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General Forge Forums => Publishing => Topic started by: xiombarg on April 28, 2004, 12:28:17 PM

Title: the "supplement treadmill"
Post by: xiombarg on April 28, 2004, 12:28:17 PM
Malcolm (eyebeams), as a freelancer for White Wolf (he can correct me if that's an incorrect way to refer to him in this context), made and interesting comment on another thread (http://www.indie-rpgs.com/viewtopic.php?p=116843)...

QuoteVampire's sales never really declined past what's expected for the general annual shrinking of the industry, but it became more and more difficult to write revelant Vampire material. This is not just a metaplot problem. It also had to do with the setting. I once sent a proposal for Mage book that had to do with a secondary element of the setting. It was refused because it was too obscure. When I mentioned a similar book for Vampire the developer noted that Vampire was at the stage where it *had* to mine that secondary material. When a game's come to that, it's time to pull the tirgger, or else you end up with bloodline books and similar cruft.
To me, this is a shining example of what's wrong with the "supplement treadmill" that the distribution system imposes on the market. The need to produce monthly supplements is so high that one can "mine out" a popular game and be forced to "pull the trigger" on it. Contrast this to games sold mainly through direct sales, which rarely have this problem, even if they are reasonably popular...
Title: Re: the "supplement treadmill"
Post by: Pramas on April 28, 2004, 01:44:51 PM
Quote from: xiombargTo me, this is a shining example of what's wrong with the "supplement treadmill" that the distribution system imposes on the market. The need to produce monthly supplements is so high that one can "mine out" a popular game and be forced to "pull the trigger" on it. Contrast this to games sold mainly through direct sales, which rarely have this problem, even if they are reasonably popular...

Yeah, I still have bruises from when the distributor enforcers came to my office and imposed their way of thinking into my head!

More seriously, you are talking about two very different models of RPG publishing. Companies that do this as a full time business have very different needs than those that sell POD books off websites. When you have employees who count on you for their paychecks every month, you need to make sure you generate revenue. Having new releases every month is a good way to do that, as the new books both make money and stimulate backlist sales. Do some companies take this too far or implement the strategy poorly? Of course they do but that doesn't mean it can't be done successfully. The small publisher who does this as a hobby is operating under a completely different paradigm. "Reasonably popular" means what, core books sales of 500 or even less? Comparing those games to Vampire is pointless.
Title: the "supplement treadmill"
Post by: Ron Edwards on April 28, 2004, 02:05:52 PM
Hello,

I think the issue of "must take care of employees" is a red herring. No one has a responsibility to carry employees; they are fireable.

The real issue,  in my view, is a matter of who is the customer.

If the distributor + retailer network is the customer, then the publisher is in the unpleasant position of "proving" his or her worth to the customer by putting out new product. That's because retailers generally are very poor at assessing what games actually sell to customers in their stores, and must rely on gut, rumor, and the appearance of new product in order to decide what to order next time.

If, on the other hand, the person who is enjoying reading and playing the game is the customer, then the publisher views the distributor + retailer network.

Chris, you wrote,

QuoteYeah, I still have bruises from when the distributor enforcers came to my office and imposed their way of thinking into my head!

I know you wrote this humorously, but it also demonstrates the self-blinding distraction I see all the time among people in the so-called "industry." Effectively, the distributors have (at certain points) exerted exactly this kind of control over publishers, for example, when they pushed for and received full voting membership status in GAMA. To claim that the subsequent, extreme reduction in the number of new core books over the next five years, and the explosive increase in supplements-per-line is a coincidence, would be very naive, as I see it.

Best,
Ron
Title: the "supplement treadmill"
Post by: Matt Snyder on April 28, 2004, 02:09:22 PM
Chris,

First, disclosure: I AM one of those goons selling PDF and (sorta) Print on Demand products. I have made a very meager profit. I also have a full-time, salaried job, benefits, mortgage, yadda yadda. So, no overhead for my "company," and I view it mainly as a hobby. But, I'm not losing money on said hobby, either.

Second, my response: My "hobby" status aside, I do work for a large media company. The business is advertising driven, primarily, though we do have direct sales and other large revenue generators. But, overall, we can see two themes in my day job: production of content and marketing. Every day -- especially lately -- I hear about "revenue." I'm a content guy, but I'm becoming a marketing guy every day, whether I like it or not. That's because I'm charged with figuring out ways to increase revenue. (I sure as heck would not want to entrust my company's viability on the content creators. We'd go broke overnight, we poor bastards.)

You're right to bring revenue up. It's what makes the company able to pay me, and all my co-workers. I suspect you're also right to say that companies can make the "supplement treadmill" work.

However, I view this as the exception to the rule. This assumes that content creation is, by and large, the way companies should make money. Create stuff 'til the wheels come off. Revenue or bust!

Now, I know who you are, and I know you're a pretty savvy guy. I therefore assume that you do NOT think that simply churning out product is the real way to generate revenue. It is merely one way. And, it's probably a very time-intensive, largely inefficient way.

Another CRUCIAL way to make money is marketing. Understanding your audience. Finding and reaching new audiences. You could do all of this, creating NEW revenue, with a handful of tidy, well-done game books and supplements. It appears as though too few companies make this happen. No one's using marketing to create any substantial portion of their revenue. No one's really doint anything at all except pushing books out the door and reaching the same, aging demographic of geeks.

It may not be the companys' fault. Maybe the market is too finite and small. I just don't that for certain either way.

However, I'm not seeing sophiticated marketing -- on par with serious publishers or media / content companies -- at any level, even WotC (who generally does the best job). What I am seeing is most (certainly not all) companies guided largely by content producers (i.e. writers, designers, geeks, etc.) who do what they know -- make stuff! Great fun for them and other geeks. And yet, they aren't making REVENUE grow by any reasonable business standard. It's a shame, and I argue a huge reason why our hobby/industry remains so tiny and troubled.

P.S. You said comparing hobby publishers to Vampire is pointless. I agree, pretty much. However, comparing Vampire to, oh, say, Random House is not exactly pointless. Too often, our industry is looking around and seeing themselves as big fish ... in a mud puddle. Where's the pond? Where's the ocean?
Title: the "supplement treadmill"
Post by: xiombarg on April 28, 2004, 03:32:23 PM
I think your points are particularly salient, Matt.

I had an argument with GMS back on the Gaming Outpost when he talked about how gamers "sucked", because the gaming market tended to favor things with a fantasy element over more "pure" content, i.e. Shadowrun vs. Cyberpunk 2020.

My response to this was: Stop writing for the old market, then. Build yourself a new one. Just because the current demographic doesn't like certain things, that doesn't mean that those people "suck", it means you need to get off your butt and try to appeal to a new market.

So, as you say, the other way to make money outside the treadmill is marketing. White Wolf's marketing department (for example) is well-known in our industry, but, as you imply, it's mainly good at selling product to it's current fan-base, tho it has expanded into other connected fan-bases with stuff like Exalted and the d20 stuff -- but even then, we're largely talking game geeks, not new gamers.

Building for a new market is, of course, hard, when we're used to the creative thing. But as the current niche is increasingly "mined out", the bigger game companies may have no other choice.

The question is: Where to start? This is why it's so hard. I mean, when I was shopping around a "intro to RPGs" text for Unsung, some people complained that I was showing it to gamers and not non-gamers. But I wasn't sure where to go to find receptive non-gamers. I don't want to go spamming other fora...
Title: the "supplement treadmill"
Post by: FFG Greg on April 28, 2004, 04:03:14 PM
Quote from: Ron EdwardsHello,

I think the issue of "must take care of employees" is a red herring. No one has a responsibility to carry employees; they are fireable.

If your goal is to grow your business past the hobby level (i.e., your goal is actually a business, rather than a hobby), you're eventually going to need employees. It is, no doubt, a "red herring" if we're talking about a creator/hobbyist selling PDFs and POD books in his spare time (some of which are amazing, BTW). But xiombarg was talking about White Wolf.

Oh, and distributors don't care if you publish supplements for your RPG. Like publishers, they would rather sell a lot of one thing than a little of lots of things. If you can design and market an RPG that produces consistent, evergreen sales without support products, the distributors will love you.
Title: the "supplement treadmill"
Post by: Ron Edwards on April 28, 2004, 04:25:41 PM
Hello,

That would be the so-called "industry" Red Herring #2.

I consider the size-based distinction you're making to be irrelevant, Greg. My points about this can be found in these threads:
Game design: hobby or career? (http://www.indie-rpgs.com/viewtopic.php?t=9423)
Successful RPG line (http://www.indie-rpgs.com/viewtopic.php?t=979)

As I see it, a business is a business if it has any expectation of making money, and continuing to do so - regardless of how many people are involved. A hobby is by definition a hobby when it is a money/time sink (or rather, if the payoff is measured in "fun").

My company, Adept Press, has one owner and member: myself. It is a profitable corporation. I consider it to be a successful business, in that it drains no money from me nor does it require outside funding of any kind. It is not a hobby (unlike my role-playing activities) and it is not my career (primary source of income). That doesn't fit into your framework of reference at all.

Mixing up these categories, and then pointing to bizarre variables like market-share or number of employees as some kind of metric of success, is characteristic for people who like to consider RPG publishing to be an "industry" (this term would provoke gales of laughter from anyone engaged in an actual industry).

Best,
Ron
Title: the "supplement treadmill"
Post by: FFG Greg on April 28, 2004, 04:57:01 PM
Quote from: Ron EdwardsHello,

That would be the so-called "industry" Red Herring #2.

As I see it, a business is a business if it has any expectation of making money, and continuing to do so - regardless of how many people are involved. A hobby is by definition a hobby when it is a money/time sink (or rather, if the payoff is measured in "fun").

My company, Adept Press, has one owner and member: myself. It is a profitable corporation. I consider it to be a successful business, in that it drains no money from me nor does it require outside funding of any kind. It is not a hobby (unlike my role-playing activities) and it is not my career (primary source of income). That doesn't fit into your framework of reference at all.

Cool. Gotta keep the terminology straight. Your defining things in terms of their relation to the creator/owner (business vs. hobby vs. career). I was defining things in terms of the enterprise itself. I'd call Adept Press, as you've described it, a self-supporting hobby, depending on the extent to which it is profitable and the extent to which it simply breaks even. But it's your sandbox so I'll call it whatever you want.

So, now that that's all straightened out, if you're running a run-of-the-mill dictionary-meaning kind of "business," i.e., a commercial enterprise engaged in as a means of livelihood, then you're probably going to need employees at some point and they won't be a red herring. I consider White Wolf (whose business model was originally being discussed in this thread) to be this sort of "business" (er, career, or whatever). Groovy?

Quote(this term would provoke gales of laughter from anyone engaged in an actual industry).

On this we can agree, though I might apply it to print publishing in general, which is really a ghetto for the vast majority of producers. Still, it's possible to run an RPG company as a sustainable, profitable small business ($500,000 to $5,000,000 in revenues). Like the pizzeria or laundromat owner, though, you'll probably need the occasional employee.
Title: the "supplement treadmill"
Post by: Ron Edwards on April 28, 2004, 05:06:12 PM
Hi Greg,

Looks like we're agreeing. The next step would be to discuss whether (a) White Wolf has succeeded in its business model, and (b) it did so specifically by following the supplement-publishing strategy.

Most folks I know would blindly call out "Yes" to (a). I am skeptical. I'd be very interested to know, for instance, how much start-up funding the company began with, and whether that has ever been matched and paid off. I'd also be very interested to know whether outside investors are currently involved, and what their actual ROI is. Since none of this information is probably going to be made public any time soon, I'll just remain skeptical.

Most folks I know would also cry out "Yes" to (b). And here I'll be very blunt: I consider White Wolf to have survived as a company, long-term, on the strength of one thing - release of new games. Its original plan to publish four games and then back each one up with astounding numbers of supplements was a financial disaster (and a solid parallel with what happened to The Chaosium at the same time).

Best,
Ron
Title: the "supplement treadmill"
Post by: Valamir on April 28, 2004, 05:22:27 PM
QuoteOn this we can agree, though I might apply it to print publishing in general, which is really a ghetto for the vast majority of producers. Still, it's possible to run an RPG company as a sustainable, profitable small business ($500,000 to $5,000,000 in revenues). Like the pizzeria or laundromat owner, though, you'll probably need the occasional employee.

As someone who invests money for a living, I'd prefer to talk in terms of Gross Margin, Net Income, and Net Operating Cash Flow than revenue.  Revenue is by and large an incredibly misleading number by itself.  A company can have lots of revenue and still be on the fast track to bankruptcy.  A company can report lots of revenue and still have virtually no cash flow thanks to the wonders of accrual based accounting.

So taking $500,000 to $5,000,000 in revenue as a reasonable range, What does the bottom line look like.  What kind of Profit Margin (i.e. Bottom line / Top line) are we looking at.


It is my decided thesis that a small independent operation with minimal overhead and no extraneous (i.e. "we wanna be a real business so we need to have X") expenses can wind up with comparable bottom lines on FAR less revenue (i.e. sales volume) than traditional business structure.

But its exceedingly hard to prove or disprove this thesis because actual hard industry data is not easy to find.  Its highly unfortuneate that there aren't audited financial statements for Wizards, and WW, and Ronin and Mongoose available for public inspection.

I'd also love to have access to actual salary data, because I suspect that most businesses that do manage to post a profit manage to do so in large part because the employees are decidedly under paid (compared to what they could earn competetively in the "real world") and thus expenses may well be artificially low.

Any arguement based on being a "sustainable profitable small business" is seriously weakened in the absense of such data.
Title: the "supplement treadmill"
Post by: FFG Greg on April 28, 2004, 05:47:52 PM
Hey Ron,

As for (a), of course I don't know what their initial capitalization was or what ROI their investors have enjoyed (or suffered, as the case may be). In addition to the obvious factors (annual revenues, etc.), this depends on how the business was managed: Was the goal to maximize growth or investor dividends? Or something else?

Having said that, I feel pretty confident that WW has been very profitable over the last 15 years. What was done with those profits, I have no idea.

Our sad little secret is that gross margins in this "industry" are actually very good: 60%+ ought to be sustainable by any publisher that has designs on being a "business" by my definition. The secret is sad because most RPG companies can't sell enough books for the nice margins to make a damn bit of difference in the not-so-grand scheme of things. 60% of bupkis is still bupkis. WW does not fall into this category, however.

As for (b), I think it's taken both core books and smaller, monthly supplements to keep WW running mostly smoothly most of the time over the last 15 years.

That said, it's instructive that WW has moved away from the traditional supplement model with its newer games (Exalted, with its multiple core books model, for example). No one who's paying attention *likes* the supplement treadmill: Yippee, we get to publish a series of products whose sales are guaranteed to consistently decline over the life of the product line! Most every well-managed company publishing RPGs (including WotC and WW) is looking for more efficient ways to get the consistent, reliable cash flow that the supplement treadmill generates.

However, unless you can constantly open new markets, this requires some kind of repurchase model: You have to sell more stuff to the same people, over and over again. Computer game publishers do this by constantly developing (or acquiring) and selling new games. Roleplayers have this nasty habit, however, of playing the same damned game for years, so that model hasn't worked as well for RPG companies. IMO, the "business" of RPGs would have been much, much better off if the notion of "campaigns" had been left to the wargamers (some of whom play the same damned game *session* for years!). If we played RPGs like we play computer games, producers would sell a lot more games a lot more profitably.
Title: the "supplement treadmill"
Post by: FFG Greg on April 28, 2004, 05:53:01 PM
Hey Ralph,

See my comments on gross margins in the previous post. The range of revenues I listed was just a way of categorizing "small business" for the practical purposes of the RPG "industry" (damn I'm using a lot of quotes). You're right, but as I note, gross margins on RPG products are actually very good. It's a little bitty market niche, though, so volume is a typically a real problem.
Title: the "supplement treadmill"
Post by: Pramas on April 28, 2004, 06:02:22 PM
Quote from: Ron EdwardsI think the issue of "must take care of employees" is a red herring. No one has a responsibility to carry employees; they are fireable.

I think the heart of the issue is whether you want to make your fulltime living from your company or do it on the side. Both approaches have benefits and drawbacks and both are perfectly valid. If you are doing this as your fulltime job, there is always at least one employee you can't fire: you.

QuoteThe real issue,  in my view, is a matter of who is the customer.

It's not an either/or proposition. Some salesmanship is required when dealing with the other tiers, but it's equally important to make products that gamers want and to market the products to them as well.

QuoteI know you wrote this humorously, but it also demonstrates the self-blinding distraction I see all the time among people in the so-called "industry."

And I think this comment typifies the self-congratulatory hubris I see at the Forge all the time. Some of you have found satisfaction selling products in new ways (PDFs, POD books via direct sales, etc.). Good for you. All hail the DIY spirit. I'm totally down with it. However, it's often coupled with a contempt for other approaches, and the seemingly constant need to reinforce the idea that "we rule, they drool."


QuoteEffectively, the distributors have (at certain points) exerted exactly this kind of control over publishers, for example, when they pushed for and received full voting membership status in GAMA.

Do you have another example? Because this one isn't true. If you look at the current GAMA by-laws (at www.gama.org), you will see that there are currently seven classes of membership:

A) Full Voting Member: One which is engaged (1) in the manufacture of gaming product for commercial sale or use, (2) as the exclusive United States sales representative, licensee or agent for the manufacturer of gaming product, (3) is the publisher of a magazine or other periodical relating to gaming  products, or (4) in providing Play By Mail game service, is eligible to be a voting member of this Association.

B) Associate Member: One which is eligible to be a full voting member and has requested that its membership be so limited.

C) Retail Member: One which is engaged in retail sales of gaming products.

D) Wholesale Member: One which is engaged in wholesale distribution of gaming products.

E) Communicating Member: Anyone not eligible for membership in one of the foregoing categories.

F) Vendor Member: Any producer or supplier of goods, finished products,
printing, die cutting, photographic processing, or other piece or item for
resale to a GAMA member.

G) Club or Convention Member: Any convention organization or club which is interested in furthering the purpose of this Association.

There may be a couple of distributors who qualify via A2, but even if so, they are far outnumbered by manufacturers.

There those would who would like to see GAMA become more of an industry organization, but it was clear at the meeting of Full Voting Members at GTS that most manufacturer members want to keep control of the organization.
Title: the "supplement treadmill"
Post by: Pramas on April 28, 2004, 06:15:13 PM
Quote from: Matt Snyder
First, disclosure: I AM one of those goons selling PDF and (sorta) Print on Demand products.

No need to call yourself a goon. :)

QuoteYou're right to bring revenue up. It's what makes the company able to pay me, and all my co-workers. I suspect you're also right to say that companies can make the "supplement treadmill" work.

They can, and there are examples of how to approach it smartly. There are also lots of examples of doing it badly and that's what I think some people get focused on. There are lots of bad businessmen in the game industry and there always have been, but you can't judge everyone by the worst examples.

QuoteNow, I know who you are, and I know you're a pretty savvy guy. I therefore assume that you do NOT think that simply churning out product is the real way to generate revenue. It is merely one way. And, it's probably a very time-intensive, largely inefficient way.

Indeed, and that's why Green Ronin has taken the approach it has. Other companies have taken the opposite approach but we decided early on we didn't want to go down that road.

QuoteAnother CRUCIAL way to make money is marketing. Understanding your audience. Finding and reaching new audiences. You could do all of this, creating NEW revenue, with a handful of tidy, well-done game books and supplements. It appears as though too few companies make this happen. No one's using marketing to create any substantial portion of their revenue. No one's really doint anything at all except pushing books out the door and reaching the same, aging demographic of geeks.

The main trouble here is that most RPG companies are content to let D&D be the gateway product for all roleplayers. Well that, and marketing to new markets costs money most companies don't have. That said, you do see games from time to time that try to buck the trend. Our Blue Rose game is trying to bring readers of Romantic Fantasy fiction into roleplaying directly, for instance.

QuoteHowever, I'm not seeing sophiticated marketing -- on par with serious publishers or media / content companies -- at any level, even WotC (who generally does the best job).

WotC spent a staggering sum of money marketing 3E, and they built on a very recognizable brand name, but even so they didn't break 1 million units of the Player's Handbook. The type of marketing you are talking about is simply beyond the means of most RPG companies.
Title: the "supplement treadmill"
Post by: Valamir on April 28, 2004, 06:33:50 PM
Quote from: FFG GregHey Ralph,

See my comments on gross margins in the previous post. The range of revenues I listed was just a way of categorizing "small business" for the practical purposes of the RPG "industry" (damn I'm using a lot of quotes). You're right, but as I note, gross margins on RPG products are actually very good. It's a little bitty market niche, though, so volume is a typically a real problem.


Quite right.  

This is actually a big part of my thesis.

In any business you have variable costs and fixed costs.  The more volume you push the more you want to focus on fixed costs, because once you pay for that the rest is gravy.  In a high volume business you want to carry as little variable cost deadweight as possible.

However, in a low volume business, fixed cost will kill you (as you expressed above) because you may never be able to exceed those fixed costs by enough to make any real money.  Its better to have the bulk of your expenses be variable so that you're only incurring them in proportion to your revenue and don't wind up upside down and in the red.


Given that RPG publishing is a pretty low volume business, it seems to me that a high variable / low fixed business model would be much more appropriate.

This is what leads me to question running an RPG concern as a traditional "business".  

Typically, employees are categorized as "variable" (actually semi-variable, or variable but inelastic, but lets keep it simple) because employers can hire and fire/lay off them in rough proportion to sales volume.  

But in a small business, it is generally better to categorize employees as fixed.  This is because small businesses generally don't have a large number of volume sensitive employees to hire and fire (like assembly line laborers or a big sales staff).  Further in an insular industry like gaming employees tend to be friends and contacts rather than faceless cogs easily swapped.


So, if we take a look at the business:

Everytime I see things like "employees", and "office space"; I have to wonder at it.  These things are fixed costs, and in a low volume business should be avoided as much as possible.  Salaries should be driven by production and sales quotas (incentive based or even outright commission based) which would tie the expense to sales and hense convert it into a variable one.  Offices should be minimized and the absolute maximum amount of work possible done electronically.   Freelancers should not be paid by the word (a fixed expense to overcome) but on sales (Either royalty sharing or a stepped payment scheme based on hitting sales figures).

Technology expenses should be maximized because by and large these expenses (such as band width and number of machines needed) generally scale with volume and can thus be characterized for our purposes as variable.  The timing of technology expenditures (being discretionary) is also highly dependent on cash flow which is another characteristic of variable costs.  More reliance on virtual conferencing and on line design space and less emphasis on needing artists and layout folks to be physically present in the same location means less fixed cost (office) and more variable cost (equipment to make it happen).

So my thesis is, that an RPG company geared towards arranging its cost structure to be as variable oriented as possible, should enjoy better profitability over time, until such time as it becomes a high volume concern and should begin shifting towards a fixxed oriented structure.  Particularly complicated businesses might run different divisions with different cost structures.  I could speculate that a high volume businessline like Magic or Clix at their peak would benefit from a more fixed structure relative to RPG publishing.


All of this is just speculatation, however, (well founded but speculation non the less) in the absence of actual numbers.
Title: the "supplement treadmill"
Post by: Valamir on April 28, 2004, 06:38:45 PM
Quote from: PramasThe main trouble here is that most RPG companies are content to let D&D be the gateway product for all roleplayers. Well that, and marketing to new markets costs money most companies don't have. That said, you do see games from time to time that try to buck the trend. Our Blue Rose game is trying to bring readers of Romantic Fantasy fiction into roleplaying directly, for instance.


WotC spent a staggering sum of money marketing 3E, and they built on a very recognizable brand name, but even so they didn't break 1 million units of the Player's Handbook. The type of marketing you are talking about is simply beyond the means of most RPG companies.


I would GREATLY appreciate you, at some point, starting on a thread on Blue Rose and describing what you are doing to actively bring readers of romantic fantasy into roleplaying.  How you're promoting it, what venues you're going after, what different approach and presentation you take with a non gamer audience.

Expanding beyond normal gamerdom is a frequent rallying cry around here.  It would be great to have a an actual functional datapoint of one way it was done and how it turned out.
Title: the "supplement treadmill"
Post by: FFG Greg on April 28, 2004, 06:55:20 PM
Hey Ralph,

See my comments on gross margins in the previous post. The range of revenues I listed was just a way of categorizing "small business" for the practical purposes of the RPG "industry" (damn I'm using a lot of quotes). You're right, but as I note, gross margins on RPG products are actually very good. It's a little bitty market niche, though, so volume is a typically a real problem.
Title: the "supplement treadmill"
Post by: FFG Greg on April 28, 2004, 06:56:01 PM
Hey Ralph,

See my comments on gross margins in the previous post. The range of revenues I listed was just a way of categorizing "small business" for the practical purposes of the RPG "industry" (damn I'm using a lot of quotes). You're right, but as I note, gross margins on RPG products are actually very good. It's a little bitty market niche, though, so volume is a typically a real problem.
Title: the "supplement treadmill"
Post by: daMoose_Neo on April 28, 2004, 11:16:06 PM
Ralph-

If you're actually interested in doing some numbers on that (small VR companies), I can provide some come the close of the year~
My company, Neo Productions Unlimited, exists purely in VR. We have three core members from around the world (Myself in the States, Kyle in Canada and Mike in the Netherlands) as well as a pair junior members in Australia and Florida. With freelance and design work, we've worked with five individuals and two studios, as well as working out an arrangement with a small film studio for the production of some live commercials.
Neo's existed in some fashion or another for the past four years with this year being the biggest push from hobby to smallish-business. All of our contact up to this point has been online, though we may have a physical meeting at GenCon this summer (mostly out of "it would be cool if").
Our "flagship" title is the card game Final Twilight (See signiture), though we're also working on various pieces of software (Vortex, an RPGMaker style program for online RPGs and KABrowser for the Canadian school system).
This is the first year we've made an actual effort to do anything more than hobby work, so its going to be interesting come the close of the year.
As far as financing, we're looking at about $7,000 start-up (TCG's are NOT cheap) including artwork expenses, marketing, printing, and other incidental costs (mostly related to site maintance such as domains and hosting).
Title: the "supplement treadmill"
Post by: Valamir on April 29, 2004, 12:17:13 AM
Good stuff Neo.  Perhaps you'd like to start a thread here in publishing describing your virtual collaboration.  Strengths, weaknesses...times you really wished you all could be physically together and how you worked around that.  What sort of technology you used to facilitate the collaboration beyond email and phone calls (if any), that sort of thing.  Would be pretty interesting IMO.

Also, how have you managed to do a CCG on a $7,000 budget?  My understanding was that the card printing alone typically starts around $10,000.  That would make for a good new thread as well.
Title: the "supplement treadmill"
Post by: Ben Lehman on April 29, 2004, 03:22:56 AM
I would note that there is one company that does very very well on the "supplement treadmill--" it has a few game lines which it produces mad amounts of supplements for, and seems to stay pretty solvent.  That company is Palladium Books.

I'd love to see some comments as to how they pull this off, although I know that they are a rather secretive company and thus even less information is availible than one might expect.

What makes RIFTS different from Vampire, in a sales perspective?

yrs--
--Ben
Title: the "supplement treadmill"
Post by: Ron Edwards on April 29, 2004, 12:26:09 PM
Hello,

Chris (Pramas)*, your point about the actual status of distributors within GAMA isn't relevant to my point. As I see it, any inclusion of distributors in a "manufacturer's" business organization, on any basis except as potential customers, is letting the fox into the henhouse. Their actual number is irrelevant as well - the single vote and verbal input of a distributor is a powerful thing, especially in such a small and rumor-heavy community. The impact on the bookstores is historically observable, and I especially call attention to the changes in buy-back policies throughout the short history of the hobby.

Second, you referred to hubris. As I see it, any perception that my (or a typical Forge) outlook is all about "we're better, you suck" is a matter of projection. A game's quality is what it is, regardless of who wrote it or how it was produced - independently or not. I do think that independent publishing offers a better business model, and that the ideal of a career-fulfilling game company has gone bust hundreds of times. I also think that independent publishing (as defined here at the Forge) yields better games [/i]on the average[/i]. But neither of these points are anyone's concern but my own, and they certainly have nothing to with "you all suck." Again, any perception of such a thing is plain old low-self-esteem projection: "That guy must think I suck, how dare he."

Ben, if I'm suspicious of White Wolf's source of operating funds, then I'm doubly so for Palladium. I make no claims about either company, but I don't see any reason to assume, off the top, that their production costs are met from their sales-based profits.

Best,
Ron

* Too many Chris's! Oh well.
Title: the "supplement treadmill"
Post by: xiombarg on April 29, 2004, 01:29:22 PM
Quote from: Ron EdwardsBen, if I'm suspicious of White Wolf's source of operating funds, then I'm doubly so for Palladium. I make no claims about either company, but I don't see any reason to assume, off the top, that their production costs are met from their sales-based profits.
Especially when you consider that Palladium is, in essence, one man and his wife -- nearly all of Palladium's other "employees" are arguably freelancers. That isn't all that different from any other form of one-man outfit or family business.

I also have to wonder if the demise of West End Games (yes, I know they technically still exist, kinda, but not like they used to) has anything constructive to offer us.

Also, on the issue of employees, I will note there are many non-publishing careers and/or businesses that do not have employees. An accountant, a business consultant, even a doctor can run a business without any employees, tho the latter ususally has a secretary, at least. And those are just off the top of my head, not even considering things like pretzel carts, which are very much one-man businesses in the fullest sense. That would seem to imply the idea that in order to be a "legitimate business" you need employees should be reconsidered.
Title: the "supplement treadmill"
Post by: Matt Wilson on April 29, 2004, 01:46:43 PM
Quote from: xiombarg
Quote from: Ron EdwardsBen, if I'm suspicious of White Wolf's source of operating funds, then I'm doubly so for Palladium. I make no claims about either company, but I don't see any reason to assume, off the top, that their production costs are met from their sales-based profits.
Especially when you consider that Palladium is, in essence, one man and his wife -- nearly all of Palladium's other "employees" are arguably freelancers. That isn't all that different from any other form of one-man outfit or family business.

Is Palladium the sole source of income for this one man and his wife? I would think that if the writing is contracted out, there's not a lot for him to do.

In any case, he's gotten a massive amount of return on the same 40 or so pages of rules for the last 15-20 years.
Title: the "supplement treadmill"
Post by: xiombarg on April 29, 2004, 02:08:41 PM
Quote from: Matt WilsonIs Palladium the sole source of income for this one man and his wife? I would think that if the writing is contracted out, there's not a lot for him to do.
That's a good question. Palladium plays very close to the chest, so no one's sure. I welcome input from anyone who knows something...

QuoteIn any case, he's gotten a massive amount of return on the same 40 or so pages of rules for the last 15-20 years.
Which, if rumor is to be believed, was mostly written by the wife, probably for free. Talk about lowering your overhead costs... ;-D
Title: the "supplement treadmill"
Post by: quozl on April 29, 2004, 02:23:22 PM
Quote from: Matt WilsonIs Palladium the sole source of income for this one man and his wife? I would think that if the writing is contracted out, there's not a lot for him to do.

You might find this press release interesting:
http://www.palladiumbooks.com/press/press2004-04.html
Title: the "supplement treadmill"
Post by: Pramas on April 29, 2004, 09:38:38 PM
Quote from: Ron Edwards
Chris (Pramas)*, your point about the actual status of distributors within GAMA isn't relevant to my point.

Since when are the facts not relevent? You said they demanded and received full voting member status. That is false and it's falsehood undermines the point that rested on it.

QuoteAs I see it, any inclusion of distributors in a "manufacturer's" business organization, on any basis except as potential customers, is letting the fox into the henhouse.

First of all, you are drastically over-estimating GAMA's importance. GAMA has been trying to improve itself and become more relevent, but for many years the organization has done little but run the GAMA Trade Show and Origins. Second, the current by-laws have been in place for 14 years. I don't think you can ascribe any major events of the game industry in that time to the fact that distributors had a Wholesale Division in GAMA and one seat on the board.


QuoteBut neither of these points are anyone's concern but my own, and they certainly have nothing to with "you all suck." Again, any perception of such a thing is plain old low-self-esteem projection: "That guy must think I suck, how dare he."


Ah, I see. So there was no contempt in your mind when you said this?

"I know you wrote this humorously, but it also demonstrates the self-blinding distraction I see all the time among people in the so-called "industry."

Or this?

"That would be the so-called "industry" Red Herring #2."

Or this?
"(this term would provoke gales of laughter from anyone engaged in an actual industry)."

And surely I was imagining a self-congratulatory tone when Xiombarg said this:

"To me, this is a shining example of what's wrong with the "supplement treadmill" that the distribution system imposes on the market. ...Contrast this to games sold mainly through direct sales, which rarely have this problem, even if they are reasonably popular..."

Yeah, guess that was all in my mind.
Title: the "supplement treadmill"
Post by: Ron Edwards on April 30, 2004, 12:15:03 AM
Chris,

You've been sarcastic and patronizing on this thread. You are expected to cease instantly. I tell you this very seriously: the contemptuous smack-down behavior that's standard on industry websites and lists is absolutely not tolerated here.

1. "Falsehood?" You corrected my mistake, fairly. I accepted that then and do so now. This is an example of correct comportment on my part - accusing me of actually lying ("falsehood") is an example of poor comportment on yours.

2. The observed phenomenon I'm talking about (sudden drop in rate of publication of core books; boom in supplements) dates back, yes, to 15+ years ago. GAMA meant a lot more back then.

3. Regarding tones and intents, what you're doing is in fact projection. Furthermore, it's of no interest or use to take on the role of defender of others. No one has expressed contempt for you, yourself. Take care of yourself; leave "others" to do it for themselves if they want to.

You've participated here long enough to recognize that only one person's judgment reigns here, regarding comportment: mine. If you don't like it, there are ways to appeal, but otherwise, it might be time to decide whether you're contributing or gaining anything by posting here.

Best,
Ron
Title: the "supplement treadmill"
Post by: xiombarg on April 30, 2004, 09:20:22 AM
Quote from: PramasAnd surely I was imagining a self-congratulatory tone when Xiombarg said this:
Um, yeah, Chris, you were imagining it. At the very least, you could give me the benefit of the doubt.

When I started this thread, I was interested in hearing about the effects on publishing RPGs caused by the demand for supplements in the current distribution system, and was concerned about its effect on the creative output even of companies considered to be a success by many gamers, like White Wolf.

I appreciate your input on this thread, tho I'm a bit confused by your rancor.
Title: the "supplement treadmill"
Post by: daMoose_Neo on May 01, 2004, 11:51:32 AM
Things are vastly different than from fifteen years ago too~
Forge = perfect example~
I'm not big in the "industry" background and maybe I'm stating the obvious, but there has to be some kind of corrilation here. If the Wholesalers got a seat on the GAMA board or whatever about fourteen years ago with the current by-laws (or even earlier?) and the trend has been going this way for about the past fifteen years, I don't think thats purely coincidence- The proverbial instant they sign on to GAMA the 'industry' adjusts itself to their way of doing things?
GAMA's probably lost a lot of its prestige due to that and the net here~ Indy developers can produce things at their pace, aren't bound to the mercy of the major publishers and their release schedules, indy developers can take the time to develop whatever supplements/adventures they may want to add to their core or they could just support the core, whatever they want~
Without the new blood, GAMA's stuck with the Wholesalers, retailers, clubs and conventions with mostly the older companies as developing members. Least thats how it looks to me from the outside~

*sorry if this is off topic*
Quotehow have you managed to do a CCG on a $7,000 budget?

Little creativity ^_^
1) This is the first half of the initial set, 50 cards only to this "set"
2) Went through a company in India for the printing, able to order 2016 decks of 54 cards for around $3600
3) To get what I wanted (3 different precon decks), I had to be a little creative- each deck I ordered contained 1 of each card plus a couple reprints for cards common to all decks. Now, once they're in, I have to sit down and do a little repacking, but I get what I wanted at a cost I could afford. I'm going to end up with about 504 of each deck type and some extras I can use as giveaways at conventions, events or 'mini decks' for demo purposes or sending stores~
Total ends up like:
$3600~ for printing
$2000 for art (53 pieces)
$ 620 for GenCon booth
$ 800 accounts for majority of incidental costs (some shipping costs, internet hosting, domains, DBA and other small business type costs)
Title: the "supplement treadmill"
Post by: Erick Wujcik on May 02, 2004, 08:51:23 PM
Quote from: FFG Greg
Quote from: Ron Edwards...distributors don't care if you publish supplements for your RPG. Like publishers, they would rather sell a lot of one thing than a little of lots of things. If you can design and market an RPG that produces consistent, evergreen sales without support products, the distributors will love you...

This does not match my experience. Not at all.

Phage Press ran into lots of problems with distributors who wanted there to be a larger product line. Since Phage Press only published Amber Diceless and Shadow Knight it was considered 'too small.'

Now this wasn't the case back in the early 1990s. Back then there were a range of distributors who worked closely with retailers, and they would point out that Amber Diceless was a very consistent sales item. It never lingered on the shelves...

I can't say why exactly, but the big distributors (including Alliance and Diamond) had no patience for any small line. From my perspective it was because they focused exclusively on selling new -- if it wasn't a new release, there was no promotion.

Just my personal experience.

Erick
Title: the "supplement treadmill"
Post by: Erick Wujcik on May 02, 2004, 09:30:05 PM
What follows is my opinion. I'm not an official spokesman for Palladium Books... but I've been a friend of the owner since before it was founded, and a freelance writer/designer from its very first RPG product (that would be "The Mechanoid Invasion").

Quote from: Ben LehmanI would note that there is one company that does very very well on the "supplement treadmill--" it has a few game lines which it produces mad amounts of supplements for, and seems to stay pretty solvent.  That company is Palladium Books.

In my experience Palladium Books produces fewer supplements than many other role-playing publishers.

However, Palladium's supplements tend to stay in print, and stay on the shelves.

For example, to the best of my recollection, with the exception of the loss of a line (Palladium no longer has the rights to Teenage Mutant Ninja Turtles, or Robotech), or replacement by a new edition, none of the books I wrote for Palladium have ever gone out of print.

I wrote Revised RECON for Palladium in 1986, and Advanced RECON the following year. Both are still in print, combined into Deluxe RECON. If you go through my list of publications (http://www.47rpg.com/resume/Publications.html), you'll find that nearly all my Palladium work is still in print.

Quote from: Ben LehmanI'd love to see some comments as to how they pull this off, although I know that they are a rather secretive company and thus even less information is available than one might expect.

Hardly what I'd call 'secretive.'

Kevin Siembieda is the president of Palladium Books, as well as the chief writer, designer and editor. He designed the principle RPG system, and wrote the three 'core' rulebooks; Palladium Fantasy, Heroes Unlimited, and Rifts (he also wrote some of the other rulebooks, but so have others, including myself).

His wife Maryann left a year or so ago, and they are now divorced.

As far as full-time employees, there are really only four. A sales & marketing guy (Steve), an editor (Wayne, editor of the Rifter), and a couple of shipping/warehouse people. Add a couple of part-time 'support' people, and a bunch of freelance writers and artists, and the payroll is less than some of the start-ups I've seen.

At one time or another, there's been plenty posted on their website, and if you ask Kevin at a convention, he's pretty open in his opinions about his company and the industry.

Again, in my (pretty biased) opinion, Palladium aims to pack a lot of value into each book, and that translates into long-term sales.

Erick
Title: the "supplement treadmill"
Post by: Erick Wujcik on May 02, 2004, 09:49:37 PM
Quote from: Matt Wilson...{Kevin Siembieda/Palladium Books}'s gotten a massive amount of return on the same 40 or so pages of rules for the last 15-20 years.

This is actually a rather good point.

The  Palladium Books core system has remained relatively fixed over a couple of decades. Yet the products have sold in the hundreds of thousands (my own Teenage Mutant Ninja Turtles & Other Strangeness sold over 180,000 copies, just for the basic rulebook).

Why?

Because Palladium provided the customers what they really wanted, which was (1) cool characters to play, (2) fun-filled worlds to Game Master, and (3) lots and lots of potential adventures.

My opinion, of course...

Erick
[/i]
Title: the "supplement treadmill"
Post by: ethan_greer on May 03, 2004, 08:48:02 AM
Hmm...

So, it seems like (from anecdotal evidence) that the supplement treadmill can work, provided that you have a core product that is popular.

It would seem then that entering the market with a plan to produce a gazillion supplements is problematic.  Instead, new publishers should first put out books tentatively and at as low a risk as possible until they get a bonified hit.  Once that happens, it's much safer and more plausible to jump on the treadmill, producing supplements for their hit game.

Thoughts?
Title: the "supplement treadmill"
Post by: xiombarg on May 03, 2004, 10:40:21 AM
I'd like to say that I really, really appreciate Erick weighing in on this stuff, particularly in terms of Amber Diceless being "too small" for distributors. I think the focus on "new product" is very, very real, and it only intensified after the CCG craze.

Quote from: ethan_greerSo, it seems like (from anecdotal evidence) that the supplement treadmill can work, provided that you have a core product that is popular.
Well, if I'm interpreting what Erick said correctly, it's sort of a combination of supplements and "consistent sales" allowing one the remain solvent.

QuoteIt would seem then that entering the market with a plan to produce a gazillion supplements is problematic.  Instead, new publishers should first put out books tentatively and at as low a risk as possible until they get a bonified hit.  Once that happens, it's much safer and more plausible to jump on the treadmill, producing supplements for their hit game.
Except that that trick only seems to have worked so well for Vampire: The Masquerade, as Malcolm pointed out. At some point you get "mined out".

Of course, it might be a matter of how hard you hit the treadmill. Palladium puts out supplements at a decent rate, but at a lot less furious rate than White Wolf. Also, the multiversal background of Rifts arguably allows for a larger variety of supplements than Vampire, as you can just make up a new dimension whenever you want, and a particularly popular book can become a whole line, like Phase World did.

Erick makes another point that I'd like to address real quick: I don't think anyone here denies that setting sells. Vampire and Rifts are proof of that. Hell, I've even considered running a Rifts game using a system I can tolerate better, like Big Eyes: Small Mouth.

However, this doesn't mean that system doesn't matter, particularly for actual play, as opposed to sales. While I am drifting into a topic that is perhaps better addressed on the "Forge Hubris" thread, it's important for people to remember that "System Matters" is NOT the same thing as "Setting Doesn't Matter", a false impression that some people sometimes get about that line of Forge thought. (Further thoughts on this would be perhaps best in another thread, but I wanted to mention this real quick.)
Title: the "supplement treadmill"
Post by: Valamir on May 03, 2004, 02:36:59 PM
Quote(my own Teenage Mutant Ninja Turtles & Other Strangeness sold over 180,000 copies, just for the basic rulebook).

That's an interesting number Erick.  I'm curious as to the following:

1) what period of time does that represent, and do you have an idea of what the sales cycle was?  i.e. does that represent a fairly consistant 18,000/yr for 10 years, or 100,000 the first year, and 8,800/yr after that?

2)How many printruns / how large are the individual print runs for a book like this.  I'm betting this doesn't represent a single 200,000 unit run, but are the runs typically 10-20,000 units or 4-5,000 units for comparable products.

3) Can you provide clarification on "sold".  Does this suggest there are 180,000 gamers with a copy of the book sitting on their shelf?  Or 80,000 gamers with a copy of the book sitting on their shelf and 100,000 copies sitting in a warehouse / retailer discount racks?  For games that have sales like this, do you have any feel for where in the spectrum they lie between # of copies that have entered the distribution channel vs. # of copies that actually wind up being sold to gamers.?
Title: the "supplement treadmill"
Post by: mearls on May 03, 2004, 02:54:00 PM
I think there's one dimension that's been overlooked in this discussion.

Many times, there is no division between an RPG company's creators and business people. They either have similar mind sets or they are the same people. This can cause a tremendous barrier to looking at a game line's sales and deciding that it's time to pull the plug. If a game is your creative pride and joy, it's awfully had to order its death (IOW, put it out of print or stop making new stuff for it.)

This problem is further exacerbated if a company can't come up with a new RPG line to take the old one's place. In that case, the company is stuck squeezing more releases from a dead line.

As for the thesis that the distributors are behind the treadmill, I think it isn't as clear cut as it might seem. A distributor likes to buy books that sell. A successful RPG line that spawns a steady stream of releases is a good thing to them. I think the demand for a full line draws on two things:

1. A distributor only has so much time and money to go around. A big line with lots of ads and support shows that you're serious about generating interest. Granted, it might all be a show, but the distributor is going to be much more eager to deal with a publisher that seems serious about making a success of it at an order of magnitude greater than what you're looking for.

2. The new thing sells, but perhaps only because the old thing doesn't. You might sell 2000 core books to the distributors, and the next month they want a supplement, not more core books, because no one wants to order the core book any more. The stores have sold enough and have a copy on the shelf, but a new book might sell to your newly minted customers.
Title: the "supplement treadmill"
Post by: Ron Edwards on May 03, 2004, 02:55:22 PM
Hello,

Clarification note: Erick, you were quoting & replying to FFG Greg, not to me. My outlook parallels yours, and I suggest that the time we're discussing (very late 80s) was the point at which the three-tier system shifted into an aggressive periodical-style approach toward publishing.

Best,
Ron
Title: the "supplement treadmill"
Post by: Ron Edwards on May 03, 2004, 02:57:58 PM
Whoa, lots of posts ...

Mike (mearls), I wouldn't like to encourage a conspiratorial interpretation of the distributors' and others' roles in RPG history. "Behind it all" really isn't what I'm after.

I think everyone's actions in this history can be understood in terms of economic self-benefit, but that doesn't necessarily mean people thought about it in that way. It's very easy to see a distinct benefit to oneself as "only natural" or to phrase it to oneself or others in terms of mutual benefit, even when it isn't very.

Best,
Ron
Title: the "supplement treadmill"
Post by: mearls on May 03, 2004, 03:57:33 PM
Quote from: Ron EdwardsWhoa, lots of posts ...

Mike (mearls), I wouldn't like to encourage a conspiratorial interpretation of the distributors' and others' roles in RPG history. "Behind it all" really isn't what I'm after.

Oh, I agree. If I wanted to put the blame someone, I'd lay it on the perception that companies have been successful with it, rather than any sort of directed effort. But that's neither here nor there.

Quote from: Ron Edwards
I think everyone's actions in this history can be understood in terms of economic self-benefit, but that doesn't necessarily mean people thought about it in that way. It's very easy to see a distinct benefit to oneself as "only natural" or to phrase it to oneself or others in terms of mutual benefit, even when it isn't very.

Ah, I see. All is clear now. I agree completely - the distributors have a view of what makes a "winner" and that directly or indirectly filters through the industry. In some cases, those traits do bear sales fruit, at least as far as my contacts and research goes. OTOH, if you don't have use for the distributors model, they don't offer you much.

One thing to keep in mind is that RPGs are increasingly a marginal activity for hobby game distributors when compared to miniatures, CCGs, German boardgames, hell, even stuffed Cthulhu dolls. I think that drives a lot of the preference toward full color, heavily supported game lines. You're stuck competing on the distributor level with products that precisely rely on the supplement treadmill to keep customers happy.

But I will say that at least in some cases, RPG companies can do very well through the three tier system. However, it takes a level of clear-eyed practicality that can prove intimidating. The problem arises when you take a game that should see its first life as a PDF, or a 50 copy print run sold at conventions, and try to package it up for distribution to all 3 tiers.

Of course, you already know that.
Title: the "supplement treadmill"
Post by: Erick Wujcik on May 04, 2004, 05:13:37 PM
Quote from: Ron Edwards...Erick, you were quoting & replying to FFG Greg, not to me. My outlook parallels yours...

Sorry. It was an editing error on my part.

Erick
Title: the "supplement treadmill"
Post by: Erick Wujcik on May 04, 2004, 06:26:15 PM
Quote from: ValamirThat's an interesting number Erick (180,000 copes of the TMNT RPG).  I'm curious as to the following

Since I'm not the actual publisher (just the writer/designer), and since I don't have my yearly royalty statements at hand, I can't give you exact numbers, but I can certainly make some decent estimates.

Quote from: Valamir1) what period of time does that represent, and do you have an idea of what the sales cycle was?  i.e. does that represent a fairly consistant 18,000/yr for 10 years, or 100,000 the first year, and 8,800/yr after that?

Most of the sales took place in the first few years after the initial release (1985). Sales probably peaked in 1987. At a guess, I'd say that 80% of the sales were in the first three years. for the following ten years, sales were a couple of thousand per year...

The main thing to bear in mind is that as soon as the TMNT cartoon hit it big, the role-playing game sales tanked, sank, and disappeared. The original fans were, mostly, in their late teens... and as soon as the TMNT were 'cool' for their five year old siblings, the game was dead.

Quote from: Valamir2)How many printruns / how large are the individual print runs for a book like this.  I'm betting this doesn't represent a single 200,000 unit run, but are the runs typically 10-20,000 units or 4-5,000 units for comparable products.

The initital press run, if I remember correctly, was around 10,000. There were a lot of editions (14? -- seems about right). I think most were in the 10-20,000 range.

A guide for the curious:

First Edition: Look on the spine, if it reads "Teenage Mutant Ninja Turtles and other Strangness" (missing the 'e' after the 'g'), then it's the very first edition.

Early Editions: The front cover text is all black.

Revised Edition: The front cover text is an outlined yellow... The copy on the shelf next to me is a 'Revised' TMNT, the 6th printing, from 1988.

Quote from: Valamir3) Can you provide clarification on "sold".

Sold means sold.

Back in those days everything went through distributors, and on a non-returnable basis.

There were 180,000 copies printed, and I've got no reason to believe that the vast majority didn't end up in the hands of gamers... or at least readers.

When the license between Mirage (the owner of the TMNT IP) and Palladium ended, there weren't many copies of the basic game left. In fact, I wanted to buy a box for my personal collection, and there were none left at Palladium (I ended up buying about 20 copies from, as I recall, Wargames West).

Quote from: ValamirFor games that have sales like this, do you have any feel for where in the spectrum they lie between # of copies that have entered the distribution channel vs. # of copies that actually wind up being sold to gamers.?

It's a good question.

For TMNT the answer is that very close to 100% went to gamers... but that's because the main sales were back in the late 1980s, and there was plenty of time to sell out what remained in the warehouse. And also because Palladium was selling on a non-returnable basis.

It would be a considerably different story today, since a lot of companies sell through the book distribution network, where massive initial sales can be as much as a liability as an asset when huge numbers of books (or just ripped off covers, depending on the contract) end up back with the publisher.

Erick
Title: the "supplement treadmill"
Post by: FFG Greg on May 05, 2004, 12:26:30 PM
Quote from: Erick Wujcik
The  Palladium Books core system has remained relatively fixed over a couple of decades. Yet the products have sold in the hundreds of thousands (my own Teenage Mutant Ninja Turtles & Other Strangeness sold over 180,000 copies, just for the basic rulebook).
[/i]

Erick, this seems to contradict what you said in response to my claim, i.e., that distributors only want to "sell new" and will only support big lines with lots of supplements. I could be wrong, but I don't recall TMNT having a lot of supplement support.

I'll repeat what I said: If you publish a core book that sells like crazy without supplement support, something like TMNT, the distributors will love you for it. If you publish a core book that sells...not so much...without supplement support, they'll love you not so much.
Title: the "supplement treadmill"
Post by: Ron Edwards on May 05, 2004, 12:44:11 PM
Hi Greg,

With respect, I think that TMNT in the mid-late 1980s, as with D&D in the late 70s and Vampire in the early 90s, is a poor example for discussing general trends and tactics.

All three represent a brief correspondence of role-playing material with a wave of "teen craze" purchasing. That's distinct from fan purchasing or anything else associated with SF or pop subculture - it literally means a ton of people who are buying the game as gear.

It doesn't last long (although it makes a huge impression on retailer re-ordering habits that does last), and I think it's best viewed as a lucky draw rather than a reliable tactic that can be generalized across publishing in general.

Best,
Ron
Title: the "supplement treadmill"
Post by: Lxndr on May 05, 2004, 01:11:05 PM
TMNT had some supplement support - certainly a significant number of supplements for a game whose heyday was in the late 80s and early 90s (even if it's a small amount of supplement support compared to later games).  There were several adventures (Turtles go to Hollywood being the only one I remember), a number of expansions (Transdimensional TMNT, whatever the name of the Turtles in Space book was).  And of course the entirety of the After the Bomb series (After the Bomb, Road Hogs, Mutants Down Under, Mutants in Avalon, Mutants of the Yucatan).

Combine that with the fact that TMNT wound up, a few years later, being "supplemented" by the sales of non-RPG TMNT product thanks to the popularity of the show (which, according to the official TMNT website, can be blamed in part on the RPG), and after that the combined popularity of the rest of the Palladium products (Rifts being the big one), TMNT managed to feed off everything else like a remora.

TMNT is definitely not typical, by dint of the TV show alone.  But I think its supplement support was pretty significant for the time period in which is was made.
Title: the "supplement treadmill"
Post by: ryand on May 13, 2004, 04:42:17 PM
Quote from: Erick Wujcik
This does not match my experience. Not at all.

I think your experience probably is right on the spot.

The problem I think is that the distributors have two slightly conflicting needs.  They need a company to have enough products to generate enough profit to make the effort of stocking and selling that company's whole line worthwhile.  They also want the individual products that are being sold to have a fairly high volume.

They're not set up to handle a company with just one or two products that sell really well, even though a strict analysis of that company's business would probably show that it was more than worthwhile to support.  The rare exception isn't enough to counterbalance the vast number of small, limited line publishers who end up costing more in administrative and warehousing overhead than they generate in net profits.

The distribution tier also has a problem with how to sell stuff (as opposed to take orders for) as a business model.  Alliance, for example, regularly solicits for thousands, maybe tens of thousands of SKUs.  They know they have a limited amount of time to talk to any given retailer, and cannot possibly "stock check" even the top 100 SKUs.  So instead they focus on hot, high volume frontlist sales, and expect that a store moving the frontlist will de facto move enough backlist to motivate the store owner to do their own stock checking an restock analysis.  Clearly, in many cases, for many unique products (like Amber) this system is a failure.

I think the ideal configuration in today's market for an RPG focused publisher  who wants to use the 3-Tier system is probably a company with one core book that has evergreen sales, coupled with 3-4 significant releases each year, spaced far enough apart to generate frontlist sales across a significant percentage of the year.  Ideally, some (or all) of those releases should also have "evergreen" potential, creating a sizable library of regularly re-stocked items (and thus steady monthly cash flow) over time.  This, in my opinion, is the state that Palladium has evolved into, and it seems to be working well for them.  It may also be the end state that White Wolf is evolving towards as well.

For what it's worth, when I was operating RPG International in the early 90's we regularly moved 1 copy of Amber a month, and it was unusual in that it was the only book from a "small publisher" for which we had such repeat sales - unusual enough that I still remember being surprised by it nearly a decade later.  What Amber managed to acheive was pretty amazing.

Ryan
Title: the "supplement treadmill"
Post by: Ron Edwards on May 13, 2004, 04:50:10 PM
Hiya,

Ryan, I'm in complete agreement in all particulars with your post.

New questions include:

How long the tactic you describe continues to be viable, in terms of years

Whether actual profits stay high enough as re-printing costs for the core book and especially-popular supplements kick in

(related to above) Whether there's an identifiable point in which one is better off re-printing the canon rather than adding new items

Whether a game with the kind of in-play popularity that makes this tactic possible would do better with primarily direct sales (not abandoning the store sales, just not relying on them as the #1 priority)

What sort of communication and reinforcement by the publisher would help retailers recognize that the game sells in this fashion (experience teaches me that many retailers don't track sales in a time-scale that can catch it)

Best,
Ron
Title: the "supplement treadmill"
Post by: Paul Czege on May 13, 2004, 05:29:12 PM
Ryan,

I think the ideal configuration in today's market for an RPG focused publisher who wants to use the 3-Tier system is probably a company with one core book that has evergreen sales, coupled with 3-4 significant releases each year, spaced far enough apart to generate frontlist sales across a significant percentage of the year.

Very interesting.

What do you think of the viability of this alternative: a publisher with a core book with the potential of evergreen sales, and one or a few related supplements (i.e. Amber) who partners with the best indie designers to publish three or four various co-branded games a year (each one in small quantities)...covering costs but taking no profit for himself on these entirely stand-alone games. The advantage to the indie designer is exposure to the retail channel for a game that would otherwise not garner the attention of distributors (and a small profit, of course). Does the publisher's own core book and supplements benefit from this as in your ideal configuration?

Paul
Title: the "supplement treadmill"
Post by: ryand on May 13, 2004, 05:30:29 PM
Quote from: Ron Edwards
Effectively, the distributors have (at certain points) exerted exactly this kind of control over publishers, for example, when they pushed for and received full voting membership status in GAMA. To claim that the subsequent, extreme reduction in the number of new core books over the next five years, and the explosive increase in supplements-per-line is a coincidence, would be very naive, as I see it.

Let me offer an alternate suggestion.

The evolution of the "supplement treadmill" is linked to the fact that as the RPG business matured, publishers discovered the substantial difference in buying patterns between players & game masters - which generated an explosion in the number of different SKUs offered by RPG publishers, and helped introduced the so-called 'front list mentality' that affects the retail channel.

Also consider that prior to the late 1980s, most RPGs were sold as boxed sets.  A handful (like D&D) were sold as books, but D&D had become the exception rather than the rule.  When Palladium started publishing, one of its selling points was that the whole game came in one book, rather than an unwieldly box set that could easily disintegrate or lead to the loss of needed components.  This was a distinct difference with most of its competition, distinct enough that some of the same language survives all the way to the present in some of Palladium's advertising.

Virtually none of the "supplement treadmill" companies publish boxed sets.  They all publish on the corebook/supplement book model.

Consider that the largest percentage of RPG sales pre '90s were through non-game stores.  The "hobby game store" we now know as commonplace was still an unusual exception in the 1980s.  A "hobby store" was a place that sold crafts like macrame, model trains and planes, woodworking materials, etc. and maybe a few RPGs in the back.  The combination of bookstores and comic book stores were the largest venues for sales, then toy stores, followed (for a handful of publishers) with true mass market distribution via outlets like Toys R Us and Spencers.  (I bought my copy of Q1 at the Spencers in Alderwood Mall - the #1 place for AD&D modules when I was a kid looking for content.)

(Note that as the '80s ended, thousands of independent toy stores were driven out of business by consolidation in the form of TRU and KayBee (and then Wal*Mart and Target), and a whole venue of locations once popular sales channels for RPGs vanished due to no fault of the RPG publishers - in many cases taking sales volume with them that was never recovered elsewhere.  Also note that starting in in the early 90s and continuing to today the specialty book store has been under intense competitive pressure from big box stores - pressure that included their own mall based chains which have been substantially reduced in size and scope.  This loss of book stores had a similar effect to the loss of toy stores.)

As the 1980s turned into the 1990s, this is what happened:

1)  Publishers started to make products targeted to game masters and players separately (splat books evolved out of the "Complete XXXX" series of books for AD&D2E, for example).

2)  Boxed sets got more and more expensive to produce as publishers entered into an "arms race" to see who could stuff the most components into each box - meaning that smaller publishers couldn't keep up and had to turn to something else as a way to launch the business, an situation that diverted many into the "core book/supplement book" treadmill.

3)  The "hobby game store" became a viable business model and proliferated, taking market share away from the more traditional outlets and concentrating it into a much more focused, but also much less trafficked venue.  The more hobby game stores there were, the smaller the total number of people seeing each new release became.

Impacts:

The "treadmill" business model gained widespread acceptance.  Virtually any publisher crossing the decade boundary between 89 and 90 was on the treadmill.  Also, costs of production continued to rise - making those boxed sets more and more expensive.  The concentration of customers into the specialty stores was creating a price resistance working against the ability of the publishers to raise prices to keep up with cost inflation - price savvy customers were more able to tell each other (and the retailer) that something was "too expensive" and create a competitive disadvantage to publishers who tried to raise prices.  Total unit volumes started to fall dramatically as the number of active purchasers seeing the products declined as the specialty stores increased marketshare.  As unit volumes declined, the fixed costs of those boxed sets ate up a larger and larger part of the gross margin.

The first overt signs of trouble started in late '92 and early '93.  Sales at most of the major publishers dropped off a cliff.  By estimates we generated at WotC, nearly half the volume of the RPG business was lost before the summer of '93.  The rise of TCGs in '94 didn't help matters, either.  And the TCG bust of '95 killed off a lot of speciality retailers, but the customers they were servicing did not go back to the old mass market outlets - they just stopped buying new products altogether.

(We estimated, at WotC, that between the toy & book store consolidation, and the '95 TCG bust, the number of stores selling RPGs was only 10% of what it had been in 1980 - every one of those lost stores cost our industry some volume, and the combination of all the consolidation was vicious).

The cost inflation got too large to bear even in book product and publishers were forced across the board into raising prices, which started in '98 (partially triggered by the TSR collapse in '96).  A series of $30 hardcovers proved successful, which lead the way to abandoning the boxed set model and its broken cost basis.  Pushing the price envelope of the hardcovers to $40 happened from '99 to '01, and enough companies did it successfully, and no company managed to market "cheaper price" to competitive advantage, which is how we got to the current price model.  I suspect we're going up to $50 now, and that the $50 price point will become the standard price for a 300 page, full color core RPG book by 2006.  There has been no noticiable unit volume decline as a result of these higher prices - demand has proved inelastic so far.

The "supplement treadmill" killed a lot of RPG companies when volume dropped off in '92/'93.  Big names, GDW, Chaosium, FASA, and others failed to survive.  After the dieback, everyone in the business was pretty aware that the "supplement treadmill" was a dead end and something better was needed.  The twin innovations of widespread PDF sales and the D20/OGL project provided a way out of the dead end, and a proliferation of new business models.  Most of the companies still on the "supplement treadmill"  (and those who moved into it out of ignorance) are actively trying to move to a higher margin, "evergreen/big release" model, or are moving down the value chain towards PDF distribution.

Almost none of this was the direct result of distributor agitation (though as I mentioned in my post to Erik Wujeck, the distributors did have an impact on the class of publishers who developed one or two products but not an entire line or a regular frontlist release schedule.)  I think that the move towards $40 core books followed by a chain of expensive supplements was driven by the decrease in total customers, the rise in production costs, and the recognition that the "supplement treadmill" was a dead end.  It is a natural reaction to a market that has consolidated down to the hardest of the hard core, who generally have a large budget for RPG purchases, but who are increasingly picky about how they spend that budget, rather than an orchestrated plan by any tier or group of companies.

Ryan
Title: the "supplement treadmill"
Post by: ryand on May 13, 2004, 05:37:53 PM
Quote from: Paul CzegeRyan,
What do you think of the viability of this alternative: a publisher with a core book with the potential of evergreen sales, and one or a few related supplements (i.e. Amber) who partners with the best indie designers to publish three or four various co-branded games a year (each one in small quantities)...covering costs but taking no profit for himself on these entirely stand-alone games.

I think that the distributors and retailers don't believe in many company brands.  There are some (White Wolf, Mongoose, Green Ronin, Wizards of the Coast), but most other companies live and die by their game brands first.  Stuff from an "off brand" doesn't sell at all well in comparison to the "lead brand".

To make your concept work, I think the Indy designer is better off partnering with a larger company rather than a smaller company (because the small company is more likely to have a "game" brand rather than a "company" brand).

I think that the best way to publish a standalone, one or two book line like "Amber" may be to do so direct - bypassing the logjam of the distribution tier completely.

I do like ( and would probably buy ) the idea of a regularly published "anthology" of Indy RPGs, especially if such an anthology was headed by an editor with excellent credentials (take Johnathan Tweet for example).  Such a product would be an interesting diversion from the normal purchasing routine, and would probably regularly produce a few ideas that got incorporated into larger games.

Downside, of course, is that the contributors to such a work would probably be paid game-industry magazine rates of a few pennies a word, and they wouldn't be developing any "publishing" infrastructure.  Such an "anthology" could become a trap for a certain kind of game/designer.

Ryan
Title: the "supplement treadmill"
Post by: mearls on May 13, 2004, 06:49:02 PM
Quote from: ryand(Note that as the '80s ended, thousands of independent toy stores were driven out of business by consolidation in the form of TRU and KayBee (and then Wal*Mart and Target), and a whole venue of locations once popular sales channels for RPGs vanished due to no fault of the RPG publishers - in many cases taking sales volume with them that was never recovered elsewhere.

But were the venues that went through this period of consolidation truly viable as RPG retailers? From personal experience, a lot of the toy stores around here, including KayBee, placed their RPG on clearance during the mid-80s.

I think this gets back to Ron's contention that early 80s D&D was a fad-driven event, and to some extent I can see that in terms of the retailers that carried it. Was there some other pressure, aside from low sales, that made toy, book, and mass market game stores drop D&D and other RPGs?
Title: the "supplement treadmill"
Post by: Matt Machell on May 13, 2004, 07:14:49 PM
Quote from: ryand
I do like ( and would probably buy ) the idea of a regularly published "anthology" of Indy RPGs, especially if such an anthology was headed by an editor with excellent credentials (take Johnathan Tweet for example).  Such a product would be an interesting diversion from the normal purchasing routine, and would probably regularly produce a few ideas that got incorporated into larger games.

Ryan,

interesting you should mention this concept. Have you heard about the various anthologies being worked on on the Forge? Nopress RPG Anthology, due out for Gen Con, was born of a similar idea.

I know Luke Crane (the editor, abzu on these forums) is looking for somebody well known in the gaming biz to do the foreward...

-Matt
Title: the "supplement treadmill"
Post by: Erick Wujcik on May 19, 2004, 05:59:03 PM
I'm back from Los Angeles, so I'll respond to a couple of points.

First, let me add to the comments about the change in the RPG industry from the early 1980s to the late 1990s:

1. For Palladium, in addition to the stores described above, quite a few sales came through comic book stores. It started when TMNT was a black and white comic with an infrequent schedule, and encouraged quite a few comic sellers to stock other products in the Palladium line.

2. From 1991 to 1998 virtually all the 'mid range' distributors went out of business. Greenfield Hobby, for example, had a salesforce that was excellent at helping stores with re-stock. Those 'mega' distributors who survived, specifically Alliance and Diamond, took on a model that emphasized 'new release catalogs' and de-emphasized keeping steady product in stock for the long-term.

Quote from: ryandThe distribution tier also has a problem with how to sell stuff (as opposed to take orders for) as a business model.  Alliance, for example, regularly solicits for thousands, maybe tens of thousands of SKUs.  They know they have a limited amount of time to talk to any given retailer, and cannot possibly "stock check" even the top 100 SKUs.  So instead they focus on hot, high volume frontlist sales, and expect that a store moving the frontlist will de facto move enough backlist to motivate the store owner to do their own stock checking an restock analysis.  Clearly, in many cases, for many unique products (like Amber) this system is a failure.

100% Correct... and a real warning to anyone interested in starting out small.

Quote from: ryandFor what it's worth, when I was operating RPG International in the early 90's we regularly moved 1 copy of Amber a month, and it was unusual in that it was the only book from a "small publisher" for which we had such repeat sales - unusual enough that I still remember being surprised by it nearly a decade later.  What Amber managed to acheive was pretty amazing.

Thanks!

As I tried to point out to distributors, to no avail, Amber Diceless never lingered on store shelves.

Quote from: LxndrTMNT is definitely not typical, by dint of the TV show alone.  But I think its supplement support was pretty significant for the time period in which is was made.

Again, let me point out that the TV show killed the TMNT role-playing game! The great sales of the TMNT RPG happened before TMNT went mass media, not after.

...but I agree that the supplement support was significant for the time period.

Erick
Title: the "supplement treadmill"
Post by: daMoose_Neo on May 20, 2004, 12:01:22 AM
Quote from: mearlsWas there some other pressure, aside from low sales, that made toy, book, and mass market game stores drop D&D and other RPGs?

Correct me, but wasn't it about the mid-80's there, when the fad-based D&D caught, the whole deal with it being satanic cropped up? I was a wee lad of like 1 when D&D was in its 80's prime with the figures and cartoons and what not.
And, as I've said elsewhere, because D&D is at the forefront of role playing and most gamers minds role-playing itself was possibly considered "satanic"? I remember starting my role-playing group in highschool in 97/98 and getting looks from people and the comments "isn't that satanic?"
Those few incidences did leave quite a mark on the field. I often end up explaining it to people as acting with rules (but in highschool acting simply ment you were gay in the eyes of the jocks) and they still try to connect D&D "satanism" to role-playing as a whole.
Just saying that stigma on D&D did have an effect and probably influanced the clearancing and dropping of titles in the major chains. Look at the backlash Wizards took on a Pokemon card- a japanese symbol was considered offensive and upset A LOT of people quite unreasonably because it resembled a swatstika (I think it was the same general form but still appropriate in the context) and it was never actually released here.