Growing an RPG?

[fireinthedust]

How hard is raising funds?

For Paizo, I'd be interested in knowing how exactly they got started. Presumably they had a resume before WOTC would touch them.

Green Ronin: I recall their Advanced books coming out first, like Adv. Bestiary. And M&M got popular fast. Is that the timeline? Did they come up with material and when it sold well they just kept going? I recall the Bestiary author worked for Dragon for a while, so I'm guessing industry contacts came into play there.

Anyone know much about company histories?

 

[nedjer]

Disclaimer: this is only comment - not advice.

The traditional business model is much as outlined. Get some product, invest in making it shiny and buy marketing. This is all about risk and the risk is usually reduced if you play safe, i.e. Pathfinder presents an almost exact copy of what was known to be WotC's already fairly successful 3.0-3.5 model in terms of the site, the artwork and the product lines.

While the risks/ costs can be reduced by simply re-gearing an existing successful business model, it's necessary to out-shine the original model by having a glossy site, artwork, products, marketing, possibly licensing and support. Costs and risk stack up there - but you are buying instant access to media love. Your products will be reviewed, blogs and forums will announce them and so on. That in turn may generate sales greater than the costs.

More recent model is the chop shop, where you use e-publishing to mimic a brand or product line - but don't pay out on production or marketing. This is reliant on replacing budgets with time and effort. You do your own proofreading, your own editing, your own marketing and probably only payout on artwork, (through up-front Kickstarter money or fairly inexpensive commissioned artwork). This is a re-brand or stick close to the original model approach, where lower pricing can offer players low-hanging fruit that they may pick-up in passing, e.g. an adventure with a cool cover for $5. The sheer amount of effort required to juggle everything often impacts on quality with the chop shop, so products may not have a long-tail.

There's a third way, but it blurs the distinction between hobby and business. The minute you say you're willing to depart from standard business models and experiment, rather than re-brand, the risk on any investment goes through the roof.

You can go ahead and take this approach to craft products as you wish to; but it's no longer a case of going to a bank and saying 'this product is exactly like this other selling product - if I run it efficiently I'll be able to make so much cash'.

Many of the first RPG companies started out along these lines, but the niche wasn't so crowded then and costs were kept right down pretty much until the hardback 1e PHB appeared.

 

[Matt James]

The tabletop RPG community is smaller than many might believe. A lot of the smaller presses have worked with many of the other smaller presses while at one of the larger organizations. Word of mouth and reputation does a lot. Making quality, kick-butt products is okay, but it's all in who you know in the majority of cases.

Be active in the community, attend conventions, and follow Wheaton's Law by not being a dick. These are all good ingredients for starting a quality organization that would influence consumers to buy your products.

Wearing pants apparently helps, too--one of the hardest roadblocks I've encountered.

 

[chaochou]

The Designers and Dragons book might give you a handle on how games companies rise and fall.

Alternatively there are some histories over at rpg.net, here:
Designers & Dragons: The Column #1: An Introduction to Designers & Dragons - RPGnet

I think a sober look at the industry shows there are almost no companies which become big and stay big - certainly not on the sales of rpgs. TSR failed, Chaosium went close and had to split its IPs, ICE folded, FASA folded. Steve Jackson Games are one of very few survivors from the 'early' days, and they derive most of their revenue from a card game. White Wolf merged with an MMO company.

There are certainly big brands in rpgs, but I don't see many long-term success stories among the companies which create the brands.

 

[Piratecat]

It seems to require some form of network externality.

Paizo was able to leverage their already in-place network from the magazines.

Early companies were able to quickly develop enough of a network from linkages to other fads/social movments (White Wolf with goth, Uni-system with zombies) or being first in an unexploited niche with a good-enough product.

Agreed. I've been following Pelgrane Press's growing name recognition lately. Starting with the delightful but largely unknown Dying Earth rules, they launched GUMSHOE. It didn't particularly catch on until they published Trail of Cthulhu. New customers bought those rules due to the familiar CoC name, and it seems like they've continued buying Night's Black Agents and Ashen Stars (helped along by a nicely improved rules set and both those books being superb.)

Still, they've been in business for ages and are still not over the hump for name recognition. It's a fairly impressive trick when companies can manage it.

 

[saskganesh]

How hard is raising funds?

Challenging for most starts-ups in any industry.

The most likely route is friends and family. You may luck into an angel investor through business or social contacts.

Most investors want a guaranteed return, so they unlikely to support your dream in the beginning. More sophisticated, deep pocketed and successful capitalists will also want effective control of the business which is unattractive to most entrepreneurs.

Generally the more successful you are, the easier it is to raise money.

 

[Niccodaemus]

Challenging for most starts-ups in any industry.

The most likely route is friends and family. You may luck into an angel investor through business or social contacts.

Most investors want a guaranteed return, so they unlikely to support your dream in the beginning. More sophisticated, deep pocketed and successful capitalists will also want effective control of the business which is unattractive to most entrepreneurs.

Generally the more successful you are, the easier it is to raise money.

Not to mention that the TT RPG industry is not a proven money maker. It is a labor of love for most, more than anything else. The successes are few and far between. Hard to get people to risk their real world money in such an industry.

 

[Yora]

These days you have the huge advantage of digital distribution, which allows you to work with a minimum of production costs. The main factor really is the time you invest into it, which either has to be done in your free time or reduces the amount of income you can make from another occupation.

If I would want to live off the income I make from producing RPG material, I think I first would come up with a completely product before seriously starting with business. Distribution over RPGNow should probably come without any additional costs, but quite likely won't get you any real income. However, this is a good and cheap way to learn if there is a market for your product. If nobody wants it, all you lost is your time investment, but you don't have any outstanding bills you have to pay.
If you are one of the few lucky ones, then I would start investigating opportunities to get your stuff printed. I think these days printers give you quite reasonable offers for even rather small print runs. First get a batch of 100 books and wait until it is sold before thinking about having more reprints. If the whole thing bombs, the costs are still managable. If it happens that your books sell, order increasingly larger batches from the printer, for which you can then pay with the income from the last batch.

But to really make serious profits from it and being able to fully support yourself just from that, the most important factor probably is luck. A good product increases the chance of it getting a solid and expanding fanbase somewhat, but you really need people telling other people about it to gain a sizeable number of customers.

I decided to write purely non-comercially very early on. Everything I do gets online for free, and if it turns out spectacularly, I might set up a donations account. But doing it as a business just seems way to unpredictable to me, and I don't have any existing industry contacts.

 

[Aramax]

Let me sort of answer what Im seeing as the unspoken question.


Write short stories or novels ,much easier to sell and a LOT more money!

 

[riotshieldnation]

But to really make serious profits from it and being able to fully support yourself just from that, the most important factor probably is luck.

As of last night, I found out about e20.

Here's a guy who has tons of credibility and industry ins from SWSE and gencon, a great work ethic, and a great kickstarter funding project (a great way to raise money actually), but is having trouble with getting his finished product out the door. As much as I now want this system, it should probably be seen as a warning that even the best thought out of businesses can run into trouble. As Yora just said, luck is an important factor in getting your product to market.

Did I mention I really want this? Because it looks like a fixed version of d20 modern, which would be awesome.