My turn to LoL, did you read? The $25 is for for printing, binding, and shipping for all the books that came out in a year.
Of course if you want to go by your estimate of $5 per book, I can adjust that number from $25 to $45. That would strengthen my argument unfairly, though.
No your entire argument is total bunk. Nothing can strengthen it to being more then empty bunk. Sorry.
Which would still be profitable in my estimate.
Much less so then a print book.
As I said, I was basing this off of the fact that almost all of these books can be found for 10% - 20% cheaper than Amazon, who is already selling them for 10% - 30% off the cover price. Since Amazon's business plan most likely does not involve hemorrhaging money, I feel pretty safe assuming the price they are selling the books for is at least cost.
Actually you dont have the first clue how Amazon works. So let me briefly explain it.
1.
Amazon DOES lose money on many sales. Its part of their business plan. They make it up in advertising, their patents on E-commerce processes and by selling certain products that in fact have a huge markup.
Many individual products are actually sold at a small loss though and they are used as a teaser to get you in the virtual door to buy other things which do have a huge mark up.
Some gaming books are likely one of those products sold at a loss because gamers tend to buy other books like fiction novels and video games on which the company DOES make money. The D&D books themselves are simply considered a marketing cost to Amazon.
2.
Many of the books on Amazon, ARENT BEING SOLD BY AMAZON. They are also a listing service for 3rd parties to list their own products for re-sale or even direct sale in the case of producers.
So your assumption that Amazon is buying and storing lots of D&D books they need to turn a profit on is faulty. They are just letting WoTC list their books there. WoTC can then sell them to consumers at or below their own MSRP while still making more money because of cutting out the traditional middle man.
But you may be as in the know as you believe. Can you point me towards anything that indicates the wholesale price of the D&D books published last year?
Yes I am. I've been in involved in wholesale distribution for retailers for about 12 years now as a career. I know all about how it works and where the money is.
And no, WoTC would never publish the wholesale price. That would undermine their retailers and their own direct online sales. You would have to get a catalog from someone who owns a gamestore to show you the one they get from WoTC. There are several store owners on this forum you can ask if you like.
Of course that would likely violate an NDA or two and get them sued and shut down so they would likely tell you no.
Granted, I didn't account for server costs, nor IT. But given the number of customers they serve, they would have to have the most expensive IT department I can currently imagine being staffed by human beings in order to have the cost per person exceed $0.05 per month.
LOL thats so far off its laughable.
Heres how you actually run a business. Pay attention.
Assume with Magic cards that WoTC is in the 10-15 million dollar year income range. Thats a 35% federal tax.
6$ per customer per month. 72$ a year gross. Less 35% = 42 per customer. Assume a 20% operating cost (hardware, power, bandwidth,etc) which is fairly low but IT runs low in that regard. = 28$
So you have 28$ per customer profit per year just assuming taxes and hard cost of business expenses.
Median Salary for an entry level IT systems analyst. (your basic IT guy) is 54,000 a year. However the employer pays FUTA and medicare taxes on his salary as well as the cost of insurance plans. Generally pushing the real cost of en employee to around 1.3X of salary.
For a real cost of 70,200 For just one IT guy.
70,200 divided by 28 Means you need 2500 DDI customers just to pay for 1 entry level IT guy in order to break even. How many IT guys do they have? How many who are more then entry level? How much does the department head make?
Thats not even your real ROI on a DDI customer though. You have to figure customer acquisition costs. Thats how much it costs to get them to sign up before paying you a dime. Advertising, etc.
This varies wildly per industry from 400 up to 5,000 per customer. But they have a built in base so lets low ball even the low end and say they have a 200$ cost of acquisition.
If you figure that in you have to retain each DDI customer for almost 10 years before they break even on the cost of acquisition. During which time of course company costs for maintaining the account are being accrued in the form of labor and space rentals.
So to get specific for DDI since the 60K members have been bandied about lets use that number.
60K gets them 1,680,000 Per year. Sounds good right? Oops.
Cost of acquisitions means that those 60K members cost 12,000,000 to get. So your only 10.5 million in the hole at the end of this year, things are looking up.....and 9million in the hole for your initial customers only at the end of year 2, and so forth and so forth
You can see for yourself with the simple, actual, business math how long they would have to maintain this stinker to turn a profit. And all of that assumes a 100% retention rate of customers year to year. Which is very doubtful.
Nope sorry, DDI is a stinker of a business decision and always was.
I admit being suprised that you have the gall to laugh at my logic while you propose a 49% tax on a web database and app set. Even at 24.5% state and 24.5% local, that seems far beyond credible.
Thats because you dont know what your talking about. As stated above the Federal alone is 35%. Plus state and local. Many companies pay over 60% in taxes and fees just to operate.
I will never disagree with increased quality, but it isn't nessasarily the fault of the book if it doesn't sell. Betamax was superior to VHS, Sega was superior to Nintendo, the Tucker was superior to any other car at the time, yet all failed.
Beta had a very limited library and cost much more to produce and sell. It was not beaten by a comparable product. It was beaten by a much cheaper product with more uses.
Sega being better is by no means a fact. They attempted to reach out to a more adult audience in a time before adults were ready for it. Sega lost because they tried to run while the video game industry was still learning to walk. Totally different.
The tucker failed for many reasons. Bad publicity, a hunk of crap prototype in the unveiling to the press and a very public criminal trial for stock fraud among them. Hardly a comparable situation.
"Well there's your problem."
Obviously, nobody in WotC or Hasbro has a shred of business acumen, or at least, they keep all those people in the mail room...
I have no doubt there were many people who told them it was a stupid idea. They just didnt listen. Companies do it all the time.
If they had actually followed through with a good virtual gaming table and continuing online support they could have raised the price of DDI and gotten far more customers, maybe even blossomed it into its own online game to push 4e with and then DDI would have been a marketing cost. it wouldnt, by itself have needed to be self sustaining.
That is probably what they had in mind at first and might have saved it. However when they scrapped the VTT they should have dropped the whole thing.
No, I think instead we can say this. Obviously they believe differently than you based on the information they have available.
You know who else had an opinion based on the information available?
Rhythm and motion ( Blackberry )
Netflix
Kodak
MF global.
Should I go on? Just because a company decides on a course of action doesnt mean its a good one
So, Facebook? Don't they have a D&D thing now. (I honestly don't know, I abandoned my Facebook account ages ago.)
According to my NWN complete box, yes they do. Its called heroes of neverwinter. Never tried it but facebook can be a great avenue for games and advertising. Just ask Zynga.
3 letters.
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