profit and loss statement, for those uninitiated with the world of corporate financial statements) or Wizards’ overall P&L targets. “We had some subscription cancellations, but they were relatively minor in the totality of the D&D P&L and the Wizards P&L,” Cocks said. We take anything like that seriously. We are in touch with the people who cancelled and in general they are open to restarting their subscriptions. D&D Beyond is a great platform.” Cocks also noted that D&D Beyond was already generating profit for Hasbro and that its user base and website revenue had increased 20% in 2022. Cocks also pointed to the upcoming Dungeons & Dragons: Honor Among Thieves movie and the release of Baldur’s Gate 3 as potential revenue movers for D&D in 2023.
Cocks did note that Hasbro and in particular the Wizards of the Coast division that drives Hasbro’s profits was listening to feedback about its products. Cocks also said that Wizards was “too aggressive” on some of its pricing assumptions about Magic: The Gathering, particularly the controversial 30th Anniversary Edition, and that it had scaled back available supply as a result, which impacted Q4 sales. Cocks also said that 2023’s release schedule for Magic: The Gathering would not be as “compressed” as it was in 2022. Fans have complained about the seemingly endless cycle of new releases of Magic: The Gathering, which Cocks blamed on supply chain issues that caused an uneven release slate.
