Dungeons and dragons (D&D) is a hugely popular tabletop role-playing game. Although the game has been around since the 1970s, it has recently become extremely popular thanks to podcasts, TV shows, video games and films, making the game more mainstream. Every year, the intellectual property alone generates millions in revenue for parent company Hasbro (for convenience, I’ll call the company D&D, even though Wizards of the Coast is the publisher and Hasbro is the parent company. will sometimes attribute decisions to D&D, even if they are made by Hasbro are taken).
Originally, D&D published physical rulebooks and sourcebooks to aid players and establish the rules of the game. There were also modules that players could purchase: pre-made stories to introduce new players to the system or challenge experienced players. Players also often “homebrew” content: they create their own stories, magic items, and so on. Using a physical character sheet, players could track their character’s progress, skills, inventory, spells, etc.
Some character classes can be very complicated to track by hand, especially spellcasters (wizards, warlocks, wizards, bards, and clerics). Players must roll dice, add numbers, calculate probabilities and determine the results of actions. I like to call D&D “Homework: The Game” because of how complicated it can get. To help players manage increasingly complex characters, online game streaming company Twitch created a website called D&D Beyond, which automated much of the process. Players could simply purchase the D&D rulebooks from the website, set up their characters, and the website would track and roll everything for them. In 2022, D&D acquired D&D Beyond as part of a quest to bring all content under one roof (theirs) and capitalize on the move to digital gaming that had accelerated during the COVID-19 pandemic.
On paper, it looked like D&D was becoming a monopoly. By owning a popular IP, the company was able to control major aspects of the tabletop gaming world. Most homebrew content creation under the company’s Open Game License allowed players to use large amounts of D&D content for their own use, and even for limited commercial use, without having to pay royalties. This agreement had been in place since 2000 and players took it for granted.
However, in August 2022, D&D announced that they would be moving toward a new content deal with players called One D&D. Players initially feared that the new One D&D would limit their freedom to create without paying royalties to D&D. Although the company initially denied it, players’ fears were confirmed as more details emerged. The fanbase revolted by canceling subscriptions to D&D Beyond and seeking out (or developing) new tabletop games. In January 2023, D&D pulled out and even placed much of its content under an irrevocable Creative Commons license. D&D tried to flex their monopoly muscles and failed.
More recently, D&D tried to flex their monopoly muscles again. After announcing a new edition of the rulebook, they announced on August 22, 2024 that anything related to the previous rulebook would not function in D&D Beyond (or other digital content) unless players homebrewed the material or the new rulebook bought. In other words, D&D tried to take away content that people had already purchased and force them to buy new content. Once again the fanbase revolted. Less than a week later, on August 26, D&D announced that they “heard fan feedback loud and clear” and subsequently canceled the planned change to D&D. Players can use content previously purchased on the digital platforms.
There’s an important lesson here, one that late mentor and friend Steve Horwitz repeated constantly: “monopoly” is not the same as “big.”
Companies can be large and even own a lot of IP and content, but they are not necessarily monopolies with the ability to set market prices. Their monopoly power will depend heavily on the availability of substitutes for their product. If there are many substitutes, the company, regardless of their size, can behave like a competitive company.
Confusing size with monopoly power is a multi-directional error. Companies often overestimate their monopoly power and, as is the case in D&D, are forced to retreat. Likewise, antitrust regulators often overestimate the monopoly power of companies, ultimately making efficient markets inefficient. Metrics such as company size, market share, profit, or profit margin do not accurately describe a company’s monopoly power. Sometimes we might not know how little (or much) monopoly power the company has until they do something stupid like D&D.
PS This is a photo of my D&D group. My character, Vargen, is second from the right.