Dungeons, Dragons, and Monopolies – Econlib

Dungeons & Dragons (D&D) is a massively well-liked tabletop position enjoying sport.  Whereas the sport has been round for the reason that Nineteen Seventies, it has just lately exploded in reputation with podcasts, TV exhibits, video video games, and flicks making the sport extra mainstream.  Every year, the mental property alone generates tens of millions in income for guardian firm Hasbro (for the sake of ease, I shall be referring to the company as D&D, despite the fact that Wizards of the Coast is the writer and Hasbro is the guardian.  Thus, I’ll generally attribute choices to D&D even when they have been made by Hasbro).  

Initially, D&D printed bodily rulebooks and sourcebooks to assist information gamers and set up the principles of the sport.  There have been additionally modules gamers might purchase: pre-made tales to ease new gamers into the system or problem skilled gamers.  Gamers usually “homebrew” content material as properly: they create their very own tales, magic objects, and so forth.  Utilizing a bodily character sheet, gamers would observe their character’s progress, skills, stock, spells, and so forth.

Some character courses can get very sophisticated to trace by hand, particularly spellcasters (wizards, warlocks, sorcerers, bards, and clerics).  Gamers have to roll die, add numbers, calculate chances on the fly, and decide outcomes of actions. I wish to name D&D “Homework: The Sport” due to how sophisticated it might get.  To assist gamers handle more and more complicated characters, the web sport streaming firm Twitch created a web site referred to as D&D Past which automated numerous the method.  Gamers might merely purchase the D&D rulebooks on the web site, arrange their characters, and the web site would observe and roll every thing for them.  In 2022, D&D acquired D&D Past as a part of a quest to convey all content material underneath one roof (theirs) and capitalize on the transfer to digital gaming that had accelerated throughout the COVID-19 pandemic lockdowns.  

On paper, it regarded like D&D was turning into a monopoly.  By proudly owning a preferred IP, the agency might management giant features of the tabletop gaming world.  Most homebrew content material creation underneath the corporate’s Open Sport License allowed for gamers to make use of giant swaths of D&D content material for their very own makes use of, and even restricted business makes use of, with no need to pay royalties.  This settlement had been round since 2000 and gamers handled it as a matter after all.

Nonetheless, in August 2022, D&D introduced they might be shifting towards a brand new content material settlement with gamers referred to as One D&D.  Gamers initially feared the brand new One D&D would restrict their freedom to create with out paying royalties to D&D.  Whereas initially denied by the corporate, as extra particulars emerged, participant fears have been confirmed.  The fanbase revolted by canceling subscriptions to D&D Past and seeking out (or growing) new tabletop video games.  By January 2023, D&D backed off, even placing a lot content material underneath an irrevocable Artistic Commons license.  D&D tried to flex their monopoly muscular tissues and failed.

Extra just lately, D&D tried to flex their monopoly muscular tissues once more.  Following an announcement of a brand new version of the rulebook, they introduced on August 22, 2024 that something tied to the earlier rulebook wouldn’t perform in D&D Past (or different digital content material) except gamers homebrewed the fabric or purchased the brand new rulebook.  In different phrases, D&D was making an attempt to remove content material individuals had already purchased and pressure them to purchase new content material.  Once more, the fanbase revolted.  Not one week later, on August 26, D&D introduced they “heard fan suggestions loud and clear” and have been canceling the deliberate change to D&D past.  Gamers will be capable to use content material beforehand bought on the digital platforms.

There’s an essential lesson right here, one which the late mentor and buddy Steve Horwitz used to repeat on a regular basis: “monopoly” doesn’t equal “large.” 

Firms could also be large, they usually might even personal a number of IP and content material, however they don’t seem to be essentially monopolies with the flexibility to set market costs.  Any monopoly energy they’ve will closely depend upon the supply of substitutes for his or her product.  If there are a lot of substitutes, the agency, no matter their measurement, might act very similar to a aggressive agency.  

Mistaking measurement for monopoly energy is an error that runs in a number of instructions.  Companies usually overestimate their monopoly energy and, because the case with D&D, are compelled to again down.  Likewise, antitrust regulators usually overestimate the monopoly energy of companies and find yourself turning environment friendly markets inefficient.  Metrics like agency measurement, market share, revenue, or revenue margin don’t precisely describe the monopoly energy of a agency.  Typically, we might not understand how little (or a lot) monopoly energy the corporate has till they do one thing boneheaded like D&D.

P.S. This can be a image of my D&D group.  My character, Vargen, is second from the suitable.