Another RPG company with financial difficulties

[barsoomcore]

The plain and simple fact is that there are relatively few people who enjoy combining improvisational theatre with double-entry accounting.

MOST people in the world, if you show them the Player's Handbook, are just NOT going to read that bloody thing in order to play a GAME.

Now, I've had great success in getting non-gamers to play. I've got flight attendants playing D&D. And the big secret is -- I never show them a rulebook. I create their characters for them and give them a simplified character sheet and they have great fun playing the game.

Which is great, but between the four of them, over the past year and a half, they've accounted for maybe $50 in gaming materials. That is, three of them received dice sets as gifts (I actually have no idea what a set of dice goes for, so that $50 figure is pure guesswork).

This pattern is common. You don't need to spend much money to play this game. I haven't spent a penny on RPG stuff in at least six months. I'm still having just as much fun, it seems.

And of course, people who DO play this game make up tons of their own stuff for it. And they make it available to others. For free. When I need a new adventure or a monster or whatever, I start online, looking through the staggering amounts of free stuff that isn't noticeably different in quality than plenty of stuff I've paid for. I'm not going to consider buying something unless I either see it and experience the "Must-Have" knee-jerk reaction or it offers significantly higher value than what I can get for free.

And I say all this as someone who would LOVE to be writing game material full-time. Who supports the industry and the people in it as much as possible. But I look at this three-pronged situation: 1. Intimidating Hobby 2. No Need to Spend 3. Tons of Free Stuff :: and I don't see how anyone can think this is ever going to be a large (or even medium-sized (or even small)) industry. It's a hobby. A FRINGE hobby. And I don't believe it will ever be able to support more than a handful of full-time professionals.

Frankly, I'd be surprised to learn Hero Games had offices.

 

[Rasyr]

Not very long ago, Guardians of Order went public about their financial woes. Now we have Hero Games doing the same (http://www.herogames.com/forums/showthread.php?t=27395&page=1&pp=15). Add them to the long list of publishers who have scaled their releases schedule way back or stopped all together...

As GreatWyrm has pointed out, Hero is not scaling back anything. They are changing marketing and sales tactics however, so that things like what happened to Gaurdians of Order, Decipher, and several other companies (one distributor even went out of business recently as well) will not happen to them.

Hero is basically doing what the new ICE did when it went into business a few years ago. That is to NOT rely on distibutors. The CEO of ICE made a post on the ICE forums back around the beginning of the year. In that post, he mentions that about 3% of ICE's sales come from distributors, the rest comes from direct sales of books and PDFs.

Agreed. As the distribution model becomes even less reliable, a lot of publishers are likely to start depending more and more on direct sales.

Already starting to happen. Green Ronin has already started selling PDF versions of products and now have their own online store after a couple of years of not really having one. Other companies will shortly be following suit.

The biggest problem right now IS the distributors and the distribution system. When a FLGS buys a game book to sell, it pays upfront. When a distributor buys a game book to sell to retailers, it pays for the book 30-90 days later (IF they pay on time). When a publisher pays to have a book printed, they have to pay upfront for the printing. Can you see the break in the system?

There needs to be more conventions. Years ago, there used to be a lot of conventions. Now there are very few. They are a great way to attract the general public into gaming, and a con can deliver CCGs, board games, and a whole host of other kinds of games. Lots of people were probably introduced to systems like HERO or RoleMaster, or anything else that was D&D through a convention.

The problem here is that with increased online sales, conventions are normally money-losers to the publishers, unless they have a product that is debuting at said convention, that cannot be gotten online before the convention or some similar promotion to increase sales at the convention. Just my opinion one this one.

 

[Fiery James]

My guess (based on many many conversations over the past year) is that most game companies are 1 or 2 flops away from being completely out of business.

Seriously -- these are companies that have 8 or more releases planned this year, and if just 1 or 2 fail, they're done.

Things are very tight for everyone right now, so it's time for everyone to play very very carefully and use your head rather than your heart for the next while.



- James

 

[jmucchiello]

Lots of people were probably introduced to systems like HERO or RoleMaster, or anything else that was D&D through a convention.

Funny, I managed to get introduced to various different gaming systems (HERO, V&V, GURPS, etc) in the last 20 years without attending a single convention until 2003 when I attended GenCon in Indy.

Well I think since the beginnings of D&D, the main method has been word of mouth. I would bet that it's a rare occurrence that someone decided to pick up a PHB from an advertisement alone.

Likewise, I bought (or convinced Mom to buy) the D&D Basic Set (Red) without knowing a thing about RPGs way back in 1982 or so. I just thought the cover was cool.

How often do I have to buy a core rulebook? The rest is decoration.

That, ultimately, is the problem with RPG publishing. Nobody needs even the core rulebook. It is just a common place for a group of people to spring off from. But even that isn't required if your group (and GM especially) are creative enough.

The plain and simple fact is that there are relatively few people who enjoy combining improvisational theatre with double-entry accounting.

Even more accurately put. Well done.

 

[barsoomcore]

use your head rather than your heart

Wise advice in any industry, at any time.

 

[maddman75]

Agreed. As the distribution model becomes even less reliable, a lot of publishers are likely to start depending more and more on direct sales.

However, there's a reason they aren't doing both - and that's the distributors. Here's a perfect example - I'm a big Unisystem fanboy. I love me some Unisystem games - the books are solid, the guys at Eden Studios are great and really responsive to the community. I'd love to buy direct from them, but I can't bring myself to. The costs are too great.

Buying from Wal-mart.com or Amazon.com you can usually get about $10 off a hardback, and sometimes nearly as much off a softback. I mean I just bought Exalted, $29.99 MRSP for $19. Now if the discounters can still sell those books at a profit at those prices, why can't the creators? Because it will tick their distributors off. Buying from a company directly means paying full retail, and I'm far too practical to do that. I mean they still get paid when I go to the discounter, but they'd get paid more if they could sell at the same price on their web site. This is also the reason for the high prices at DTRPG.

Hero Games will be able to do this, because they aren't going to have to keep distributors happy.

 

[Krieg]

I used to make about 17-20 cents a word writing a weekly column about Professional Wrestling

You scare me sometimes, you really do.

 

[johnsemlak]

Perhaps what the industry needs is some downsizing. If there are fewer publishers (which there are already compared to last year), there might be more room left for those that remain.

That of course may be tough to hear for those that have to find work elsewhere. But its just a market reality it seems.

 

[tf360]

The problem here is that with increased online sales, conventions are normally money-losers to the publishers, unless they have a product that is debuting at said convention, that cannot be gotten online before the convention or some similar promotion to increase sales at the convention. Just my opinion one this one.

Conventions that are worth attending are few and far between, especially without a brand new product. First off, nearly every convention has at least one or two retailers that are selling bins of backlist RPG material for as much 75% off the cover price. I ran a booth at a con a few years back where one of the gaming manufacturers was sandwiched between two local retailers that were selling his products for 1/2 the cover price. Needless to say, it was a very poor con for that individual. So if you set up a booth at a con, you now have to compete against one or more retailers that may be selling your product at a fraction of its cover. It's not difficult to figure out where the consumer is going to spend his money. You can offer some perks that he can't, i.e. signed copies but that only goes so far when someone's strapped for cash and looking for a bargain.

In addition to the competition from a discount retailer, you're also competing against other industries in a dealer room, i.e. minis, comics, ccg's, video games, anime, dice, art, clothing, medieval weapons etc. etc. Remember RPG's are only part of the convention's experience. To add to this, many of the RPG players are attending the con for RPGA events and benefits so if you're selling a 3rd party product that can't be used in an RPGA event you might as well be selling used tissues.

Now throw in your overhead. There's travel to the con, shipping fees, booth fees, sales tax, food, drinks and a hotel room if you have to stay overnight. If you're running a one man booth which is a pretty tall order, you're probably looking at a $300-$500 expenditure for a 3-day show. At a con like GenCon with 25,000+ attendees, it's worth it. At a local con with 1,000 attendees, many of whom are there for something other than rpg's, well you get the gist.

 

[barsoomcore]

Hero Games will be able to do this, because they aren't going to have to keep distributors happy.

Very astutely pointed out.

Are distributors shooting themselves in the foot? What could they do that would put more money (more reliably) into everyone's pockets? Or are they dinosaurs that eventually all the game companies are going to divert away from?

Which means what for the FLGS? Can they still get the books they need at prices they can afford if they have to go straight to the publishers? Is the industry moving towards 100% online sales?

These are pretty interesting questions, I think.