In 1981, IBM introduced a revolutionary computer that radically transformed the tech industry, the IBM-PC.
What made the IBM PC revolutionary was its open-system architecture and the royalty-free nature of its use.
Specifically, anyone could create an IBM clone, and anyone could develop software for said IBM clone and make money without paying a dime to IBM.
IBM hated that. So their solution was in 1987 to create the Microchannel PS/2. The intent was to create a new divergent market of PC’s that no one could make clones of.
What happened was that the market split between PS/2 and EISA, and the PS/2 became a failed computer system and a historical artifact and a warning to those who would want to close an open platform.
In June 2008, Apple introduced the App Store. The Apple App Store was the first massive commercial success of a cell phone app store. And it created a standard for how to take royalties from creators. And it was a huge success. So much so that we have had lawsuits that are still going through the court systems to determine the boundaries and limits of the market rules Apple can enforce in the market they created.
In June 2010, Facebook saw the success of the Apple Store and decided they wanted a piece of the Zynga action. Facebook had created an Open Platform, and that Open Platform enabled Zynga to grow like wildfire. But Facebook wasn’t making any money from Zynga. And so, there was a stand-off between Zynga and Facebook. Zynga and Facebook signed a deal that required Zynga to hand over 30% of its revenue to Facebook. That 30% revenue haircut killed Zynga.
Facebook’s thesis was that by creating a new currency, Facebook Credits, that Zynga customers would use, they would increase the total number of people who had digital money, and thus more money would be spent. The thesis failed, and Zynga suffered.
In both Apple and Facebook’s cases, they saw intellectual property creators who used their platforms as free-loaders. In Apple’s case, the tax was declared up-front, so you knew what you were getting into. In Facebook, it was an after-the-fact revision that destroyed a business.
But what happened to said intellectual property creators? As my son recently said – “why does mobile gaming suck?”
Gaming is a hit-driven business. One hit makes all the money, allowing you to make the next game. 30% is a massive tax, restricting the money you have to make further investments. And so the gaming industry has moved back to open platforms, ironically, the Windows PC.
This now brings us to the recent decision by Hasbro to introduce OGL 1.1. A lawyer covered it well here – https://medium.com/@MyLawyerFriend/lets-take-a-minute-to-talk-about-d-d-s-open-gaming-license-ogl-581312d48e2f
If you parse the Lawyer’s responses, it boils down to trying to create an Apple-like App Store for D&D content. Essentially, you hand over your financials and content for a smaller slice of the pie for the right to play.
In effect, it destroys the open ecosystem that D&D had. For example, suppose I have a website with a random generator of D&D content. That random generator is illegal.
Now Hasbro is betting that people play D&D and don’t care about the open content and that the creators will have to suck it up and deal.
Except, and this is a big exception, that isn’t true.
The iPhone was a singular technology with no ability to be replaced. Folks used Facebook because they wanted to connect with friends. Those platforms had value outside of the gaming industry. D&D is a game and a platform.
But it’s an extraordinary game where the player and the GM create content while playing. And the GM can adapt content from other gaming systems to their game. And the GM can adapt rules to their game.
In short, I expect the TTRPG community to discover the power of system-neutral gaming. And that the internet will increase with systems that allow you to convert to the gaming system of your choice. Except for the new restricted one.
My take, and it’s hopeful, is that D&D will continue, but tabletop role-playing will finally escape the long shadow of its creator and his original game.
But going back to software architecture and platforms, it’s always tempting to control a market, and there is a lot of value in doing that. But when you extract a lot of money from a market, you eventually kill the market. And over time, those creators whose businesses are hits will move to open platforms.
Enjoyed this write-up having lived through some of this with you. The question of “why does mobile gaming suck?” is a good one and Justin Waldron gave me one of the best articulations of a similar thesis to yours above.
I do think that there is merit in including the gaming consoles in the conversation since they also charge a 30% digital tax (or a fee for each physical disk). I don’t think anyone would argue that console games generally suck but you certainly could say that being successful on consoles is very hard (eg. either big AAA budgets or small scrappy indies). Unlike Apple products console hardware margins are thin.
I am very interested in seeing how Apple rolls out alternative app stores in Europe. I am sure they will take the scary warning messages that Android gives to a whole new level and it will not be user friendly, but curious to see if it helps make mobile gaming suck less over time.
I grew up on the original staple booklet D&D (yes, I am that old) so am saddened by the new update to the OGL. I understand that Hasbro wants to tax the ecosystem on some level since it is IP that they created and built up over time.
However, per your write-up, closed ecosystems often fail over time and personally I think an IP license rate (5-10% of net revenues vs. 25% of gross as a “platform” tax) is more appropriate in this instance. Yes, a 5-10% net revenue royalty will make most corporate lawyers and finance teams throw up, but it would be much more palatable to creators who have long relied on 1.0. Moreover, draconian IP ownership of the creator driven stories will absolutely drive them to other platforms.
Turns out the market freed us!