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Dungeons & Dragons open game license update delayed following fan backlash



Set of pen, notebook, and dices to play role game like dungeons and dragons. Purple bag to storage the dices. in Barcelona, CT, Spain

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Dungeons & Dragons fans were ready to roll for initiative against Hasbro after the company attempted to rewrite its two-decade-old open game license in order to boost revenue.

On Friday, though, the Rhode Island-based toy maker postponed its update of its licensing terms in order to address mounting concern from the D&D community, which largely viewed the proposed changes as overreaching and unfair to third-party content creators.

Hasbro said it still intends to create a new open game license, or OGL, but that it will not include a royalty structure or give itself access to intellectual property made by third-party content creators.

CNBC obtained copies of Hasbro’s reformed licensing agreements — OGL 1.1 and an FAQ section for OGL 2.0. According to the documents, Hasbro had sought to require independent publishers and content creators to report financial data directly to the company’s Wizards of the Coast division, which includes D&D. At a certain threshold, the revised agreement would have forced independent creators to pay significant fees.

The first agreement, OGL 1.1, contained a clause that would have given Wizards access to new and original content created by third-party publishers. However, that was retracted in OGL 2.0.

D&D fans rallied around a petition called #OpenDND, signed by nearly 67,000 people, and began canceling their subscriptions to Wizard’s online toolkit, D&DBeyond, in order to protest changes to the license.

Hasbro said the two OGL documents were drafts and that the company always planned to make changes to the text. In a statement Friday, Hasbro said it still plans to revisit the OGL but that the final version will not contain a royalty structure or a license back provision.

Third-party publishers told CNBC that Hasbro representatives approached high-profile independent content creators late last year to offer them a “sweetheart deal” if they signed on before the new licensing agreement was launched to the public. A document reviewed by CNBC showed a lower royalty rate than what was included in the proposed OGL 1.1. Representatives from Hasbro did not immediately respond to CNBC’s request for comment on this point.

Leaders in the Dungeons & Dragons community greeted the news of the delay with cautious optimism.

“At first blush, it seems like we won,” said Mike Holik, editor-in-chief of Mage Hand Press. “However, until we can confirm the terms of the license, specifically as it relates to software such as [virtual table tops], it’s not clear if this is a smokescreen or a real commitment to the community and its creators.”

The attempt to create a new game license comes as Wizards of the Coast looks to capitalize on a surge in popularity of Dungeons & Dragons. The nearly 50-year-old game has had a renaissance over the last decade, the result of a combination of a new edition of its rules, which made it easier to play and more accessible to new players, and a surge in livestreamed campaigns on Twitch and YouTube. It is also a major component of Netflix’s blockbuster series “Stranger Things.”

Additionally, a rise in videoconferencing platforms, such as Zoom, Microsoft Teams and Discord, has allowed players to congregate virtually without the need for a physical meeting.

“I think D&D is approaching a very significant inflection point in its lifecycle,” said Eric Handler, MKM Partners media and entertainment analyst.

Monetizing D&D

The licensing changes come ahead of the release of “Dungeons & Dragons: Honor Among Thieves,” a movie starring Chris Pine, as well as a recent deal with Paramount+ to stream a D&D television show. Additionally, “True Blood” actor Joe Manganiello is set to direct a documentary about the game with Kyle Newman slated for release in 2024 for the game’s 50th anniversary.

“D&D has never been more popular, and we have really great fans and engagement,” Wizards of the Coast President Cynthia Williams told investors in December during a UBS virtual fireside chat. “But the brand is really under-monetized.”

Wizards, which also owns fantasy card game Magic: The Gathering, topped $1.2 billion in revenue in 2021, about 20% of Hasbro’s total net revenue for the year. Hasbro has reported that the division generated around $986 million through the first nine months of 2022. The company is expected to post fourth-quarter results next month.

A Dungeons & Dragons classic dragon hand painted by Alan Cooley, 27, of Huntington Station, New York, at Main Street Game Cafe in Huntington on November 26, 2019.

Newsday LLC | Newsday | Getty Images

Williams noted that the vast majority of purchases related to D&D comes from dungeon masters — the game organizers who create the setting and challenges players face — despite the fact that dungeon masters account for only 20% of the game’s overall user base. Much of these purchases come in the form of source books and campaign modules used to run or supplement long-running campaigns.

Wizards is hoping to use the recently acquired D&D Beyond — a digital toolset and game companion for Dungeons & Dragons’ fifth edition that Hasbro acquired last year for $146.3 million — to generate more cash. It is also planning to launch an online tabletop space for players to use for virtual gaming and is in the process of updating and expanding its game rules.

This investment in digital is a strategy Williams says will allow Wizards of the Coast to “unlock the type of recurrent spending you see in digital games.”

Chaotic neutral

The reworking of Hasbro’s OGL is not an unexpected move for the business, MKM’s Handler said.

“They aren’t doing anything that other large companies aren’t doing to protect their intellectual property,” he said.

Under its current open license, Hasbro allows third-party creators to use the game’s mechanics, its dice rolling system and framework for combat, and to develop their own settings, monsters and magical items at no cost. Companies such as Paizo, Kobold Press, Hit Point Press and The Griffon’s Saddlebag, among others, have carved out a spot in the market to sell companion books to D&D players.

These creators could not use Wizard’s intellectual property — characters, settings or plots — but could publish new material that uses the same mechanics without paying the company for the right to use it. This was a boon for these companies because they did not have to develop a new rule set and weren’t likely to enter copyright battles with Hasbro.

With its OGL update, Hasbro initially looked to charge these sellers fees if they generated too much money from their products in a calendar year.

Those that tallied more than $50,000 in revenue would need to report their profits and products, and they would have been required to obtain a creator product badge for their work. Those that topped $750,000 would have incurred a 20% fee on every dollar over that amount, according to OGL 2.0. In OGL 1.1, that fee was slated to be 25%.

“Now, what struck me as unusual in this agreement is that the numbers spoken of are revenue, meaning gross revenue, not net revenue,” said Noah Downs, a partner at Premack Rogers law firm and an intellectual property attorney. This means that content creators would have been charged the fee based on how much they generated in revenue, not their profit.

The D&D community balked at this because most of the third-party creators in the space use crowdfunding websites to drum up support for their projects and raise capital to produce them. These sites have fees — about 7% for Kickstarter, 8% for Patreon and 20% for Roll20 — that would need to be paid in addition to the licensing fee to Wizards of the Coast if the crowdfunding project topped $750,000.

“It turns every Kickstarter campaign into a coin flip,” said Holik. “If you do too well, it all collapses around you.”

Bonus action

Holik started #OpenDnD, a website to rally D&D fans and oppose Hasbro’s alteration of the open license. Downs is Holik’s attorney and also acts as a legal and media representative for the campaign.

The petition aimed to get Hasbro to completely retract its proposed new open license and educate the greater Dungeons & Dragons community about what a new OGL would mean not only for third-party publishers but for fans of the game.

Prior to Hasbro’s OGL postponement, both Downs and Holik told CNBC that by taxing third-party content creators and snatching up their intellectual property, Hasbro and Wizards would destroy the D&D community.

“It’s bizarre what Wizards is doing,” said Holik. “Either they don’t understand the market that they’re dealing with, which is kind of horrifying in its own right, or they’re intentionally trying to salt the earth and get rid of the third-party space.”

There were growing concerns that the community would fracture if publishers were forced to move away from the Dungeons & Dragons game mechanics to develop their own gaming systems.

Robert Swift of Bedford, Mass. holds out a die while serving as a dungeon master in a game of Dungeons and Dragons at the Adventure Pub in Arlington, Mass. on Saturday, Dec. 28, 2019. In an increasingly high-tech world, board games are gaining a new audience: people yearning to unplug and connect with friends.

Boston Globe

Holik also feared that a clampdown on licensing would negatively affect the type of content that is available to the D&D community, including products for the LGBTQ community and for people of color. Much of the content that is produced through these third-party publishers is often more diverse and less likely to center on a cisgender white male hero.

In 2020, Wizards of the Coast addressed some of these concerns by altering legacy definitions of certain races, including orcs and drow, which had previously been reminiscent of real-world ethnic groups and portrayed negatively within the D&D literature.

The company revamped these groups in a couple of campaigns in order to make them more morally and culturally complex peoples. Additionally, Wizards has updated older modules.

“One of the explicit design goals of 5th edition D&D is to depict humanity in all its beautiful diversity by depicting characters who represent an array of ethnicities, gender identities, sexual orientations and beliefs,” the company said at the time. “We want everyone to feel at home around the game table and to see positive reflections of themselves within our products.”

Hasbro said it still intends to create a new OGL in order to prevent D&D content from being used in “hateful and discriminatory products” and to prevent people from using D&D in blockchain games and NFTs.

“The license back language was intended to protect us and our partners from creators who incorrectly allege that we steal their work simply because of coincidental similarities,” Hasbro wrote in a statement on D&DBeyond. “As we continue to invest in the game that we love and move forward with partnerships in film, television, and digital games, that risk is simply too great to ignore.”

The company said its new OGL will contain provisions to address this risk, but it will be done without a license back clause.

“Your ideas and imagination are what makes this game special, and that belongs to you,” Hasbro wrote.

While the backtracking may quell immediate concerns about the D&D license, Holik notes that fans were so put off by the company’s actions that there is now a wedge in the relationship between Wizards and its community.

“Wizards of the Coast has disintegrated decades of trust in a matter of days, and the community will approach every one of their moves with skepticism from here on out,” he said Friday.

Additionally, he noted that the company’s attempts to change the OGL shows it does not recognize that the actual product in D&D is the story.

“And if you try and take someone’s story from them, they will fight you tooth and nail,” he said previously. “And that’s what Wizards is finding out.”

Business News

Lucid to cut 1,300 workers amid signs of flagging demand for its EVs



Lucid Motors CEO Peter Rawlinson poses at the Nasdaq MarketSite as Lucid Motors (Nasdaq: LCID) begins trading on the Nasdaq stock exchange after completing its business combination with Churchill Capital Corp IV in New York City, New York, July 26, 2021.

Andrew Kelly | Reuters

Struggling EV maker Lucid said in a regulatory filing on Tuesday that it plans to cut about 18% of its workforce, or roughly 1,300 employees, as part of a larger restructuring to reduce costs as it works to ramp up production of its Air luxury sedan.

Lucid said it will incur one-time charges totaling between $24 million and $30 million related to the job cuts, with most of that amount being recognized in the first quarter of 2023.

News of the job cuts was first reported by Insider earlier on Tuesday. Lucid’s shares closed down over 7% on Tuesday following the Insider report.

In a letter to employees, CEO Peter Rawlinson said the job cuts will hit “nearly every organization and level, including executives,” and that affected employees will be notified over the next three days. Severance packages will include continued healthcare coverage paid by Lucid, as well as an acceleration of equity vesting, Rawlinson wrote.

Lucid ended 2022 with about $4.4 billion in cash on hand, enough to last until the first quarter of 2024, CFO Sherry House told CNBC last month ahead of the company’s fourth-quarter earnings report. But there have been signs that demand for the high-priced Air has fallen short of Lucid’s internal expectations, and the company may be struggling to convert early reservations to sold orders.

Lucid said that it had more than 28,000 reservations for the Air as of Feb. 21, its most recent update. But it also said that it plans to build just 10,000 to 14,000 vehicles in 2023, far fewer than the roughly 27,000 that Wall Street analysts had expected.

With Lucid’s factory currently set up to build about 34,000 vehicles per year, the company has warned of continuing losses.

“As we produce vehicles at low volumes on production lines designed for higher volumes, we have and we will continue to experience negative gross profit related to labor and overhead costs,” House said during Lucid’s earnings call on Feb. 22.

Lucid hasn’t yet announced a date for its first-quarter earnings report.

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Virgin Orbit extends unpaid pause as Brown deal collapses, ‘dynamic’ talks continue



NEWQUAY, ENGLAND – JANUARY 09: A general view of Cosmic Girl, a Boeing 747-400 aircraft carrying the LauncherOne rocket under its left wing, as final preparations are made at Cornwall Airport Newquay on January 9, 2023 in Newquay, United Kingdom. Virgin Orbit launches its LauncherOne rocket from the spaceport in Cornwall, marking the first ever orbital launch from the UK. The mission has been named Start Me Up after the Rolling Stones hit. (Photo by Matthew Horwood/Getty Images)

Matthew Horwood | Getty Images News | Getty Images

Virgin Orbit is again extending its unpaid pause in operations to continue pursuing a lifeline investment, CEO Dan Hart told employees in a company-wide email.

Some of the company’s late-stage deal talks, including with private investor Matthew Brown, collapsed over the weekend, people familiar with the matter told CNBC.

Hart previously planned to update employees on the company’s operational status at an all-hands meeting at 4:30 p.m. ET on Monday afternoon, according to an email sent to employees Sunday night. At the last minute, that meeting was rescheduled “for no later than Thursday,” Hart said in the employee memo Monday.

“Our investment discussions have been very dynamic over the past few days, they are ongoing, and not yet at a stage where we can provide a fulsome update,” Hart wrote in the email to employees, which was viewed by CNBC.

Brown told CNBC’s “Worldwide Exchange” last week he was in final discussions to invest in the company. A person familiar with the terms told CNBC the investment would have amounted to $200 million and granted Brown a controlling stake. But discussions between Virgin Orbit and the Texas-based investor stalled and broke down late last week, a person familiar told CNBC. As of Saturday those discussions had ended, the person said.

Separately, another person said talks with a different potential buyer broke down on Sunday night.

The people asked to remain anonymous to discuss private negotiations. A representative for Virgin Orbit declined to comment.

Hart promised Virgin Orbit’s over 750 employees “daily” updates this week. Most of the staff remain on an unpaid furlough that Hart announced on Mar. 15. Last week, a “small” team of Virgin Orbit employees returned to work in what Hart described as the “first step” in an “incremental resumption of operations,” with the intention of preparing a rocket for the company’s next launch.

Virgin Orbit’s stock closed at 54 cents a share on Monday, having fallen below $1 a share after the company’s pause in operations.

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Virgin Orbit developed a system that uses a modified 747 jet to send satellites into space by dropping a rocket from under the aircraft’s wing mid-flight. But the company’s last mission suffered a mid-flight failure, with an issue during the launch causing the rocket to not reach orbit and crash into the ocean.

The company has been looking for new funds for several months, with majority owner Sir Richard Branson unwilling to fund the company further.

Virgin Orbit was spun out of Branson’s Virgin Galactic in 2017 and counts the billionaire as its largest stakeholder, with 75% ownership. Mubadala, the Emirati sovereign wealth fund, holds the second-largest stake in Virgin Orbit, at 18%.

The company hired bankruptcy firms to draw up contingency plans in the event it is unable to find a buyer or investor. Branson has first priority over Virgin Orbit’s assets, as the company raised $60 million in debt from the investment arm of Virgin Group.

On the same day that Hart told employees that Virgin Orbit was pausing operations, its board of directors approved a “golden parachute” severance plan for top executives, in case they are terminated “following a change in control” of the company.

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Historic UAW election picks reform leader who vows more aggressive approach to auto negotiations



Supporters wave signs during an address at the Time Warner Cable Arena in Charlotte, North Carolina, on September 5, 2012 on the second day of the Democratic National Convention (DNC).

Mladin Antonov | AFP | Getty Images

DETROIT – United Auto Workers members have ousted their president in the union’s first direct election, ushering in a new era for the prominent organized labor group ahead of negotiations later this year with the Detroit automakers.

The union’s new leader will be Shawn Fain, a member of the “UAW Members United” reform group and local leader for a Stellantis parts plant in Indiana. He came out ahead in a runoff election by hundreds of votes over incumbent Ray Curry, who was appointed president by union leaders in 2021.

Fain, in a statement Saturday, thanked UAW members who voted in the election. He also hailed the election results as a historic change in direction for the embattled union, which he says will take a “more aggressive approach” with its employers.

“This election was not just a race between two candidates, it was a referendum on the direction of the UAW. For too long, the UAW has been controlled by leadership with a top-down, company union philosophy who have been unwilling to confront management, and as a result, we’ve seen nothing but concessions, corruption, and plant closures,” Fain said.

Curry, who previously protested the narrow election results, said in a statement that Fain will be sworn in on Sunday and that Curry is “committed to ensuring that this transition is smooth and without disruptions.”

“I want to express my deep gratitude to all UAW staff, clerical support, leaders and most of all, our union’s active and retired members for the many years of support and solidarity. It has been the honor of my life to serve our great union,” Curry said.

More than 141,500 ballots were cast in the runoff election that also included two other board positions, a 33% increase from last year’s direct election in which neither of the presidential candidates received 50% or more of the votes.

The election was overseen by a federal monitor, who did not immediately confirm the results. The election results had been delayed several weeks due to a run-off election as well as the close final count.

Shawn Fain, candidate for UAW president, is in a run-off election with incumbent Ray Curry for the union’s highest-ranking position.

Jim West for UAW Members United

Fain’s election adds to the UAW’s largest upheaval in leadership in decades, as a majority of the union’ s International Executive Board will be made up of first-time directors who are not part of the “Administration Caucus” that has controlled the union for more than 70 years.

Fain and other members of his leadership slate ran on the promise of “No corruption. No concessions. No tiers.” The last being a reference to a tiered pay system implemented by the automakers during recent negotiations that members have asked to be removed.

The shuffle follows a yearslong federal investigation that uncovered systemic corruption involving bribery, embezzlement, and other crimes among the top ranks of the UAW.

Thirteen UAW officials were convicted as part of the probe, including two past presidents. As part of a settlement with the union in late 2020, a federal monitor was appointed to oversee the union and the organization held a direct election where each member has a vote, doing away with a weighted delegate process.

For investors, UAW negotiations with the Detroit automakers are typically a short-term headwind every four years that result in higher costs. But this year’s negotiations are anticipated to be among the most contentious and important in recent memory.

Fain has said the union will seek benefit gains for members, advocating for the return of a cost-of-living adjustment, or COLA, as well as raises and job security.

The change in the UAW comes against the backdrop of a broader organized labor movement across the country, a pro-union president and an industry in the transition to all-electric vehicles.

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