“Interview With Ryan Dancey: D20 System and Open Gaming Movement”, 2000-03-09 (; backlinks):
Q. Can you briefly summarize what the Open Gaming Movement is about? Where did it come from, and what does it mean to the average gamer?
A. Sure. Prepare yourself for a big gulp of business theory…That brings us to Open Gaming, and why we’re pursuing this initiative inside Wizards and outside to the larger community of game publishers.
Here’s the logic in a nutshell. We’ve got a theory that says that D&D is the most popular role playing game because it is the game more people know how to play than any other game. (For those of you interested researching the theory, this concept is called “The Theory of Network Externalities”). Note: This is a very painful concept for a lot of people to embrace, including a lot of our own staff, and including myself for many years. The idea that D&D is somehow “better” than the competition is a powerful and entrenched concept. The idea that D&D can be “beaten” by a game that is “better” than D&D is at the heart of every business plan from every company that goes into marketplace battle with the D&D game. If you accept the Theory of Network Externalities, you have to admit that the battle is lost before it begins, because the value doesn’t reside in the game itself, but in the network of people who know how to play it.
If you accept (as I have finally come to do) that the theory is valid, then the logical conclusion is that the larger the number of people who play D&D, the harder it is for competitive games to succeed, and the longer people will stay active gamers, and the more value the network of D&D players will have to Wizards of the Coast. In fact, we believe that there may be a secondary market force we jokingly call “The Skaff Effect”, after our own Skaff Elias. Skaff is one of the smartest guys in the company, and after looking at lots of trends and thinking about our business over a long period of time, he enunciated his theory thusly:
All marketing and sales activity in a hobby gaming genre eventually contributes to the overall success of the market share leader in that genre.
In other words, the more money other companies spend on their games, the more D&D sales are eventually made. Now, there are clearly issues of efficiency—not every dollar input to the market results in a dollar output in D&D sales; and there is a substantial time lag between input and output; and a certain amount of people are diverted from D&D to other games never to return. However, we believe very strongly that the net effect of the competition in the RPG genre is positive for D&D. The downside here is that I believe that one of the reasons that the RPG as a category has declined so much from the early 1990s relates to the proliferation of systems. Every one of those different game systems creates a “bubble” of market inefficiency; the cumulative effect of all those bubbles has proven to be a massive downsizing of the marketplace. I have to note, highlight, and reiterate: The problem is not competitive product, the problem is competitive systems. I am very much for competition and for a lot of interesting and cool products.
So much for the dry theory and background. Here’s the logical conclusions we’ve drawn: We make more revenue and more profit from our core rulebooks than any other part of our product lines. In a sense, every other RPG product we sell other than the core rulebooks is a giant, self-financing marketing program to drive sales of those core books. At an extreme view, you could say that the core book of D&D—the PHB [Player’s Handbook rulebook]—is the focus of all this activity, and in fact, the PHB is the #1 best selling, and most profitable RPG product Wizards of the Coast makes year in and year out.
The logical conclusion says that reducing the “cost” to other people to publishing and supporting the core D&D game to zero should eventually drive support for all other game systems to the lowest level possible in the market, create customer resistance to the introduction of new systems, and the result of all that “support” redirected to the D&D game will be to steadily increase the number of people who play D&D, thus driving sales of the core books. This is a feedback cycle—the more effective the support is, the more people play D&D. The more people play D&D, the more effective the support is.
The other great effect of Open Gaming should be a rapid, constant improvement in the quality of the rules. With lots of people able to work on them in public, problems with math, with ease of use, of differences from standard forms, etc. should all be improved over time. The great thing about Open Gaming is that it is interactive—someone figures out a way to make something work better, and everyone who uses that part of the rules is free to incorporate it into their products. Including us. So D&D as a game should benefit from the shared development of all the people who work on the Open Gaming derivative of D&D.
After reviewing all the factors, I think there’s a very, very strong business case that can be made for the idea of embracing the ideas at the heart of the Open Source movement and finding a place for them in gaming.