Post-Monopoly Competition: How Network Externalities Shape Secondary Innovation In Two Dominant Fantasy Markets

1. The Phenagogic Lock-In

   World of Warcraft (1–14 M peak subs, 2004–25) and Dungeons & Dragons (est. >50 M players, 1974–25) are not merely dominant products; they are dominant *genres* inside their respective vectors—computer-mediated virtual worlds and analog tabletop fantasy. Once a leisure category becomes verbified— “to WoW” or “to D&D”—brand equity freezes into a semiotic monopoly. Substitution elasticities drop; marketing costs for incumbents plummet; user-acquisition feedback loops harden. In the technical literature this is sometimes labeled “genrefication lock-in.”

2. Competitive Threats Migrate Inside the Embassy, Not Outside the Wall

   Because Normies default to the eponym (“just play D&D”), schismatic demand cannot migrate to a *new brand* without incurring prohibitive translation costs for friends, memes, and toolchains. Hence:

   • Digital: Classical IP forbiddance law (DMCA, EULA) reduces external entry, so innovation expresses in “pirate verticalization”: private WoW servers offering progressive-era rulesets (Nostalrius, Turtle WoW) or anti-casual designs (Hardcore realms). Network effects still depend on the Blizzard client; competition occurs only within the emission radius of the mothership.
   • Analog: D&D lock-in is softer because rules text is not hidden in compiled code. Consequently, derivative systems and “forked rulesets” (Pathfinder, Palladium Fantasy, OSRIC, Lamentations) behave like open-source distros—they preserve common syntax (R20, VTT libraries, fantasy tropes) yet re-inscribe power-level curves, moral economies, and aesthetic metaphysics that Wizards of the Coast either sidestepped or deprecated.
3. Two Potential Universes of Exit

   Economists distinguish “horizontal” vs. “vertical” product differentiation. Post-lock-in RPG markets invert the map. Horizontal options (new RPG systems) lose traction; vertical layers inside the same protocol (old editions, rule mods, pirate servers) gain traction because the social subgraph is transportable with minimal friction. The exit path stays within the walled garden; it just repaints the walls.

4. Policy and Cultural Implications
   • Regulatory tolerance for non-commercial server code permits *ex post* pluralism without breaking IP monopolies—an accidental innovation commons.
   • Analog editions and “retro-clone” licenses force dominant publishers to maintain *official* legacy support (e.g., D&D “OneD&D” backward-compatibility layers). Ironically, the more aggressively a monopolist suppresses exterior forks, the larger the vacuum fixed by “underground editions,” reinforcing the very brand sovereignty it hoped to dilute.