New Publishing & Revenue Model

[guildofblades]

Hi All,

In my time in the hobby game industry I have always paid close attention to all things business related and always tried to examine each unique business model or unique aspects of the primary business model, seeking to understand the economics of the industry as best I could.

Hmm. Well, I rather do that with every business model I see, regardless what industry I guess. But among my various interests are also seeing how "different" business models work in other industries and then examine them to see if they could somehow be applied to gaming as well. That all being said, I am come to an epiphany of sorts and thought I would share it.

___As businesses....the audiences game publishers generate as dedicated and casual consumers (or even just players), in business terms, are worth a great deal more than the products we sell to them___

And that sort of makes sense when you consider how much AOL had paid to buy Netscape back in the day and more recently how much Google just paid to buy YouTube.  Both of those companies more or less didn't sell anything and instead offered free services to users. But by the simple fact that they had brought together a rather large number of users, they became worth a lot of value. We see this in other areas too, including some of hobby gaming's leading brands. Look at the revenue that Hasbro makes off D&D that is not based on D&D books. Half of WOTC's revenue for D&D has traditionally come from their fiction novels. They had license numerous computer games prior to Hasbro's wholesale butchery of those IP rights, licenses comics, game worlds, movies and other things. In comics, Marvel Entertainment makes immensely more money from licensing and other products than they do from the comics themselves.

So why is it that 99.9% of hobby game companies only seek to generate revenues from the actual sale of its game products? (yes, yes, I know most companies will say thy are willing to do licenses, but very rarely are those "built into" the primary business plan).

I've been pondering this topic for a while as my own companies has begun to make revenues from other sources rather than simply selling our printed game or PDF downloads. We're now earning revenues from advertising sales on our MMO game sites and membership fees and scored a few minor licenses. And the more we delve into these areas the more revenue potential I see. Then I look back at our own print game lines and see four of our 5 currently supported product lines just not contributing anywhere near as much to our bottom line as we think they ought to.

For example: Our Button Wars spaceship combat game.

In 2006 we sold approximately 200 starter units direct (msrp $6.95 = ~ $1,390) about 30 at wholesale (most at a 60% discount = ~ $83) and maybe 10 or so units via our drop ship program (20% discount = ~ $55). So the core 2 players starter earned about $1525. Also for sale in that game line are a Button Pack Display Box #1 which contains 8 different ship packs at $5.95. The vast majority of those sold were sold as full packs with about 80 sold direct (msrp $47.60 = ~ $3808) and maybe 20 or sold via wholesale (60% discount = ~ $380) and a handful sold via drop ship, so let's say maybe another $76. We also have 3 other ship packs for another faction that we've been selling separately. of those maybe 70 each (average) sold direct for a total of $1075 and maybe 10 each at wholesale for another $60. Lastly, toss in about $140 in PDF revenues. Thats adds up to a grand total around $7,060.

Ok, thats a tad bit over 3.5% of the Guild's gross for 2006, judging from what I have seen of the books lately (still waiting on final year end accounting for taxes and all that fun stuff). While its not revenue I want to see go away, if I don't find a way to dramatically improve Button Wars bottom line it going to be slipping to below 1% of our total gross. At that point one has to wonder if, as a company, we wouldn't be better off just axing the line completely and staying a bit more focussed on our core money makers. That's what the business man in me is thinking. The gamer in me naturally wants to find to make this game line thrive and become.

So that brings me back to my thinking of alternative business models that can be applied to this game line and possibly any other game line that we determine is just not holding up to muster. Now, the success of a game line is also a relative thing. back in 1997 I would have been extremely happy for one of my secondary lines to gross $7,000, but as companies grow their demands change. But should the availability and support of game lines suffer for that? Pragmatically you would have to think yes, but surely the vast majority of us publishers also do this for love of the games we publish, and that part of us screams no.....we need to find a way to support these games further so they don't become orphans.  So let's examine the business models employed by small publishers today...

1) Core + Supplement treadmill. The most common model and one most used by the mid to larger companies. Get one successful core rule set then pump out any many splat books, world books, source books, adventures and accessories you can profitably before the line invariably implodes. The Guild gave up on this business model years ago. Not healthy for the long term of our company, not healthy for our retailers and since it almost always causes the line to implode, it fails the consumers as well ultimately.

2) Indie approach. Pour all the heart and love into one core game. Occasionally bring out some add on material but the focus remains centered at the core game. Done successfully this can generate a solid fan base and it seems sustainable for the long haul, but the high end revenue cap remains limited due to a limit the total number of products available to sell. And revenues remain tied to physical (or PDF sales only).

3) Ransom Model. A way to guarantee some income for a project and hence any project actually printed or release should be profitable, but I have yet to see enough momentum in the model anywhere to suggest it can support a robust business model and steady revenue stream.

4) Subscription Model. This one is interesting, but I am not sure it is supportable at a larger scale. I see several problems. One, it ties you into a set production cycle and set pricing on products you have not yet released yet. Failure to release products on a given schedule or at pre selected price points can earn you some ill will with your consumers. Further, if you support multiple product lines you either have to support different subscriptions so as to not be mixing them or you are artificially limiting your sales to just those consumers who want it all. While the Guild does have valued customers who do buy darn near everything we do, they sure aren't anywhere large enough in numbers to support our current revenue base. We need to have the flexibility and strength to market individual titles at their respective niche audiences. Lastly, taking money up front for products not yet printed and possibly not even yet fully designed brings about an issue of liability and accounting that could be problematic if done large scale.

So that finally brings me to the point of my post. I've been eye balling a new path and its one I think we're going to apply to our Dark Realms RPG (actually our old Worlds of Heroes & Tyrants Customizable RPG, but we're keeping the WHAT mechanics and the Dark Realms name. lol.). The primary thrust behind this idea is to GIVE IT AWAY. I think we can make a goodly bit more money this way. I'll explain.

Netscape and YouTube have shown the power of numbers. That was their value. It simply took other companies with more established relationships in the ad business to monetize them. Now, in this day, monetizing ad inventory isn't that hard. There are numerous agencies you can sell remnant inventory too. And once you build up enough total inventory, you can develop your own team of ad sales people or site partners to help you sell it. Generally speaking you can get at least $.20CPM (20 cents per thousand ads shown) on remnant inventory and up to $2.00 on primary inventory sold through your own in house staff. A web page designed to incorporate advertising into it can easily support 2 to 3 adverts.

One reason we are considering this is that back in 2002 we had discontinued the first edition of the WHAT RPG line and were planning for 2nd edition. As part of that planning we seeded a number of game download sites with a 15 page introductory edition of the game, which was basically 1st edition prettied up a bit. Fully playable in those 15 pages. Since that time we have seen more than 1.2 million downloads of that PDF and in spite of the WHAT RPG 2nd edition having not yet been printed and the game line being out of print since 2002, its web page remains our 2nd most visited game page BY FAR, 2nd only to our Empires of History board game line. So we got to thinking, what if we put not just the introductory content online, but what if we put the entire 2nd edition online on PHP/HTML page? Made indexed and searchable? That could be 50-150 web pages. But what if we did not stop there? What if we put the whole world setting online too, with all the maps, NPC characters, short fiction, and the whole nine yards. Online we don't have printing costs and if not compiled into themed PDF, we don't even have to hold up event he smallest of new content. The moment it gets created it can go live online. Have an idea for some pages that detail a corner tavern and its staff and regular patrons to flush out the name of some tavern you put on some city map somewhere on your world. Up goes 2-10 web pages with that content. The level of "world" setting detail we could put online would virtually be unlimited.

I do wonder that if we had robust game rules and a mass of world setting info online already how many pages would have been viewed by the 1.2 million people to download the intro RPG? Each week several thousand people still visit that page even though its content is extremely limited and hasn't been updated in 5 years. By my estimates once a goodly chunk of this content has been placed online a single user might view 500-100 total web pages during the course of a month easy. So that could translate into 2,000 ads to sell. Yep, thats still only $.40 to $4.00 for that one user. But if the content is rich enough and we continue to pull in several thousand eyeballs due to giving away the intro core rules that could translate into $800 to $8,000 monthly. And that is just the beginning. Toss in some community discussion boards for the game (also with advertising one them) and the simple fact of having a well supported game with grow that user base. I figure we'll still bundle key core rules and rules source materials by topic and make the PDFs available for sale. This will make that content available in a printable format for users which some number will want. For printed support we'll likely make a full 2nd edition box set available for sale which can be sold online and through retail stores. And probably a campaign box set for the first world that we begin building online, though the amount of world info online would dwarf what we can print and put into a box, so the box would serve mostly as world overview and marketing teaser for the online content. And once we have this infrastructure of content all online we might revive one of our plans to print up a million copies of the introductory rules and give them away.

All in all, we would have a line of mostly online content mixed with a number of core PDFs for sale and a very very limited number of print titles. Because the print titles would all be core content the wealth of online material should actually drive print sales both online and in stores reasonable well. The bulk of the revenues would be derived from the online advertising and a secondary revenue source would be the PDF sales. But since ALL the game rules are free the barrier to entry for anyone wanting to get into this RPG should be nill. Just internet access is required.

Looking at secondary print lines that only have revenues in the less than $10K range I see this as a potential viable business model for those lines. Or at least some of them. I would basically be shifting staff labor from print layout, printing, binding and assembly and mail order over to more content creation and slapping material up on pre generated contented web pages, so in terms of labor investment, thats probably a wash. To make the revenues our print costs will go down and is replaced by bandwidth costs but bandwidth costs are really cheap these days. I will have lowered the bar for entry into the game to having internet access only and have the potential to drive revenues to x2 to x10 what the print only line could achieve based on our current distribution methods and place in the market. So I'm not really seeing the downside here and am thinking FREE might just be better fiscally for both us and the consumers...

So...what am I missing? Is there something I didn't factor?

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

[pells]

Hi Ryan,

These topic interests me a lot, and I don't pretend to be an expert, but I'll make some comments.
But, first, a note :
- I'm working as a project manager for a cell phone company. This field is somehow related to subscription and service (once the network is in place, the major costs are down and you sell services, or at least, not materialised product).
- My own indie rpg project is based on subscription.

And that sort of makes sense when you consider how much AOL had paid to buy Netscape back in the day and more recently how much Google just paid to buy YouTube.  Both of those companies more or less didn't sell anything and instead offered free services to users.

The most important thing here is service, be it free or not. And if they got a lot of customers, it is because they deliver a value added service.

4) Subscription Model.

What you're describing is a subscription model that would be like subscription to a "monthly magasine" (which is still materialised). But there are subscription models that are based on delivering a service. And this is not the same !!!

Let's take a look around what is done outside of rpg. Here's two examples :
Ogame : a free online game (they deliver a service). Quite simple, but they manage to build up a BIG community in various languages. How do they generate incomes ? By advertisment. But, you can subscribe for a monthly fee and get : no ad anymore, some new functions (which are mostly for navigating purposes). Note that there is a whole line of products that look like this game. For some, when you subscribe, you can get access to some races or weapons ...
myspace (but I'm not sure it is that site) : then again, they deliver a service. How do they generate incomes ? By advertisment. But, you can subscribe and get more disk spaces, for instance ... Hotmail did that at one point ...

What I'm saying about this model is : you offer a service for free, get a community as to generate ads revenue and then offer layers of services, for which you ask a monthly fee. Even if it's a minority who pays for the extra services, it is with them, I believe, you make the "real" income.
And, somehow, the same thing goes for the cell phones : you can buy a subscription quite cheap for a minimum of services, but you can buy "bundles" for other usages (data, sms, mms, email, web/wap, downloading logos). And it is with those people who buy the extra service you can make the real money ... And speaking of free and ads, I even saw a cell phone company who offer very cheap basic subscription, but each time you consult your vocal messages, you hear an ad before.

Following me ?

So I'm not really seeing the downside here and am thinking FREE might just be better fiscally for both us and the consumers...
So...what am I missing? Is there something I didn't factor?

I don't say your model is not good ; I'm saying it could be better. In fact, I just don't see the service you would provide. Finally, it is mostly "static" web pages (which you can browse any way you want, which is at least something), but it is no really more than a book. And that said, at first, maybe you don't really need a service, but you should keep it in mind. How about adding layers of service ?
For a small monthly fee, people could (let's say), manage their campaing on the website, interact with their players, play online ...and no ads.

For instance, in my project, I'll be selling the pdf version. But with each pdf sold, a three (let's say) months subscription will be offered to the website. The idea is that what I'm really selling is more than a campaign, it is a service.

[Clyde L. Rhoer]

Hi Ryan,

I want to see if I'm understanding. Instead of killing trees to make a game, or trying to sell an electronic version, you basically are considering putting it up online as HTML pages with ad's and making money on the ad's? I think it sound's like an intriguing idea.

Some points to consider. I'm not sure how good a model Netscape is. Netscape seemed to really end up being weight for AOL after they purchased it, but perhaps I'm unaware of how they made money off it. I know I stopped using it before then as Netscape got bloated and slower well before the sale to AOL, so I wasn't using it anymore.

YouTube seems a better model, but as far as I know-- to date has not made enough money to offset their bandwidth costs. I don't doubt they will make enough money to cover their bandwidth costs, but it's not absolutely clear they will be successful. The success or failure in their Ad system will be if they can create targeted ad's as well as Google does for search. The quality of the targeting of Ad's will also be the major place your idea will succeed or fail if you are correct in your about the traffic you will receive.

I also think the strength of YouTube is user generated content mixed with what some folks call piracy and others call sharing. Your model will be much stronger, I think, if you leverage your users creativity, find some way to reward them, and keep their creations in your online system. You need to be careful in this reward process not to encounter the Ultima Online problem. Ultima Online had a reward program set up for what they called guides, that would let the guides play for free in return for so much volunteer time answering questions and helping new players.  The top reward for 14 volunteers was a thank you of $500 bucks a month. Those top volunteers were putting in like 40+ hours a week of volunteer time. UO ended up being hit with a class action lawsuit for minimum wage violations because of the program. Apparently even the low level guides who got free play for volunteering were able to use that reward to claim it was a monetary payment. This is why in the MMORPG world today volunteer programs are typically sad, because there is no reward given to the volunteers for their free time. Not a lot of people want to pay money to volunteer.

I did some searching and found WHAT Introductory Edition. I'm hoping this is the page in question. My first thought is that likely it would need to be prettified up a bit, with shorter pages. The banner ads centered in the page are tolerable to me, but the boxed ads that appear to the right or left of the page really uglify the place up. As far as the traffic you are getting have you already factored out bot's, or are you just talking raw hits? Do you know much time people are actually spending on the page? How many return to the page?

I also wonder how this model will help me at the table? I don't have a laptop, and I don't really like the blockage one creates between a games participants. It's sort of like a GM screen, and I play with the dice rolled in front of everyone. If it's easy for me to print out and use at the table, then does that cut down on my return trips, and your ad revenue?

[guildofblades]

>>And that said, at first, maybe you don't really need a service, but you should keep it in mind. How about adding layers of service ?<<

Well, once we got a decent chunk of game rules and world content up in static PHP pages I was thinking we could add some interactive tools. Using PHP and a database it wouldn't be too difficult to offer:

Random NPC Generation
Online Character Portfolio and archiving
Random city generation
Random Encounter Generation

For the random NPC, City and Encounters I would think the game master would need to input a couple basic values to give them power levels and scope (large city, town, hamlet....) and the random generator could do the rest. These tools and others we can think of later might be reserved to people who buy an annual subscription.

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

[guildofblades]

Hi Clyde,

>>I want to see if I'm understanding. Instead of killing trees to make a game, or trying to sell an electronic version, you basically are considering putting it up online as HTML pages with ad's and making money on the ad's? I think it sound's like an intriguing idea.<<

Yes, basically. It mirrors the primary revenue model for a couple MMO turn based strategy computer games we are now running. Check out http://www.1483online.com to get an idea. Though a few dead trees will still come into play since we'll still publish a core box set with two or three saddle stitch booklets, character sheets, dice and world maps. Might publish a couple other key sourcebooks also. But EVERYTHING we publish in print and/or in PDF would also be available online for free in HTML/PHP format.

>>I'm not sure how good a model Netscape is.<<

The Netscape case was a little different. The biggest reason cited by AOL for buying Netscape was Netscape had accumulated very detailed user and demographic data on a very large number of people both through its browser and through its Word Perfect brands. It was that user data (the absolute best compiled data available on the internet at that time) that was the core of what AOL wanted, not Netscape browser tech. But yeah, in regards to usage of that browser tech, AOL really screwed up by not using more of it as it was an improving upon it rather just just taking a few of its key features and otherwise plugging them into AOL's existing bad browser. That poor decision cost them a lot of users and ultimately led to them seeking a quick fix which became the licensing of IE instead.

Regarding YouTube, yeah, they haven't made money yet. However...that did not stop them from being purchased for $4 Billion dollars. That was the value of their audience. Google's reach with advertising can probably make good value out of that audience. The value in Marvel's audience is the metric truck load of money they make on film licensing. The difference between YouTube and Marvel is YouTube doesn't really have an Intellectual Property, only a service. Comic publishing is a also "service" because the bulk of money made on Marvel and DC comics comes from the advertising pages sold within. But Marvel and DC also have intellectual property that they can license into movies, video games and more. An RPG system for the most part is not much of a IP. A world setting with rich culture, history, and character on the other hand makes for a great IP. But any IP at its core is only really worth anything if it can accumulate a strong core audience for it. Without that its next to impossible to generate revenues from licensing for it.

>>I also think the strength of YouTube is user generated content mixed with what some folks call piracy and others call sharing. Your model will be much stronger, I think, if you leverage your users creativity, find some way to reward them, and keep their creations in your online system.<<

Once we have the core of the world setting up I think we might open it up a bit and accept user created submissions for more detailed content. So if a user wanted to detail a thieves guild or the corner bar or whatever, we would accept those submissions and consider their use. I doubt we would implement much of a reward system excepting maybe after so many "pages" of content submitted and accepted for publishing we might give them a free year's subscription to the more advanced user tools. But that would be it. Plus publishing credits and an option for links to their website and/or e-mail.

>>I did some searching and found WHAT Introductory Edition. <<

That was a one page HTML file of the 15 page PDF that we had been giving away to the tune of over 1.2 million downloads. That was put up in 2001 -2002 and nothing else was ever done with it. As we begin the work to pursue this new model everything will change. We'll developed a new site template to hold the content and yes, pages will be shorter and adverts for the most part will be contained within the template and not embedded into the main content (except for a few of the more squarish type ads). So don't judge the concept based on 5-6 year old content. What is up there now was never designed with this concept in mind.

>>As far as the traffic you are getting have you already factored out bot's, or are you just talking raw hits? Do you know much time people are actually spending on the page? How many return to the page?<<

Of the several thousand unique hits that page gets a month right now my guess is at most 5% or so are bots. Though 10% wouldn't be out of the realm of possibility. I would not image many people spend much time on the page presently or come back because there is no new content there. We still would have to put all the content online. I can tell you that for our game 1483 Online the average user is generating a bit over 815 page views (around 4,000 ads) monthly. Now that is a different animal because those players come back to submit new game turns every day or two and sometimes for multiple games. But the number of unique pages is much, much smaller than what would be available for the online RPG, which once we really get rolling will have thousands of pages of content between the core rules, supplemental rules and the evolving content for the world setting/s. That can give me a ballpark idea of what sort of page volume we might see from the average user for the RPG. I think getting them to come back will be as simple as letting users sign up to an update list where every few days we'll make an announcement detailing what new content was put up online. That should get a fairly steady stream of repeat visits.

>>I also wonder how this model will help me at the table? I don't have a laptop, and I don't really like the blockage one creates between a games participants. It's sort of like a GM screen, and I play with the dice rolled in front of everyone. If it's easy for me to print out and use at the table, then does that cut down on my return trips, and your ad revenue?<<

Yes, if it was easy to download and view for free then that would definately cut down on the online page viewing, which is how we make the bulk of the money on this one. So basically we would make the Intro PDF still available for free in PDF format because we want to make initial entry into the game system easy. The advanced core rules would be up in HTML format but then also for sale in a printed box set and for sale as a downloadable PDF. World setting content would all be online (everything would be online) and some of the more interested stuff we might also make available as for sale PDFs. So players have access to all the material free online, but the draw back is access to that material in a completely free format exists only on ad supported HTML pages. For access to material in a non html, easily printed formated, generally they will have to buy a print or PDF product. Not everything would be released as such either as details on some building and such for a given city just won't warrant selling, but are probably still worth putting online to make the online offering more complete.

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

[Clyde L. Rhoer]

Hi Ryan,

Thanks. I think I understand much better now. I'm no economics major, but the clarification makes it sound like a much stronger model. A few points.... A reward for many people for user generated content seems to be simply credit. For instance I make a cool inn with map and such. I might submit that if the process wasn't intimidating, i.e. there wasn't a centralized authority who may or may not find my submission worthy. Fear of rejection is a strong de-motivator. I also might find it very rewarding if you were able to create a culture that expresses thanks for good submissions. People will do a lot for praise. Perhaps a simple send the creator a thank you button?

So in your model are you saying that part of the goal is the collection of data? I'm curious because that's the reason you give for the Netscape purchase. I didn't realize that Netscape was collecting interesting data.

What prevents me from saving your pages locally and making a perl script to extract the text and keep the formating? Is this something you've considered and just see as being low risk? I think something like that might happen but most users would likely use your internet version if they like the game to support you.

[guildofblades]

>>A reward for many people for user generated content seems to be simply credit.<<

Oh I agree. For a small or basic submission thats all we really could do. Give the creator credits on the page or pages their content was shown on. Give them the choice of showing their name, e-mail address and/or web page. Or as you suggest, in lieu of that, maybe just a name and/or send comment button that kept the user's e-mail private. Probably leave it up to user which way they want their publishing credits. But for mega contributors we could have a site content contributor rating level or something and maybe that would show in the forums also. Could get people actually competing to make submissions.

>> For instance I make a cool inn with map and such. I might submit that if the process wasn't intimidating, i.e. there wasn't a centralized authority who may or may not find my submission worthy. Fear of rejection is a strong de-motivator.<<

Well, for official content we would have to skim review material before publishing. I can tell you from publishing for over a decade you will get ALL KINDS of crazy submissions. Heck, I still get all kinds of crazy submissions and proposals and our "about company" page specifically says we're not taking submissions. A recent one was someone enthusiastically trying to pitch at us a collectible card game concept of two wizards battling it out with spells and monsters....sound familiar? lol. yeah, gotta have a review process. Even if content was good it might be for something that we have in development in house already and be contrary to the direction we wanted to take things.

I figure if this things gets popular enough we can always extend official licenses for fans to create fan created worlds and settings that are not officially affiliated with our official content. Make that license like the open game license and it would give us the option of seeing something we like and yes, indeed, bringing it into the fold and making it official. For licensed good probably the other stipulation would be the licensee (for free content creation licenses anyway) would have to publish that content using the same site template as our site and one of the banners on that page would still be showing our ads as opposed to theirs. The others would be theirs to do whatever they wanted. So a means to make money on small licensees would be to incrementally increase the amount of advertising we would have available to sell. The licensee would have to publish everything online for free the same way we are doing, but could then sell the content in PDFs the same way we do and could make money on those PDF sales.

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

[JoystickJunkies]

Well done Ryan it's good to get a discussion going like this. I've not had time to read every reply in detail but by comments are as follows;

Value is created in communities in;
- user generated content - from videos to profile pages
- quantity of users and their loyalty to the site (time spent in the community each day or week)

I agree with what's been said about offering players layers of services that give them really good tools and I also think it's worthwhile encouraging people to post their campaigns, characters and other content within the community for all to use.

The concept of a free pamphlet giveaway is excellent too when you consider the kinds of places it could be given out in - ie not gaming stores!! I feel there is a great deal of scope here for a truly unique new approach to the concept of launching an rpg, perhaps even you might just sell a players kit, which includes handy references and other materials to download or in hard copy format.

Of course the danger is, the closer you get the world of online rpg's and using the technology to interact with the world, the closer you get to a player thinking, 'hold on, why don't i just play world of warcraft?'

I think the really strength of rpg's is in being able to sit around a table and play a game face to face using some high quality playing pieces/components -really tangible play and tools. As soon as you stray too far from that I feel you risk losing people to the far more sophisticated online games.

On a final note I echo someone else in saying beware of the ad serving model - you need some seriously sophisticated back end systems to guarantee your providing the right advertising to the right consumers. That's if you want to get the most advertising revenue that is.

Good luck, I'm sure I and many others would really love to hear how you get on and make contributions where and however we can - if you can make it work it bodes very well for many other small publishers who cannot afford the initial print cost outlay but have stunning worlds for people to explore just waiting to be invoked.

[David Artman]

Sounds to me like it should work--I hope it does, as this is basically my model for GLASS distribution (plus a tweak or two).

I will give away shotGLASS--which is just the core rules--so that players can print out a rulebook for themselves to use in play. BUT, I will also have two other revenue channels:
1) The full GLASS book, complete with art, tons of examples and pre-created Abilities, GM advice, and twelve ready-to-run genre write-ups. This is the book a "GM" would want to have, to be able to run their own game.
2) The GLASS House--an online community where GMs can register their games and players' characters, for a small fee (I am thinking $1 per month per  20 or 30 players). This community will make money off of access (the fee above), off of advertising (if you are not registered), and off of a small commission for selling source books (i.e. particular games' world books). It will also allow for GM-to-GM communication, for player exchanges or to create contiguous worlds across multiple games/sessions/locations. As should be obvious, one of the key "benefits" of registering (as a GM or as a player under a GM) is the character creation and maintenance tool. As a possible "Gold Member" benefit, I am thinking of having a special forum for "GLASS Cutters"--GMs whose input could eventually lead to rule additions or changes. But that seems a bit "pie in the sky," as I have trouble getting folks to study the system and comment when it's free to do so! But if GLASS takes off and become popular, I think this would be a decent little revenue channel AND it would serve to pre-qualify rules commentators, by requiring an investment to participate (thereby avoiding millions of folks chiming in with their 2¢ and expecting the rules to accommodate them). Of course, if I charge just to comment, folks might think their comments are guaranteed to be accommodated... Hmmm... maybe I won't go there after all....

ANYHOW, that's my example of "service layers," and it uses a "loss leader" free product, but it does not dispense with the traditional model of "sell book, sell supplements" as additional revenue streams.

Might this work for your next RPG? Admittedly, a Live Action system tends to require a LOT more "player handbooks" than a table-top session, so my shot GLASS giveaway is sort of "forced" on me by economics: if I made every player, no matter their interest or experience, buy the full book, I'd probably not be able to compete with the homebrews out there. But this way, the average player need buy nothing, while the player that wants to really get "under the hood" can get the full, "GM" book. Hell, that's the same for GMs: someone with some Champions or Hero experience (and LARP experience) could use just shot GLASS to run a whole game, though they'd have a a fair bit of initial write-up to do, if they wanted a specific flavor ro genre of game (whereas they could roll out a tweaked variant of one of the provided write-ups in minutes).

David

[pells]

Well, it seems I'm thinking more about this than I should (by the way, it's a good thing ...)

Yes, basically. It mirrors the primary revenue model for a couple MMO turn based strategy computer games we are now running. Check out http://www.1483online.com to get an idea.

I took a look at it : it seems you're already used to this model. Now, the question is : would this work for "pure" rpg ? There is one thing that comes to my mind. In those kinds of games (same for Ogame), people come on a regular basis (their game is there) and, I suppose, the number of hits per visits might be high. A little bit like on youTube, where, in fact, people "zap" a lot. For rpg, I think the time spent on a single page might be very high : I may come, read a page, then leave.

Regarding YouTube, yeah, they haven't made money yet.

And no one else does on this model (except google, maybe ... but then the ad side is quite different). Quite frankly, if one of the top 10 site can't make money out of this, how can rpg ? But, hey, maybe I'm wrong.

But Marvel and DC also have intellectual property that they can license into movies, video games and more. An RPG system for the most part is not much of a IP. A world setting with rich culture, history, and character on the other hand makes for a great IP. But any IP at its core is only really worth anything if it can accumulate a strong core audience for it. Without that its next to impossible to generate revenues from licensing for it.

Well, licence is a completly different matter (we're talking derivative products here). Of course, you need a strong audience to acheive this. But I'd be ready  to bet a lot that one earns more money from licence than any ads they can put on a website !!!

Once we have the core of the world setting up I think we might open it up a bit and accept user created submissions for more detailed content.

Have you thougth of something like a wiki ? For one thing, they tend to auto regulate themselves. You could have your main ads, and each time someone contribute, they could provide a "signature", a kind of ad for themselves ... I'm not quite sure this would work ...

Of course the danger is, the closer you get the world of online rpg's and using the technology to interact with the world, the closer you get to a player thinking, 'hold on, why don't i just play world of warcraft?'

We shouldn't be afraid of this. Well, if all we have to propose is dungeons/encounters/treasures generators, maybe WoW is better suited. But, I believe that if we stay close to services related to plots/stories, we stand a chance. If there is one thing missing is MMORPG, it is the stories, the stakes. I'm not talking about linear, predefined plot here.

The concept of a free pamphlet giveaway is excellent too when you consider the kinds of places it could be given out in - ie not gaming stores!! I feel there is a great deal of scope here for a truly unique new approach to the concept of launching an rpg, perhaps even you might just sell a players kit, which includes handy references and other materials to download or in hard copy format.

And then, why not sell some services to the DM and others to the players ?

On a final note, reading David's post, I'm telling myself : "He's got something, there's a service there for sure ... but what about the community ? It's not easy to build". And I'm thinking, there should be two kinds of services available : one for "single" group (you've got five customers, but they still use a service) and one for a communauty ...

[guildofblades]

>>it seems you're already used to this model. Now, the question is : would this work for "pure" rpg ? There is one thing that comes to my mind. In those kinds of games (same for Ogame), people come on a regular basis (their game is there) and, I suppose, the number of hits per visits might be high. A little bit like on youTube, where, in fact, people "zap" a lot. For rpg, I think the time spent on a single page might be very high : I may come, read a page, then leave.<<

Yes, the number of hits per user is quite high. And that has proven to be somewhat of a challenge actually. Most advertisers only want to stick their ad in front of the same user so many times. After that the networks delivering those ads begin to default, meaning they don't have any sold ads to give me and we have to then shuffle that ad impression off to another network. Because of the volume of ads shown to a single user we've had to establish relationships with 12 different networks so far and have begun to establish our own ad sales team for further reach. Its a challenge to build the structure and momentum to actually monetize a lot of ads to a single user. With RPG content it should work out about the same way. The idea is not to shove an entire booklet onto a single page three miles long. Its to carve up the content and present it in many easy to navigate smaller segments. Take for instance if we detailed a "inn" for a given location within a specific city. How many pages would that be? Maybe a cover page with a few paragraphs detailing the basics of who owns it and what sort of patrons is has as regulars with a picture of the inn. Then there would maybe be links to floor diagrams, so two more pages to contain a diagram each if its a two story building. And up to a half dozen pages or more to contain NPC character sheets and character data. Maybe a GM only page that contains some adventure plots that can be spun off from the Inn... If I put a tad bit of thought into it there would probably be more content to support that inn as well. So thats up to 10-20 pages to be viewed just to see an inn. And lets not forget that just to reach that inn you have to drill down from the world setting main page, to the kingdom or regional map, to the city or local regional map, to the diagram of the city itself with all the buildings and such and then finally click on the inn to go to the inn page.

So basically, update content a couple times a week and a single user could easily visit a hundred web pages or more just to check out the new stuff. How many more will some users view when jumping over to read or post in the forums? When referencing and updating their character sheets online? There really can be a lot of page views and hence ads here.

>>And no one else does on this model (except google, maybe ... but then the ad side is quite different). Quite frankly, if one of the top 10 site can't make money out of this, how can rpg ? But, hey, maybe I'm wrong.<<

Actually, quite a lot of business thrive on internet advertising revenues. Two of the biggest being Google and Yahoo. Myspace has huge inventories but still struggles, but thats probably more of a corporate structural issue than any failing in the ad marketplace. That continues to grow at record rates.

>>Well, licence is a completly different matter (we're talking derivative products here). Of course, you need a strong audience to acheive this. But I'd be ready  to bet a lot that one earns more money from licence than any ads they can put on a website !!!<<

You might be surprised just how much can be made from advertising. We are currently making about $1 per month per "active" user on our MMO strategy computer games. We believe that once we have a more robust set of games within the network, including our WWI and WWII games among others than we can grow the active base to about 100,000 users. Further, as the network grows we should ultimately be able to drive revenues up to about $2.50 to $3.00 per user per month. So, upwards of $3 million is potential gross. I think that a massively well supported table top RPG with thousands of pages of detailed world setting content and handy dandy online tools for players and game masters, couple with very aggressive promotions to draw new users to those pages could be equally successful. It won't be easy, thats for sure. Its a lot of work managing the ad revenue. And thousands of pages of RPG content doesn't generate itself. But at least the limitation here is creative output, not lack of cash flow or appreciable sales to justify printing new material.

But yeah, licensing has the potential to make a lot more. Not table top game licenses, but licenses for computer games and movies and media like that. Would a game system with 100,000 active supporters online have enough "presence" to potentially get those licenses. Maybe. The leading comics still have a wider audience, so in terms of mind share its not up to those levels yet.

>>We shouldn't be afraid of this. Well, if all we have to propose is dungeons/encounters/treasures generators, maybe WoW is better suited. But, I believe that if we stay close to services related to plots/stories, we stand a chance. If there is one thing missing is MMORPG, it is the stories, the stakes. I'm not talking about linear, predefined plot here.<<

Exactly. Unlimited possibilities remains table top RPG's main advantage and its a HUGE one. Its needs to be promoted more. And the key to promoting this aspect of it online would probably be a number of different approaches actually "showing" a table top RPG game session of the game being played. I suspect online videos of gaming going on would be useful in that regard. Once we get the ball really rolling on this (which is going to take me months before I'm organized to even really get started) I suspect we'll have to plan some con appearances again and bring a cam corder to capture some gaming sessions.

>>And then, why not sell some services to the DM and others to the players ?

On a final note, reading David's post, I'm telling myself : "He's got something, there's a service there for sure ... but what about the community ? It's not easy to build". And I'm thinking, there should be two kinds of services available : one for "single" group (you've got five customers, but they still use a service) and one for a communauty ...<<

I suspect that each publisher that was to try a variant of this publishing approach will come up with different "features" to sell as compared to main content to make free. For players the only thing I have come up with so far is on online character sheet that can be printed to export a PDF of the character for printing. Maybe eventually when there is enough here to warrant the expense we could toss a bunch of money at some concept artists and make character icons with a whole bunch of variable feature and clothes, armor, weaponry, etc, so players could use that for their portfolios. But to be done right thats going to take a lot of art and a a fair bit of programming so that would have to be a much later addition. For GMs we can have random adventure plots, random NPC generation, and maybe an online record keeper for NPC's killed, imprisoned or that got away and NPC friends, contacts, etc, etc. Things the GM could review from time to time as a tool to give them inspiration for future adventure paths. And I could see an option where much of the details stuff could contains GM ONLY content for adventure ideas and plot tips so that on GM subscribers could view those little extras added on to some content pages.

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

[xenopulse]

Are you familiar with chat-based roleplaying?  It differs, in some ways substantially, from table-top RPGs, but there is some crossover appeal.  There are some sites devoted to chat-based play that actually make money.  They also offer what was termed "layered services" upthread, and I've seen it pay off.  For example, I play on a site where anyone can make a character to play.  There's an application process to filter out people unwilling to put some time and effort in, but I haven't seen anyone rejected yet.  Once people are playing in the chat rooms, for free, they can buy the following services:

1) Membership.  An annual cost of somewhere between $25 and $35.  This allows players to have character icons displayed by their name and is also a "prestige" sort of thing.

2) Realm Ownership.  Substantially more expensive, starting at $100, players get their own chat room and message board.  This allows them to contribute creatively, as they add a "realm" to the playable areas.  Also prestigious.

You'd be surprised at how many people at least go for the membership, even though the benefit is not that great and really tangential to the play experience.  You need dedicated people, a culture of players where investment is socially rewarded, and enough of a player base to begin with that makes such a community viable.  I'm pointing all of this out to show that such a plan--basic free services with layered services for RPing--is not only viable, it's already being done, at least in the chat-based community.

Now, having a free table-top RPG is a bit of a different beast, because it doesn't involve active participation on the site, so you'd need to make up for that difference somehow.  Also, it'll be more difficult to foster an interconnected community where prestige matters without a chat server; forums work, but by far not as well.

[guildofblades]

>>Also, it'll be more difficult to foster an interconnected community where prestige matters without a chat server; forums work, but by far not as well.<<

For our MMO strategy games we offer players a site based e-mail accounts, forums and an IRC chat zone. Additionally we have offered "Enhanced Members" the ability to create their own discussion lists through our site base mail and the ability to invite any players to it. The four options seem to be working ok thus far though occasionally we strive to come up with some more "interesting" things for player the chew on and discuss in the forums.

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

[JustinB]

How much do you know about the Television Without Pity business model? They provide free, static content (recaps of television shows) they hire a significant number of paid freelancers to produce the content, and they pay very well from what I understand, as well as managing to support a core staff with good salaries. Now THAT sounds exactly like the kind of model that can flourish with a large enough viewership, even if the content isn't the best since you're updating every day.

[pells]

Well Ryan, I hope I'm not bothering you too much about this ... I'm not even quite sure if (at first) you wanted to talk about service, subscription, ads or building a community and licences. So, I've given (again) more thougths to this, but first, a general note.

[Note]
For my personal project, I plan on using the subscription model based on selling layers of services. That said, plan B (in case I can't sell it) is to propose everything for free and place ads. This is for me the worst case scenario. But, seeing what you propose in this thread, it may not be such a bad scenario. And I must admit, I didn't study the viability of this model that much so far ... Well, anyway, this thread is not about my project, but I might propose you a couple of ideas below (that I'm using in the context of my project), but we're definitly not selling the same product, as you are nearer to classic setting and I'm aiming for plots.
[/Note]

So basically, update content a couple times a week and a single user could easily visit a hundred web pages or more just to check out the new stuff.

You've made your point. I think you're right, hits per users might not be an issue.

Actually, quite a lot of business thrive on internet advertising revenues. Two of the biggest being Google and Yahoo. Myspace has huge inventories but still struggles, but thats probably more of a corporate structural issue than any failing in the ad marketplace. That continues to grow at record rates.

Google and Yahoo are quite different from what we're aiming. Not only are they famous, but also, they are "generalist", being able to target specific users toward the kind of ads they will provide to them. Good for the users (or so to say) and good for the advertiser. As for rpg, we're far away from general content. This has been discussed before. That said, last time I've read about ads revenue from the internet, I thougth it was on a decline, not a growth, since return on investiment for the advertisser was not really there. Well, I need to check that out.

We believe that once we have a more robust set of games within the network, including our WWI and WWII games among others than we can grow the active base to about 100,000 users. Further, as the network grows we should ultimately be able to drive revenues up to about $2.50 to $3.00 per user per month. So, upwards of $3 million is potential gross.

I'm not contractiding your number, but 100,000 users is A LOT !!! Honestly, the day you come to have those volumes of users, you'll be a breakthru in the rpg industry, given that you'll have almost no fees (you don't print cards, nor publish books). These line of product, I think, would generate more income than all your others. That said, I do see two problems :
- In a MMO, each player is a user. In the case of rpg, you would have only a real user, the DM. So, for 100,000 users, you would have in fact, more or less, 20,000 real active users. That's why you need to attract players too to the website. I'll come to that later.
- Since your users don't generate income per se, you depend on your advertisers. Would you be able to find advertisers for 3 millions ? Because, that's the stake. And still, it's rpg. There's a limit to advertise low cost vacations on a rpg site. Well, you're better placed than me to evaluate that.

Would a game system with 100,000 active supporters online have enough "presence" to potentially get those licenses. Maybe.

Maybe a boardgame, a CCG. Well, enough to come to attract new people thru those licences. Maybe even video games (I do find they stink I designing setting/plots). That said, there's a licencing you haven't thought of : licencing the container. Let's suppose you develop a wonderful tool to manage a setting, something unique, very helpful. If it is generic enough, you can licence its use to other setting creator, managing the webhosting, graphic interface, for a monthly fee and a shared repartition of the money they would make. I recommand you keep that in mind.

I suspect that each publisher that was to try a variant of this publishing approach will come up with different "features" to sell as compared to main content to make free.

What I'm talking about is not feature, it is, in my opinion, a must. The idea is to cluster personal services, and then make them available for a community. For instance, you provide, as a function of your website to the DM, the possibility to insert maps of dungeons, inns. It should be transparent to the other DMs (they should not be able to access it). Afterward, you can provide as a feature for a community, the possibility to use other's work, based on their preferences. Another example, chat. You provide this service for groups who want to play from a distance, but also to a communauty who would want to play with many DMs and much more players. That way, you elaborate services that don't depend on communauties, but can be extended to.

For players the only thing I have come up with so far is on online character sheet that can be printed to export a PDF of the character for printing. Maybe eventually when there is enough here to warrant the expense we could toss a bunch of money at some concept artists and make character icons with a whole bunch of variable feature and clothes, armor, weaponry, etc, so players could use that for their portfolios. But to be done right thats going to take a lot of art and a a fair bit of programming so that would have to be a much later addition.

For players, use the website to allow the DM to distribute xps and let the players manage their progress thru the site. Allow the players to "deposit" maps they have created during play (in a "cluster" way). As for illustrations, I don't think you should give them away : sell them as bundle instead. A group might be interested in "buying" 20 illustrations for their own purposes. That shouldn't be hard to sell ..

Are you familiar with chat-based roleplaying?

Quite interesting and encouraging. Could you provide a link to one of those sites ?

To conclude about ads : I believe the choice is ads or no ads at all. For myself (well, in fact for all those working on my project and we've discussed this a lot), since we're selling a monthly subscription, the decision was made to have no ads at all. We're aiming at a very high quality product, very high quality website, and the last thing we want to show to our customers is ads. So, I believe either you go for it as your main (if not only) revenue, stating it right away (and I've noticed that's what you've done for your MMO), putting there everywhere or none at all. There is no middle ground for this.