EN World GameStore Closing

[Steve Conan Trustrum]

OBS is a monopoly? I suspect Amazon's ebook and e-doc program will be surprised to hear that. Granted, their ebook selection is pretty lame, and their publisher interaction can only be described as glacial for anyone in a niche... but OBS is not a monopoly. Not by market share, not by competitive advantage.

Amazon's ebook storefront is DEFINATELY behind so far as rpg market share is concerned. I imagine it's not even a blip on a typical e-rpg customer's radar.

And while they're bigger than e23 (and some others), e23 doesn't really feel squeezed by OBS - we sell to a different audience, and so far, nothing OBS has done seems likely to take that audience from us.

But you're only looking at this in one direction: how do the publishers that sell with you think e23 compares to RPGNow and Drivethru? e23 itself doesn't have to feel squeezed for the opinion of publishers such as myself to be truthful when we say e23 isn't competatively comparable to the OBS parent companies, granting OBS a far greater market advantage than e23.

And the fact is, a decent percentage of OBS' audience isn't OBS' audience. It's direct marketing from the publishers - and the publishers decide where to send that audience. Among the many alternative places to send your portion of those sales, there is e23, Lulu's download program, Amazon, and numerous other sites.

But ultimately it's where the customers want to go that's going to set the pace. Customers have repeatedly stated they prefer to get all their shopping done under one account, and that account is most likely to go to the storefront that offers the biggest, most varied selection. None of the ones you've mentioned here come close to OBS.

Publishers have reasonable choices. Customers have reasonable choices. It's not a monopoly.

I'd disagree on what the definition of reasonable you're using means. Shifting all of Misfit Studios' PDF business to one of the alternatives you've listed certainly wouldn't be reasonable because none of those options have comparable benefits to offer my company. Not even close. If I shifted all my business to Paizo or e23, for example, my business would drop dramatically despite shifting all my direct marketing focus to that storefront. However I'd choose to rationalize such a decision as reasonable, the realities of the market would soon prove that it wasn't a reasonable decision at all.

 

[Steve Conan Trustrum]

No Close Substitute: Again, there are several other means for PDFs to be marketed. While argueably OBS will have the best option, it is by no means the only.

As i pointed out with the very real monopoly ruling against Microsoft, I think you're underestimating this fact. The very important part of this term is the word "Close." The two top storefronts have merged and what was likely the third or fourth has become a mirror site for the former two. The remaining companies are WAY behind in their ability to act as a substitute. In other words, they're not close. This creates a possibility of artificially affecting the market.

For example, if OBS decided that it was no longer going to offer M&M Superlink PDFs, it's very likely based on OBS combined market share that most PDF publishers wouldn't bother with such products any more because the remaining substitutes don't offer the amount of sales to make such productions profitable. Similarly, imagine what would happen if OBS went out of business next year--the loss of a top-heavy concentration of publisher focus would prove as damaging to the PDF industry as was Osseum's collapse to so many beloved print companies, only the affect would be much broader. Obviously these are extreme examples, but they do illustrate why consolidating the top of the market into a single focus can be dangerous for the lack of close substitution to immediately pick up the slack.

 

[Natai]

Other consequences

As a new vendor that setup accounts through both RPGNow and ENGS (ENWorld Gamestore), I have yet to release my first product (The projected release date is January 07). I was a little disappointed when I realized that half of the $200 I shelled out to create my vendor accounts was wasted, but it's a fair trade if I can get more sales with the new setup.

Is there going to be a new site for Onebookshelf at some point in the near future? There was a huge difference between the vendor account sites of ENGS and RPGNow. RPGNow's was far more difficult to use and I loved ENGS by comparison. Now all of that seems to be gone and replaced by RPGNow's version. There were also features in ENGS that are not available with RPGNow, like preorder options, sample PDF options, and pretty much the entire method for creating a new product. With ENGS I could more or less have everything setup for my account and products before any of them were ready for release, not so under RPGNow. Is there a possibility of getting the RPGNow site or another upcoming site to be setup more like ENGS for vendors? If so, I am all for it.

I also noticed that, while my company was listed under ENGS it is not under the new merged RPGNow.
:\
Will this merger lead to more options ofr vendors, like other merchandise such as prints, or greater POD options like hardcover? My current plan is to have my book printed by Replica (the POD branch of Baker & Taylor) and then send my books to RPGNow, but I would much rather just have everything handled by the new setup.

 

[Steve Conan Trustrum]

Is there going to be a new site for Onebookshelf at some point in the near future?

They are working on a unified site, but it's months down the road from being launched.

 

[Bardsandsages]

As i pointed out with the very real monopoly ruling against Microsoft, I think you're underestimating this fact. The very important part of this term is the word "Close." The two top storefronts have merged and what was likely the third or fourth has become a mirror site for the former two. The remaining companies are WAY behind in their ability to act as a substitute. In other words, they're not close. This creates a possibility of artificially affecting the market.

Just because the competition does things poorly, does not mean that OBS should drag it's heels and wait for them to catch up. Close does not mean close in service and quality. It means close in format. The fact is there ARE other sources that do the exact same thing PBS does: sell RPG pdfs. That is the bottom line. If I decided to open up a new hobby store in my area that was the size of a department store and offered an arcade, pizza shop, and even game rentals, would I be obligated to say "gee, maybe I shouldn't do all this because the other shop in the area can't afford to compete with me? Guess I'll just open up a little closet like he has to be fair."

 

[Paradigm]

In the short term, the increased rates (not the merger itself, just the rates) will result in some publishers (Phil Reeds, for one) increasing their prices - and others (like Paradign) not. That's not an assumption or concept, that's (at this point) pretty much a fact.

It is a reasonable assumption that some publishers will raise prices because some said they will.
It is also not an unreasonable assumption that some wanted to raise prices and are now given an excuse. (This is pure speculation unrelated to any name mentioned anywhere by anyone)
It is also possible that some folks first instinct to raise prices might me tempered by consideration. I did the math, PCI needs a 16.2% increase in sales to see no impact on our revenue, I think that is doable. A raise in prices will harm the competetive position of the company that does so, unless their PDFs were already underpriced.

 

[BryonD]

Just because the competition does things poorly, does not mean that OBS should drag it's heels and wait for them to catch up.

Exactly.

Also, the Microsoft stuff was so loaded with political baggage as to be virtually meaningless for a case like this. (Not left wing / right wing politics, but more a "stack the deck for the business in my district" politics. Not to derail with that massive issue, but suffice to say that Microsoft is a terribly poor comparison regardless of which side of that case you prefer)

 

[jaerdaph]

So, speaking as a PDF consumer, how does this merger benefit me?

A week ago, I could buy PDFs at the EN World game store and get 3% cash back as an EN World supporter (and substantial discounts from 5% to 10% from certain participating publishers). Two months ago I could buy a PDF at RPGNow and get 5% back (DrivethruRPG too). So while I'm glad to hear many publishers won't have to raise their prices, the price of your products in many cases have still gone up from my perspective.

I'm also concerned about exclusivity agreements. What happens if one of your customers decides they no longer what to do business with the PDF distributor (for whatever reason) you've signed with exclusively? What are their options to buy your product then? (Please note this is a hypothetical and no judgement on anyone on my part.) Is exclusivity worth the risk if you could potentially lose customers?

 

[seasong]

But you're only looking at this in one direction: how do the publishers that sell with you think e23 compares to RPGNow and Drivethru?

Currently, a fair number of them are approaching me and asking about e23's terms (20% commission, non-exclusive, by the way).

With that said, OBS isn't competing with you. OBS is competing with me. If I'm not feeling squeezed, how do they have a monopoly? Regardless of theoretical market advantage - if that was the case, don't you think I would have been just as worried about RPGNow, DriveThruRPG, and ENWorld Game Store?

Publishers follow the customers. But publishers also direct the customers. The market pressure is in your hands, not OBS' hands. OBS just has the advantage of being monolithic - it can exert all of its strength in one direction, and a fair number of publishers will tow the line.

But so can Dell. And plenty of people don't tow the line for Dell, and plenty of publishers won't tow the line for OBS.

But ultimately it's where the customers want to go that's going to set the pace. Customers have repeatedly stated they prefer to get all their shopping done under one account, and that account is most likely to go to the storefront that offers the biggest, most varied selection. None of the ones you've mentioned here come close to OBS.

Reading through the various threads here, I've seen a much wider array of comments, including "Which publishers sell from their own site?" and "Four or five sites, doesn't matter, I'm a few clicks and a bookmark away from being a customer."

That may be the vocal minority. So might your experience.

It's telling, I think, that EN World members have shopped from all of these sites that just merged, and a number of them have shopped from e23. I know that I, personally, have bought products from all of those mentioned except Lulu, and a few that haven't been mentioned. I've never felt a strong desire to have one-stop shopping. Stores that are not malls succeed in the brick-and-mortar world, and arguably there is more effort involved in going to a brick-and-mortar.

And something else to consider is: can they find you on OBS? At last count, we were talking about 400 publishers and 9,000 products.

I'd disagree on what the definition of reasonable you're using means. Shifting all of Misfit Studios' PDF business to one of the alternatives you've listed certainly wouldn't be reasonable because none of those options have comparable benefits to offer my company. Not even close. If I shifted all my business to Paizo or e23, for example, my business would drop dramatically despite shifting all my direct marketing focus to that storefront. However I'd choose to rationalize such a decision as reasonable, the realities of the market would soon prove that it wasn't a reasonable decision at all.

Here, we agree, sort of. I wouldn't suggest anyone drop OBS entirely and shift to e23 (or any single vendor). Well, okay, my greedy, blackened little soul would love it if you did. But I'm not going to suggest it - of the more than two choices available, that isn't one of the reasonable ones.

Here's an example.

Le Baptiste Games (fictional, I hope) currently makes 200 sales per year at OBS, and all of their products are $10. They match e23's audience pretty well, and based on my current estimates of relative market share, they could conceivably make about 20 sales per year at e23.

(This varies by publisher - some publishers make more sales per year at e23 than they do elsewhere, but only a few, and some make less than the tenth implied.)

Le Baptiste Games works to promote their sales, and they used to point at RPGNow. An estimated 35% of their sales on RPGNow were a result of publisher-directed purchases. Here are some sample choices:

Exclusive contract with OBS and direct their traffic to OBS:
* (200 sales) $2,000 x 70% = $1,400.

Non-exclusive contract with OBS and e23, and direct traffic to e23:
* (130 sales) $1,300 x 65% = $845.
* (70 + 20 sales) $900 x 80% = $720.
* total $1,565.

Exclusive to e23 and direct their traffic to e23:
* (70 + 20 sales) $900 x 80% = $720 this year.
* If enough publishers did this, the numbers will change. You have the customer power, remember.

Now, the nice thing about non-exclusive contracts is that e23 isn't the only one out there. Paizo might be able to add a few more sales. Amazon (if you can get through their "customer service") could add quite a few more. Lulu some more. And so on.

But even just having two sites, any two sites, it's worth your while to have a product on both, and to direct traffic to the one that makes you more money per sale.

 

[Bardsandsages]

I'm also concerned about exclusivity agreements. What happens if one of your customers decides they no longer what to do business with the PDF distributor (for whatever reason) you've signed with exclusively? What are their options to buy your product then? (Please note this is a hypothetical and no judgement on anyone on my part.) Is exclusivity worth the risk if you could potentially lose customers?

If someone is so adamant about not wanting to deal with OBS, they can always buy the print versions of my products (which I still sell through Amazon and my own storefront at Lulu.). Print products are not included under the agreement. Honestly, I think this is a non-issue.

The fact is, you can't base business decisions on "what if..." scenarios that, if they actually came to pass, would account for a miniscule percentage of your market. I think once the dust settles, folks who want to buy PDFs will shop at OBS, and people who don't buy PDFs will continue to not buy PDFs. If a handful of people suddenly decide to stop shopping at OBS, oh well. I'm working with the assumption that OBS will go out and attract new customers to the PDF market, not just steal cannibalize customers from other outlets.

So I can worry about losing maybe 1-2% of my existing market base (if that, as not one customer has expressed any worry to us) in exchange for a potential increase in my market base of much more than that.