Selling Prices

[coxcomb]

I have been thinking about selling prices lately, particularly because I will be formulating my own later this year.

Abzu's topic about indie game finances brought this to my attention yet again.

I ordered Burning Wheel a few weeks ago, and I was left feeling like Luke had short-changed himself. Two fairly beefy books for $15 was below my expectations. I was expecting to pay at least $20, and would not have balked at $30.

I would have sent Luke a PM, but I thought others might benefit from a wider discussion. Some questions for anyone who has struggled with this before:

1.) Is there a real issue that indie games (even when produced in printed format) must sell for less than corporate games? Do customers expect to pay less?

2.) Do direct-sales-based indie game publishers genreally use the same profit margin they would if they were using the traditional manufacturer + distributor + retailer system? Or is it common to figure the "going rate" for a product of the same type and eke as much profit out of it as you can?

[Luke]

Hi Jay,

I definitely think I am the odd-man-out for most of the indies for sale around the Forge. I quite deliberately priced my game under "what the market can bear". I priced it just high enough to make my money back plus a little extra. The idea being to put what I made back into the game and do it again.

My reason? First, I made my game out of love for the hobby. Period. No intentions of profit ever entered my mind. The only reason I priced it at all was that I came to the realization that i had make some money if I wanted to continue doing what I love.

Second, I produced a fantasy RPG system. How freaking generic is that? I think pricing the game competitively would have hurt my exposure. Why by my unknown quantity when you can buy a known quanity like DnD or Runequest or whatever.

With a lower price point I get a lot more risk takers than I would otherwise. I think that's a good thing. There is a margin of people who bought the game simply because of the price. Those who were willing to pay more still bought the game anyway (at whatever the price). The rest of the "market" was never going to buy the game no matter how cheap or expensive, so I really think I managed to get a little mileage out of the price.

After a year of promoting and selling BW, I agree with Ralph's analysis that the game is traditionally underpriced. I can't put the game into the normal distro-retailer chain and make money. I lose money. But in the non-traditional model of direct sales, I'm doing ok.

-Luke

[coxcomb]

I totally get where your'e coming from, Luke. I am very interested in other people's thoughts as well.

One thing that may or may not apply. A lot of independent computer game "experts" advise that indie designers price their work competitively. The reason: people are accustomed to certain prices. If the price you are charging is less than the expected rate, they begin to wonder what's wrong with your game that it costs less.

Not sure if this carries over to pen & paper RPGs at all.

[Valamir]

Heh...yeah.  It kills me that Universalis at half the thickness of just one of the BW books is priced the same as both of them.  I think expressing my shock at his pricing point was the very first discussion he and I ever had, in fact.

Here's a rough guide to pricing it for distribution.
Take your print costs of the book, double it.   That's the price you need to receive in order to be able to break even after selling 1/2 your print run.

Divide that by 0.4 which is all you get off of cover in traditional distribution.  So if your cost per book is $3, you price it at $15.  That way when you sell it to distributors and get $6 you break even at half your inventory.  Of course all of your other expenses come out of the profits from the other half, so you still aren't making much.

You can see why Mongoose's Conan was priced at $50.

But if you do most of your sales at a 0.5 cut direct to retailers, a 0.6 cut through RPGMall, or a 100% cut direct to consumers, you wind up ahead of the game.  

If you price it like Luke did to modestly break even on the direct to consumers route, getting into stores becomes a net loss to you.


BIG CAVEAT:  Your production values have to be up to snuff.  That doesn't mean you have to put out a Mongoose extravaganza, but it has to be quality solid work that people are going to respect.  If not...if the art and layout is...modest shall we say, then you're better off selling by PDF where you can put a much lower price tag on it and still make money.

[Luke]

ok, Ralph, for the sake of argument (and illumination) what should BW retail at?

The set cost 5.5k at the printers. (Not including art and editing).

I think since we have all seen my books this could be a good exercise.
-L

[Luke]

I totally get where your'e coming from, Luke. I am very interested in other people's thoughts as well.

One thing that may or may not apply. A lot of independent computer game "experts" advise that indie designers price their work competitively. The reason: people are accustomed to certain prices. If the price you are charging is less than the expected rate, they begin to wonder what's wrong with your game that it costs less.

Not sure if this carries over to pen & paper RPGs at all.

Yep, I've heard this too. And people have definitely given me funny looks when I tell them how much the game retails for. But when they actually see the game, their doubts are assuaged.

-L

[Valamir]

ok, Ralph, for the sake of argument (and illumination) what should BW retail at?

The set cost 5.5k at the printers. (Not including art and editing).

I think since we have all seen my books this could be a good exercise.
-L

Just looking at them, I'd say $25 easy.  But if you mean by my formulae, I'd have to know how many units that was.


edited to add:
BTW: I'm not knocking Luke's pricing decision.  After I got over my initial shock and horror ;-) its a valid strategy.  WotC did the same thing with their ridiculoulsy low priced 3E core books.  Priced exceptionally low to overcome the hurdle at people being horrified at a new version of their favorite game...priced low enough to get them to be willing to try it.  And then later the price returned to more normal levels.

[Ron Edwards]

Hello,

Run, don't walk, to check out these threads and various links within them:

An exercise in vanity? (mildly communist)
Successful RPG line
Channel conflict with distribution-retailers-manufacturers
Price setting in the gaming world and its spawn-thread 24.95 vs. 25 (price continuation)
Raping the public

Make sure to note the dates - some of them are pretty old, and some of the views expressed may have changed, or some of the conditions referred to may have changed.

Best,
Ron

[Valamir]

An interesting read down memory lane.

I find it notable that in early 2002 I said:

If the RPG prices were $35-$50 then thats what RPG players would pay

Fast forward to 2004:

What is the standard price for a Mongoose hardcover d20 supplement...$35.

What is the standard price for a Mongoose hardcover d20 core book...$50.

Thank you folks, I'll be here all week...try the veal, and please remember to tip the waitstaff ;-)