EN World GameStore Closing

[Steve Conan Trustrum]

I must be missing that dictionary then.

Seems that the vast majority of companies can easily sell elsewhere. The companies that most customers recognize can even forego selling via PDF altogether and take only a minor hit.

Part of the definition of monopoly is having a large enough share of the market to be able to directly exert pressures on said market that cause factual shifts in how that market operates and exists. So, if a company has enough market share that its decisions set the standard in the industry, that's a monopoly. In this specific instance, none of the remaining companies have a noteworthy enough market presence to be a viable option to compete against the newly merged company--companies such as Paizo and e23 don't have even remotely the same market presence and selling power. The fact that this is so means you're essentially doing business with the new company, or not at all or you have to look into radically new ways outside of the existing service model to get product to your customers.

You may believe otherwise, but the new company's market share DOES constitute an effective monopoly because of the breadth of influence they now have on the market and the total absence of similar influence available to the remaining competition. The big problem with how some people are reacting to the use of the word is they aren't using it as an appropriate statement of the facts of the matter but rather believe the term contains "evil" conotations of purpose as a part of its definition--a monopoly is just the unavoidable end results of the merger and not some diabolical plan on the part of James and Steve.

OBS's only leverage is that it brings more customers to the table than anyone else -- so they're supposed to be criticized for doing a good job?

This is most certainly NOT their only leverage. Their market share allows them to define market trends and can even effectively destroy aspects of the industry, were they to decide to do so. Their access to customers is so much higher than any other PDF storefront that were they to (by way of example) decide not to sell anything with the d20 logo on it, the d20 PDF market would virtually disappear. Even companies only selling such products through their own company sites would notice a loss of sales because the destruction of the core market would cause customers to shift for alternatives.

We're also already seeing how the merger is affecting prices because there are a number of companies (including one of the largest PDF companies in the industry, Ronin Arts) who are already talking price shifts as a result of the merger. If OBS' influence in the market wasn't so grand, the price shifts wouldn't be necessary because the other storefronts could be used to create a balance in the shifting profit margins. Because the majority of sales in the PDF industry come from the companies merging into the OBS, however, restructuring is practically inevitable, be the restructuring in budgeting/production planning or product costing (unless a company is willing to go exclusive, which takes out your point about there being other companies offering their services, which then returns us to the point of an existing effective monopoly.)

There also remains absolutely no proof that the OBS will bring any additional customers. That is purely speculation at this point. Companies that already had dealings with all the affected companies aren't suddenly gaining access to more people. FOr there to be this influx of customers that you speak of, OBS will have to do something more than just consolidate their customer databases. And, to their credit, James and Steve have spoken about how they have such plans, but until we see actual results (along with data on how any results aren't just a matter of the market evolving on its own, which we already know is happening), those plans are unproven speculation and theories. So, while they have ideas as to what they want to do with their increased slice of the pie, their asking for that slice before actually being able to provide anything substantial in return. This is, I think you'll find, the crux of where the disagreement regarding the royalty changes rests.

 

[Steve Conan Trustrum]

Except that ANY RPG website with a lot of traffic could do what ENWorld did tomorrow.

You may want to note that "what ENWorld did" wasn't especially noteworthy so far as the overall market was concerned. If you talk to most publishers they didn't make nearly as much from ENWorld as they did on either RPGNow or Drivethru. ENWorld may have become third on the market but they were WAY behind the leading two when it came to product sales and throughput. Most publishers who spoke up on the matter noted that ENWorld's storefront had no impact on their sales on the primary two sites. The biggest reason as to why this is is the same reason why e23 and Paizo will find it difficult to compete on OBS' level: the top companies are so entrenched in their market shares that penetrating them is an expensive uphill battle that has everything working against the new guy.

I believe many publishers will agree with me when I say that ENWorld's most useful and influential interaction with the PDF market following the opening of its own storefront remained what it had been prior to that storefront's opening: offering a consolidated location for publishers to access their customer base and not as a place to buy or sell PDFs. Which is why Misfit Studios never forked out the sign-up fee to join them--the stories I'd heard about insignificant sales and logistical problems were too frequent and from too many respected companies for us to risk coming on board and not doing so didn't see a drop in our sales at all.

If GR or Mongoose started selling their PDFs on their own site and then said "oh yeah and anyone else who wants to sell their PDFs here is welcome", *boom* we've gone from 1, to 5 to 3 and back to 4.

And since being exclusive at OBS allows us ALL to sell on our own sites, I think what you'll likely see is DOZONS of sites selling PDFs that NEVER have before.

Eventually, I predict several of those sites will reach a critical mass where they combine stores, or a high traffic site simply opens the doors for others to sell there (like Green Ronin or Mongoose).

What you seem to not understand about monopolies is that it has nothing to do with the level of competition.

It's how easy competition can spring up, in other words, how fertile is the soil.

We are by NO means in a non-competitive enviornment in the PDF distribution arena.

Chuck

I think the thing you continue to not understand is that people aren't using the word "competition" to say "yeah, there's someone else out there selling PDFs as well, no matter how ineffective or small their market share." The term is being used to illustrate that there's noone left out there operating at the level of OBS to make them worry or push themselves in many regards. Yes, monopolies very much DO have a lot to do with the level of competition remaining in the market because the remaining alternatives are not viable substitutes.

What you're saying is that because some guy operating out of his basement has written his own OS and is selling it off his web site that he's offering Microsoft competition in the OS market. What everyone else is saying is that because this guy's ability to affect the market is so minimal that he isn't actually competing with Microsoft at all.

e23, Paizo, etc. are indeed competitors in the sense that yes, they exist in the same market. Are they competitors in the sense that the amount of PDF business they do results in sales even remotely comparable to those that went through the systems of OBS' parent companies? Absolutely not. Not even close. They're essentially second thoughts that were so insignificant in the larger scale of things that most of the market didn't even take the time to utilize them. This may change now (MAY, mind, as it's not a given), but such a state of actual competition does not currently exist. So far as the PDF rpg market is effectively and practically concerned, OBS' parent companies were the people to be doing business with, full stop period, if you wanted to be in the PDF market. Everything else was just a bit of extra icing on RPGNow's and Drivethru's cake.

 

[Vigilance]

I think the thing you continue to not understand is that people aren't using the word "competition" to say "yeah, there's someone else out there selling PDFs as well, no matter how ineffective or small their market share." The term is being used to illustrate that there's noone left out there operating at the level of OBS to make them worry or push themselves in many regards. Yes, monopolies very much DO have a lot to do with the level of competition remaining in the market because the remaining alternatives are not viable substitutes.

OBS has less market share than RPGNow did when DTRPG started up.

There's nothing in the market right now to convince me that the same thing could not be done again.

Chuck

 

[Bacris]

Actually, the contract does allow OBS to take over as the entity:

13. TRANSFER OF RIGHTS. This Agreement shall be binding on any successors of the parties. Neither party shall have the right to assign its interests in this Agreement to any other party, unless the prior written consent of the other party is obtained.

OBS is the successor of MDC, thereby making the transition from MDC to OBS legit.

That being said, they may be in breach of contract as far as I can see after reviewing the contract for placing the products on DTRPG's storefront, as the contract stipulates that MDC (and thereby OBS) can post the products at RPGNow.com and RPGShop.com - no stipulation is given that I can see that allows that to transfer to an additional storefront in the case of a change of ownership.

So as far as I can see, people can have legitimate reason to be upset that their products are at DTRPG without their consent, as it is not covered in the agreement... but I'm not a lawyer, so I may have missed a stipulation So I suppose if you want to file a grievance or legal dispute, head on over to Wisconson

 

[Steve Conan Trustrum]

OBS has less market share than RPGNow did when DTRPG started up.

There's nothing in the market right now to convince me that the same thing could not be done again.

You mean other than the fact that all the leading storefronts other than those involved with the merger haven't yet been able to do so despite most having ties to successful gaming companies behind them? EDIT: not to mention EnWorld's failure to do so despite the leg up their d20 presence with customers gave them? Yeah, no proof of a problem in surmounting market shares there ...

 

[2WS-Steve]

Part of the definition of monopoly is having a large enough share of the market to be able to directly exert pressures on said market that cause factual shifts in how that market operates and exists...
<trimmed for brevity>

Do you have any citations for this definition? I can think of few clauses more vague than "cause factual shifts in how that market operates and exists". As a single customer I cause factual shifts in how the PDF market operates and exists.

Here's some that I found:

A monopoly power is defined as the ability of a business to control a price within its relevant product market or its geographic market or to exclude a competitor from doing business within its relevant product market or geographic market. It is only necessary to prove the business had the "power" to raise prices or exclude competitors. The plaintiff does not need to prove that prices were actually raised or that competitors were actually excluded from the market.

Today, a general definition of a monopoly is where nearly all of one product type or service is owned by one person or group of people within a community or area. Thereby, the sole control of this product or service is given to one party to the elimination of all others within the marketplace. To determine whether purchasing a competitor's business or creating an agreement with a competitor may result in a monopoly within your market place, please seek the advice of an attorney.

-- FreeAdvice Website

or

Exclusive control by one group of the means of producing or selling a commodity or service: “Monopoly frequently … arises from government support or from collusive agreements among individuals” (Milton Friedman).

-- Answers.com

Roughlydrafted.com has a simlar discussion regarding iTunes and whether or not it has a monopoly:

A monopoly does not refer to the popularity of a product, but rather the control of a market. For example, GM does not have a monopoly in selling the Cadillac Escalade. GM wouldn’t even have a ‘monopoly in SUVs’ if the Escalade claimed 80% of that market. It would have monopoly only if consumers could not drive around without buying an Escalade from GM, and no other auto makers could offer competing cars for sale at market prices.

...

The fact that a billion and a half songs have been sold through Apple’s iTS does indicate that a significant number of people have invested in Apple's platform. But iTunes represents no more of a monopoly in digital music than the game World of Warcraft does among MMORPGs.

Simple popularity and the inability of competitors to introduce rival products that can compete or gain as much marketshare do not make a monopoly.

At best this talk about monopoly sounds like speculation that would never hold up in court.

 

[Steve Conan Trustrum]

Do you have any citations for this definition?

Check the 1999 case against Microsoft. Yes, there were actual competitors, but Microsoft's influence was such that it was ruled to be a monopoly.

At best this talk about monopoly sounds like speculation that would never hold up in court.

I imagine Microsoft's lawyers thought the same.

Let's be clear here about something: I'm not saying that James and Steve are up to anything underhanded. Both have been great for the PDF market and have done more to grow it than any other two people I can think of. I've more experience dealing with James, and he's been fantastic in every respect, even those where I found myself wholly and loudly opposed to his position. The guy is a true gent in my books. However, that doesn't change the fact that the merger creates a focus of market share that creates a monopoly. This is not subjective but an objective result of the merger. Do I think James and STeve will purposely use this fact to underhanded purposes? No. Do I, as someoen operating a business in this industry realize that something can still happen as a result? Is there the very real possibility that OBS could affect pricing and market dynamics in the RPG industry were it to attempt doing so? Absolutely.

I thought my great uncle was a fantastic guy, and so did my grandfather. Indeed, my grandfather trusted him so much that he gave great uncle John, his accountant, signing rights for many of his businesses. Great uncle John remained beloved by most of the family right up until he stole a few million from my grandfather. The moral? Just because someone hasn't done something to earn one's distrust doesn't mean that a businessman is doing something wrong by admitting that there is more to just trust in protecting one's own business when a vulnerability or concern is exposed. The possibility for influence via an effective monopoly remains true and must be considered in business models even if it never bears fruit. That's not a reflection on James or Steve, or what they've built and are now building--it's a matter of publishers showing concern for what they have themselves built.

 

[Vigilance]

You mean other than the fact that all the leading storefronts other than those involved with the merger haven't yet been able to do so despite most having ties to successful gaming companies behind them? EDIT: not to mention EnWorld's failure to do so despite the leg up their d20 presence with customers gave them? Yeah, no proof of a problem in surmounting market shares there ...

What we're talking about is the ability for someone to successfully compete.

Note that this does not mean anyone should be able to fire up a geocities site and then whine about monopolies when they dont compete successfully with OBS.

DTRPG provided something NO OTHER site was providing at the time: they had exclusive companies, very popular ones, including WW, Malhavoc, and AEG.

That edge accounted for their enhanced ability to compete.

The definition of monopoly is not "competition will be hard because there's already a successful business providing the same service as me".

Again, tell me how it would be harder for a competitor to start a successful site now than it was when DTRPG opened its site.

RPGNow had more of a market share THEN than OBS does NOW.

DTRPG brought a lot to the table then. And there's nothing stopping another site from doing so now.

And you haven't proven that there is.

You keep using a lot of vague semantics and throwing a lot of scary words around but you have not been able to answer my one simple question, despite several sarcastic replies.

I'll ask it again:

How is it less possible for a website to successfully compete with OBS now than it was when DTRPG opened its site to compete with RPGNow?

RPGNow was more of a monopoly THEN than OBS is now.

Why could a website not do what DTRPG did today?

Chuck

 

[Steve Conan Trustrum]

RPGNow was more of a monopoly THEN than OBS is now.

Why could a website not do what DTRPG did today?

I don't think you quite realize what's going on here. There is no more "RPGNow" as a company entity. There is no more "DriveThru." These are now just operational titles for OBS, titles that will disappear after the transition period.

OBS is now both companies together. OBS as a single entity has more market share than RPGNow or Drivethru EVER had because OBS has united those shares under a single company. Your statement above is false, as are the points that you've derived from it.

 

[Vigilance]

I don't think you quite realize what's going on here. There is no more "RPGNow" as a company entity. There is no more "DriveThru." These are now just operational titles for OBS, titles that will disappear after the transition period.

OBS is now both companies together. OBS as a single entity has more market share than RPGNow or Drivethru EVER had because OBS has united those shares under a single company. Your statement above is false, as are the points that you've derived from it.

Dude.

RPGNow was the only site selling PDFs when DTRPG was founded.

Edit: I'll say this slowly for the reading impaired.

RPGNow at one time controlled the entire market.

100% of it.

But still competition formed, in the name of DTRPG.

Now that DTRPG and RPGNow have merged, they control 90% or so of the market.

90% is less than 100%.

Competition formed then.

Please explain why things are different now.

Chuck