A .PDF query

[Clay]

All of these complex economic and pseudo-economic arguments are missing the point entirely. The only issue that really matters when pricing an item is "What will the market bear?"  There is no correct price for any item, whether it be electronic or physical. The balancing issues are:

1. Getting the price high enough for perceived value

2. Keeping the price below the upper bounds of your audience's tolerances.

How much the product cost you to produce doesn't really play a factor in setting a price that will sell.  The customer doesn't know and doesn't care.  Selling the product to them only requires that price and perceived value are in accord.  

Putting this concept into practice isn't easy. I know a fellow who has made millions trying to get companies to grasp this concept and put it into practice. General Motors is currently spending millions (a good deal of which is being paid to the fellow I know) trying to adapt their business practices to this reality (they have to, because Toyota and Ford already have, and a serious shakeup in the auto industry is in the works if GM doesn't get on the stick).

[Matt Gwinn]

I don't think the local hobby stores have anything to worry about.  PDFs will never replace print books for one simple reason - Piracy.  Why would anyone pay for a PDF of D&D 3E if their good buddy can print one out for him, or simply email him the PDF?  

Current PDF games can get away with it because their market is small.  Most PDF games don't have the marketing capital behind them to sell 1000 or 10,000 copies.  If each person that buys a PDF makes a copy for 2 friends, the loss to the game designer can be recooped by adding a couple bucks to the price.  A mass market game put out by WOTC or White Wolf that sells 10,000 copies can not recoop the cost of 20,000 lost sales by raising the price of their game a couple bucks.  And the more marketing a game has the more players it will likely have and the more people who will desire a copy.  Thus, that 2 pirated copies per person suddenly turns to 4 or 5.  If you doubt me, take a look at your gaming circle and ask, how many of them own a copy of a D&D players handbook?  Now pick any small market game you've played and ask how many own that book?  See what I mean?

If D&D was available only in PDF I guarantee one person per gaming circle would buy a copy and then give copies to the rest of the circle.  At best, they may share the cost of the single purchase.

Therefore, even if you disregard teh intellectual value of a game, a PDF game requires a publisher to charge more than the cost of materials.  This is also very common in the music/film industry if you need another example.  A CD costs a few pennies to mass produce, but a CD or DVD will cost you $16 to $30 due to of piracy (or at least that's what the record companies claim).

,Matt Gwinn

[Bailey]

I hate to say it but within a week of D&D 3e's release the bookwarzes sites were flooded with pdfs of it.

[Michael Hopcroft]

I'm thinking my case might be illustrative. In a week I'll have a 128-page e- book that is produsely illustarted (and that doesn;t count the color cover). I was told I was only lilkely to sell 200 copies total. Of course, this will be the same content as my print book, down to illustrations, but you'll have to print it yourself.

You can find a sample chapter on my website, but the sample is much bigger than the same chapter in the actual e-boiok is likely to be (according to my typesetter).

The question: How much do I charge? My etailers get 20% of my take, including the guy who'll be running my direct sales. If I set the price at $10 I get $8 to pay my royalties and build my capital. If I set it to $12 I get more -- but do I drive away sales? The same nbook in printed form will sell for $19.95.;

Which is better from the standpoint of the experienced marketed\r? Will people pay $12 for a e-book of this size?

[Bailey]

I'd go for a rounder number.  If you are going to be over 10 then you are going to be over ten.  12 is not a very magic number.  You may as well charge 15.

[Valamir]

Well, my view on pricing can be found elsewhere.  I won't repeat that stuff here, but I will add this.

What would YOU be willing to pay.  If you saw the teaser chapter for the first time, would its content and illustration get you fired up to pay $15...or is it...ho humm...well if it were $5 I might check it out...

Now I know, your going to say "but I'm biased".  Of course you are.  But if YOU who know and love the game aren't willing to say its worth $15 than its unlikely anyone else is going to think it is.

Note:  I'm just picking $15 as a number, my point is simply this...don't sell yourself short.   For niche markets like indie RPGs there are only so many potential buyers out there anyway.  Reducing the price isn't going to suddenly attract hordes of outside interest.

If you think its great work...than price it like its great work...the catch is...it better actually be.

[Seth L. Blumberg]

I'd go for a rounder number.  If you are going to be over 10 then you are going to be over ten.  12 is not a very magic number.  You may as well charge 15.

Magic numbers are overrated. There are plenty of things (including some games) that I'd buy willingly for $12 but hesitate over or refuse for $15.

[Eugene Zee]

All,

Sorry to jump in late.

I have to go with Clinton on this point.  The market size for computer games is very much larger than the market for hobby adventure games.  Actually its probably more than ten times the size for more popularly targeted c-games.  In addition, the production costs of viable computer games are high, much of the time a successful computer game has even had custom software designed for it.
Now to add in marketing and advertising (which can reach seven figures for many popular games) and tech support staff and you can see that the model is completely different.  So when you see computer game costs you can be pretty sure that the retail price reflects a very small margin of profit for the company per piece.

Our business is primarily a grass roots business with a sprinkling of larger appeal.  The pricing of most books in the industry is based on a simple equation,

[Production Cost (writers, artists, printing, etc) x2] to get the price that a distributor gets the book at (40% of the retail).  

Not everybody uses this equation, some people add more or less to it but it is pretty generic.

If you were to raise the bar of prices of the products in the market it would probably hurt the marketplace overall in the short and medium range.  That is not to say that a book with a higher production cost (that reflects itself in the quality of the book) shouldn't charge more.  The amount of spending in the market does not necessarily expand because you raise prices.  So what you might get is the same people buying fewer books and more risk per publisher, except for the Big Four.

Eugene Zee

[Eugene Zee]

All,

Forgot the part about the PDf.  When you are selling a PDF you have less constraints.  Forget about how great the game is when you are setting a price.  Save that for actually promoting your game and you will see increased sales if you are able to communicate that better quality.   Game quality will make more money within the sales process because it is less objective.
Instead use an objective fomula based on production quality to determine the price.
Here is a suggestion,
(X cents per word + cost of artwork) / possible number of books sold
In addition you should probably keep it between $5 and $15 unless it has some specific exceptional facet to it.

[Matt Gwinn]

When I priced Kayfabe I based it on the following:

$125 for art
$100 for ability to sell at Gencon
$180 to print 50 copies

That averages $8.10 a copy, so I priced kayfabe at a nice round $7.95.  I figured I could make up the difference in PDF sales (which I have done).

Not the best formula for calculating a price, but it's a fair price in my opinion.

,Matt G.