Profit in PDFs?

[Sovem]

Wow, an entire forum for indie rpg publishing! First, lemme say, this is awesome. My wife and I have been trying to get into indie publishing for a long time now; I wish I would have found this sooner.

Now, onto my topic. My wife is convinced that one cannot make a decent profit selling an RPG as a PDF. We're talking compensation for time spent creating the game, reimbursement for any software purchased to create it, time and money spent in advertising, etc. I don't want to know if it's likely, or what quality is necessary... I just want to know if anyone out there has done it, and, if so, if you can give me some numbers or examples. I would appreciate it muchly ^_^


Thanks,
John

[daMoose_Neo]

I'd wonder what she's using for her basis of thought?
Because once you through print into the mix you have:
- Printing costs, obviously
- Proofs unless you want a blind print or REALLY trust your printer
- Shipping to you from the printer, shipping to the customer
- Order processing for the prints, having print copies, etc.

OR, you could go the Lulu route, have them print it all, but you still have a narrow margin of error.
Whereas: I spent about 40 hours on my last book, Big Dumb Heroes, and a $15 subscription to Clip-art.com. The game was released first as a PDF back in May/June. So far, I've had about $50 in sales on the PDF alone, at $8 per. Strictly speaking cost, as I did this in my spare time, we're looking at a $35 profit, before anything else. If we factor in my hours at say $10 an hour, which is low considering all of the positions I filled, the "cost" rockets up to $415, but meh~
Now, with the print edition rolling out for GenCon, it's going to cost me roughly $2.15 for the book to print; no shipping this time because it'll be brought to GenCon by the printer, Lance of Avalon Industries (awesome man). Right now, that puts my cost at about $7.68 per copy, charging $12 per copy.

[daMoose_Neo]

Err...premature post.

Anywho, if you take a look, there is a significantly higher profit per unit possible with PDF than with print typically. You also have the ability to send unlimited review copies out for sites and magazines and whomever else to look over, which is also a cost saver, as you're not spending the money on the book or the shipping to send it out, and you're not wasting money if the review falls through.

[timfire]

As Nate said, you theoretically have a higher profit margin with PDFs, so you can make quite a deal with them. This is especially with cheaper PDFs. Ronin Arts' business model, I believe, is based on selling a large number of cheap (under $10) and short (under 50 page) PDFs.

However, I have encountered the issue that many customers still expect PDFs to be "cheaper" than print books. The PDF of The Mountain Witch is exactly the same price as the print version minus printing fees ($18 vs $24). But I don't seem to get many PDF sales, and I have had a few comment that I should price the PDF lower. So I'm not sure what the market for higher priced PDF is really like.

[Nathan P.]

Hi there John,

Are you wondering about selling PDF only, or both print and PDF versions? Ronin Arts is the flagship all-PDF company. Some of the games here are offered in PDF only (both Trollbabe and Elfs from Ron Edwards, I beleive, among others), and I have no idea how their sales are.

I offer Print and PDF versions of Timestream. As a general trend that I've seen among many publishers, it seems that offering both print and PDF, you will sell less PDFs than print books, but you're selling PDFs to people who probably wouldn't buy the book anyway. HOWEVER, and this depends on your print margins, you can make similar amounts of profit on each version. For the last couple of months, my PDF sales have been about 28% of my total sales, but they've been about 40% of my total profit. So that's a pretty substantial supplement.

There's also the complications of various combination models, like buying the PDF allows you to buy the print version later at a discounted price, and such.

You may also want to check out some of these links:

With Great Power... 2nd Quarter Sales

Conspiracy Of Shadows 2nd Quarter Sales - you need to scroll down to the "Where's Sen(k)owski? entry.

Prime Time Adventures recap - Not hard numbers, but Matt mentions PDF sales.

I hope some of that helps!

[Justin D. Jacobson]

Now, onto my topic. My wife is convinced that one cannot make a decent profit selling an RPG as a PDF. We're talking compensation for time spent creating the game, reimbursement for any software purchased to create it, time and money spent in advertising, etc. I don't want to know if it's likely, or what quality is necessary... I just want to know if anyone out there has done it, and, if so, if you can give me some numbers or examples. I would appreciate it muchly ^_^

Excepting the inherent vagueness of "decent", it's certainly possible to make a profit selling a pdf-only rpg. Although Phil Reed isn't pdf-only (just mostly), he earns a living not just a profit from his endeavors. His example is exceptional, of course, but that's all you were asking for.

[daMoose_Neo]

However, I have encountered the issue that many customers still expect PDFs to be "cheaper" than print books. The PDF of The Mountain Witch is exactly the same price as the print version minus printing fees ($18 vs $24). But I don't seem to get many PDF sales, and I have had a few comment that I should price the PDF lower. So I'm not sure what the market for higher priced PDF is really like.

Actually, this is the similar cost model I'm using on BDH, with a similar result. I've been told folks would have no problem with it as a book at the $12 (which we will see!), but they don't like the $8 PDF price. Personally, its well worth it; better presentation for the screen version (wouldn't do the framework in the PDF in print, bleed costs and all), color to boot, as well as a B&W text, printer friendly version included. If I ever get my bookmarks working in InDesign, I'll have that included as well.

[Darren Hill]

As Nate said, you theoretically have a higher profit margin with PDFs, so you can make quite a deal with them. This is especially with cheaper PDFs. Ronin Arts' business model, I believe, is based on selling a large number of cheap (under $10) and short (under 50 page) PDFs.

However, I have encountered the issue that many customers still expect PDFs to be "cheaper" than print books. The PDF of The Mountain Witch is exactly the same price as the print version minus printing fees ($18 vs $24). But I don't seem to get many PDF sales, and I have had a few comment that I should price the PDF lower. So I'm not sure what the market for higher priced PDF is really like.

I think your calculation fails to take into account that the buyer of a PDF also incurs other costs and maybe usability issues - he has to print it, himself, for example.
PDFs have advantages (for ease of search, etc.) if you use a computer at the gaming table, but those can easily be outweighed by the need to have a physical printout (which will be looser and messier than an actual book) at the table. So IMO PDFs should be a bit cheaper than simply reducing the cost by the price of printing.
Also consider: PDFs are completely risk-free at your end compared to physical printing - you don't have to set aside warehouse- (or cupboard-) space to store copies, you don't have to carefully balance and budget how many you create at one time. Things like this should count towards reducing your PDF price further.
I'm one of those who thinks the Mountain Witch PDF is overpriced, though I bought it. Mind you, I'd have been happier with the price if the physical book had been costed closer to $30.

[Gregor Hutton]

However, I have encountered the issue that many customers still expect PDFs to be "cheaper" than print books. The PDF of The Mountain Witch is exactly the same price as the print version minus printing fees ($18 vs $24). But I don't seem to get many PDF sales, and I have had a few comment that I should price the PDF lower. So I'm not sure what the market for higher priced PDF is really like.

I have noticed this too when speaking to people at conventions. Faced with a print book or a PDF customers feel they will spend more on the print book, i.e. as Tim says the perceived value of the PDF is lower than (Print Price - Printing Cost). I feel this is short changing the PDF a bit, as often the PDFs are richly linked, searchable, more colourful, come in variant print and display formats and are bundled with extras.

[daMoose_Neo]

The buyer does incur other costs, most of which are minimal by comparison once you factor out the cost to print the book.
So, out of curiosity, why the objection? If the book costs $24, and its costing Tim $6 to print it, and he charges you $18 for the PDF, you're still paying $18 for the game. For an added $6, someone else prints and binds it for you.
This really goes toward some of Forges principal ideas on the marketing of games, that we're not selling books but that we're selling GAMES, which happen to come either as PDF or Print. With that logic, a fair price for the product is a base cost for the GAME plus a surfee for the medium through which it is delivered to compensate for the costs involved in putting it into that medium.

So the print is a courtesy fee, if you think about it, kind of like when RadioShack charges through the nose...only, less nose charging here...

[Darren Hill]

This really goes toward some of Forges principal ideas on the marketing of games, that we're not selling books but that we're selling GAMES, which happen to come either as PDF or Print. With that logic, a fair price for the product is a base cost for the GAME plus a surfee for the medium through which it is delivered to compensate for the costs involved in putting it into that medium.

So the print is a courtesy fee, if you think about it, kind of like when RadioShack charges through the nose...only, less nose charging here...

That's one way to look at it, but I doubt it the way the majority of buyers will look at it. If you're point was true, that you were just selling games, there'd be no need to package and present the game in any form beyond the minimum needed to explain the rules. You wouldn't need to spend money on art, for example - beyond that needed for explanatory diagrams.

When you buy the PDF version of a game, you are buying a game.
When you a buy the print version of a game, you a buying a game AND a book.
When you buy a book, you like it to be sturdy, to have good quality paper, and to be attractive. When you buy a PDF and print it out, it usually has none of those features.
So when you sell a game as a printed book, you are adding value to that game beyond the bare price of the printing. (To illustrate, heh - when you pay for artwork, your hoping that the art will increase the value of your product beyond the cost of the artwork.) The same principle applies with, say, DVD and music sales - some people will buy electronic downloads, and others will want a decently packaged case that they can physically hold, keep, to gaze upon admiringly and fondle lovingly. Well, the latter might be an exaggeration, but you get the point I hope.
Those things (plus the cost-savings to the vendor I mentioned above) mean that, to me at least, the price difference between a PDF and the print version should be greater than just the costs of producing the printed version.

[guildofblades]

Thats not a bad logic, but to be fair, you have to factor is things that affect both your costs and the buyer's cost.

How much ink cost will they have to print the product? How much time? How much loss of value is there in a product that's not neatly bound?

Also, simply reducing your per unit print costs is not really a fair example if you are reducing your "real" costs in dealing with print products from your price offered for PDFs. You have shipping costs involved, cost for proofs, damage and lost products in storage, possibly the cost of storage itself or accessory materials to keep your "free" storage options viable (ala, multiple dehumindifiers, a generator to keep your basement dry if power goes out and you have heavy rains), plus don't forget your man hours for handling getting print quotes and then later in recieving and packing your storage space when your shipment arrives.

That says nothing about potential differences in discount structures in different venues.

We have a miniatures game named Grunt Fantasy Miniatures. It began as a little saddle stitch digest print product in 1996 and sold for $5.00. In 1999 it got upgraded to a perfect bound book with a color cover and x5 as many pages in a zip bag with some accessories and sold for $9.95. In 2002 the game line got reinvented and was released with a 2 player boxed set that sold for $29.95.

We sold a LOT of units when it was a basic $5.00 booklet done in black and white. It was the Guild's first product and it gave us enough revenue to grow into other, more professionally done print products (expand out of photo copying, back before POD was really an option). But the distributors and retailers out there complained about its format, so hence the move to a perfect bound color book. Which sold a lot worse, BTW. We figured our total market was rather niche and not so price sensitive and hence the move later to the $29.95 boxed set format, which sold about as many units as the $9.95 2nd edition. But at the end of the day, due to reduced discount (60% off to distributors) and the costs of managing print production, handling and distribution,  our year end NET profits on the line were never stronger than when selling the little $5.00 booklet.

A year and a half ago we recently ditched the last of the print inventory and released the game line purely as a PDF line. In that form the core game originally sold for $1.99 and was later taken to $2.99. Four sourcebooks have been released at $2 and under. For 2005 and its looking like for 2006 the game is making about as much NET profit that it did back in 1996 and 1997 when sold as a $5 print product. Except as a PDF we're able to offer a much enhanced product with a better presentation. And we also do not have to wait until X number of print copies of the core rules or other product have sold to "justify" the writing and printing of another sourcebook. We can just take a few hours here and there and write one when we get the inspiration and want a break from our board game designs and work on our internet games. So absolutely nothing holds the game line back from making even a lot more money, except our priorities on our time.

If PDF game distribution had been a viable selling option back in 1996, our company would have grown both more quickly and with much more stability. Its niche still, so the upper end of the revenue potential is harder to reach because distribution venues are more limited and product by product you gross less, but its a lot easier to pull profits and products are very much "fire and forget". You don't have to worry about stocking, printing, reprinting, packaging and shipping, etc. Except for some after release marketing, you have washed your hands of continued work investment to continue drawing revenue from the product. Thats powerful.

Ryan S. Johnson
Guild of Blades Publishing Group
http://www.guildofblades.com
http://www.1483online.com

[Sovem]

Thanks, Ryan, that was really helpful. If I may ask, how as your advertising strategy changed with the new pdf venue?

[guildofblades]

Well, it used to be that we focussed on three areas of advertising.

1) Internet advertising and promotions.
2) Store shelf presence and in store demos and shelf talkers/display/sinage
3) Convention presence and events.

In the last three years or so we mostly removed ourselves from the convention circuit. That after doing a very hard look at the pros and cons of that presence and we finally came to the conclusion that the benefits we got from conventions with our current product offering were costing us more than they were worse. Don't get me wrong, we usually made a GROSS profit at conventions, covering all our attencence costs and the costs of the products sold, but almost never covered our labor costs. But the biggest was the opportunity costs. Attending the big conventions with a upscale presence requires not only time at the shows, but also travel time, plus planning and preparation time.

Obviously we had to cut store promotions out for an internet downloadable PDF product line.  I mean, we have a few ideas on how we might sell our PDF catalog through stores, but so far its not worth the mighty effort to win the stores over on the idea.

That pretty much leaves internet venues. The core game is priced only at $2.99, so its an impulse buy item so it goes a long way towards selling itself. All the products in the line are cross promoted as well. We have banners running in a few places, but predominately on our own internet game sites. Otherwise we support a discussion list, a couple forums (working on consolidating down to one) and do the usual press releases and such when we have new products to announce. So frankly, nothing overly fancy.

Of course, since the game existed in print for about 9 years, it may very well have a name recognition that goes far beyond the sales it ever actually achieved. And now that people can get the expanded 3rd edition digitally for only $2.99, maybe they are checking it out now when before the print items were more than they wanted to spend. Not really sure if this is a factor or not. Just seems like it could be a little.

Let me also say this. If PDFs were the primary or even one of the primary sources of revenue for our company, our advertising efforts would be a great deal more extensive. But that is somewhat the beauty of PDFs also. If you don't need to keep your focuss on them you don't have to and they can keep making you money.

Ryan S. Johnson
Guild of Blades Publishing Group
http://www.guildofblades.com
http://www.1483online.com