EN World GameStore Closing
- Thread starter Morrus
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trancejeremy
Adventurer
Urizen said:
No, he didn't. He said "we publishers", implying that he was speaking as a publisher. When in fact, he's an employee of RPGNow as well as a publisher.
This is important because you have him in direct conflict with another actual publisher, who doesn't seem nearly as happy.
Which one is more credible? I'm not saying that him working for RPGNow makes him a "shill", to use his word, but he should have identified himself as such before commenting on a thread like this, IMHO.
And the whole thing matters because this a very tiny industry, and fans of small companies will want to support companies they like in a way that provides them with the most revenue. One of the greatest things about d20 is that there have been dozens of companies spring up with great new products. Unfortunately, the sad thing is, so few actually make back the money or effort that was invested with it. (Heck, the same can be said for RPGs in general).
And by putting public pressure on this new fangled conglomerate, it's possible they might be forced to reduce their rates to the old levels.
Or maybe not. If I were a conspiracy theorist, I could speculate that this is simply a plot by White Wolf (the owners of DTRPG, or rather, the same person owns both) to drive out the competition by making it unprofitable for the little guys to compete...
jgbrowning
Hero
GMSkarka said:
Or a programmer. Programmers cost a lot - I should know as I am one.
Last edited by a moderator:
Mark CMG
Creative Mountain Games
GMSkarka said:
I'm going to venture a guess that he has been a Gold Vendor long enough that his percentage fee is 25% and that he saw that the new Royalty Payment for non-exclusive vendors was going to be 65% (not the fee but the royalty) and has mistakenly called this the 40% loss he is predicting.
*edit* Or am I mistaken, Joe?
jgbrowning
Hero
GMSkarka said:
My rate is 25%. I've been a Gold Vendor for a long time. I wouldn't be surprised if some vendors are at the old non-gold vendor rate of 20% if they've been there as long as I have.
Those who have been there longest are getting screwed even harder.
joe b.
jgbrowning
Hero
Mark CMG said:
Moving from 25% to 35% is an increase of 40%. I won't be losing 40% of my profits. I'll be losing around 9-10% of my profits, however the new site will gain 40% more profit from me simply by raising their fee.
I don't understand why a weighted fee wasn't used. Actually I do. A weighted fee wouldn't result in a 40% increase in the new site's income the day of launch compared to the older site's. It would result in maintaining the same income while also benefitting from the merger's economy of scale (one site down from two). And under that, any "new growth" this site is supposed to create above and beyond the growth experienced by DTRPG and rpgnow.com independantly would be immediatly passed on to the publishers and the site would make more as well from the increased traffic.
Using a weighted fee I would bepaying 27% across rpgnow.com and DTRPG. The 9% vrs. 7% descrepancy comes from notincluding ENGamestore in the math.
If they wanted to charge me 3% for the larger site access (and I'm not sure about that because I already am at all the sites, so I don't know what "additional" access I'm getting) and for the convience factor I wouldn't be too adverse to such a thing.
Let's be realistic. James and Steve are going to probably make at least 20% more from this site simply by taking the profits out of the publishers hands. I'm talking about $20,000 or more over a year's period.
The products I've already uploaded aren't going to save me any time, are probably not going to have more people look at them since I was on all three sites, but they're going to make me about 9-10% less per sale now.
joe b.
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HinterWelt
First Post
Heck, I haven't been there as long as you Joe and I just squeaked in at 25%.jgbrowning said:
Bill
jgbrowning
Hero
Mark CMG said:
I already have access to the rpgnet crowd via DTRPG direct linking. Perhaps there will be a slight increase from running a mirrored site, but I doubt it given I've already been advertised and directly linked to there by DTRPG.
joe b.
JohnNephew
First Post
Over the past couple of years, a lot of publishers were persuaded by an argument like this: "Why not use DTRPG as well as RPGNow? Sure, we get less money from each sale," they said, "but it's extra money for no extra effort!"
The answer to "why not" is the same answer you get when you ask "Why shouldn't I discount to some customers? I'll get extra sales today, and I've already broken even on the ones I sold at full price."
The answer is that the people paying full price say next time, hey, we want that deal too! Or, because as middlemen the "full price" folks are at a competitive disadvantage (either because they have to charge more than the people you give the deal to -- like Walmart vs. local shops -- or because they don't have as big of profit margins to reinvest in their business), they suffer business declines and can afford to buy less from you at full price anyhow.
It hurts to have to pay more now to both, but the publishers had to see it coming. Signing on with DTRPG was telling the other PDF distributors "you can charge us more". You can be sure that OBS will be able to charge yet more in the future -- after all, the extra margin will allow them to grow the business, which will justify an even bigger margin. (Would you rather get 50% of 200 sales or 65% of 100 sales? Besides, you can still sell it on your own website, so those extra sales are just free money, sales you could never make yourself without the big site's reach.)
DTRPG has played this very well -- first attracting some big publishers with the soothing assurances of DRM, to get their toes in the PDF pool (and holding on to them with exclusive contracts at the start); then attracting the independent PDF players with the promise of incremental revenue, per the argument above; and now merging with their biggest competitor. Just like when eBay hikes its fees, there will be grumbling, but almost all of the frogs will stay in the pot, as it were, because it still looks better than the immediate alternative.
The cherry on top of it all is that OBS is turning publishers' reasonable fears of future commission increases into another benefit for themselves, by offering publishers the chance to lock down today's rate for a term of their own choosing with an exclusive contract. The more publishers who hedge against future rate changes by writing long durations, the harder it will be for any serious competition in the market to take hold and forestall those increases or reverse the trend. (They make it easy to sign the exclusive by letting you sell on your own site -- because those sales won't be a threat to them like a rival aggregate site offering dozens or hundreds of publishers could be -- the kind of threat that DTRPG and RPGNow offered each other as rivals.)
But if you're a publisher, what can you do, given how much of the market these two sites represent today? Even if you weren't lured in by the siren call of incremental sales, your fate was decided by those who were. Most of your sales probably come from one or both of these sites. The rational thing to do is to submit to the changes, and hope that the promise of bigger total revenues in the end is delivered. In order to resist the changes there would have to be a massive rejection of the merger by many publishers, changing the numbers for OBS to the point where they would calculate that they would make more revenue in the end by retaining all the publishers, even while taking a smaller cut from each (after all, the added cost of having those extra items in their catalog is trivial, so if you can have them in the OBS catalog it's like extra money for no extra effort). Given the number and size of publishers necessary to change that equation, is highly improbable that such a thing will happen.
-John Nephew
President, Atlas Games
The answer to "why not" is the same answer you get when you ask "Why shouldn't I discount to some customers? I'll get extra sales today, and I've already broken even on the ones I sold at full price."
The answer is that the people paying full price say next time, hey, we want that deal too! Or, because as middlemen the "full price" folks are at a competitive disadvantage (either because they have to charge more than the people you give the deal to -- like Walmart vs. local shops -- or because they don't have as big of profit margins to reinvest in their business), they suffer business declines and can afford to buy less from you at full price anyhow.
It hurts to have to pay more now to both, but the publishers had to see it coming. Signing on with DTRPG was telling the other PDF distributors "you can charge us more". You can be sure that OBS will be able to charge yet more in the future -- after all, the extra margin will allow them to grow the business, which will justify an even bigger margin. (Would you rather get 50% of 200 sales or 65% of 100 sales? Besides, you can still sell it on your own website, so those extra sales are just free money, sales you could never make yourself without the big site's reach.)
DTRPG has played this very well -- first attracting some big publishers with the soothing assurances of DRM, to get their toes in the PDF pool (and holding on to them with exclusive contracts at the start); then attracting the independent PDF players with the promise of incremental revenue, per the argument above; and now merging with their biggest competitor. Just like when eBay hikes its fees, there will be grumbling, but almost all of the frogs will stay in the pot, as it were, because it still looks better than the immediate alternative.
The cherry on top of it all is that OBS is turning publishers' reasonable fears of future commission increases into another benefit for themselves, by offering publishers the chance to lock down today's rate for a term of their own choosing with an exclusive contract. The more publishers who hedge against future rate changes by writing long durations, the harder it will be for any serious competition in the market to take hold and forestall those increases or reverse the trend. (They make it easy to sign the exclusive by letting you sell on your own site -- because those sales won't be a threat to them like a rival aggregate site offering dozens or hundreds of publishers could be -- the kind of threat that DTRPG and RPGNow offered each other as rivals.)
But if you're a publisher, what can you do, given how much of the market these two sites represent today? Even if you weren't lured in by the siren call of incremental sales, your fate was decided by those who were. Most of your sales probably come from one or both of these sites. The rational thing to do is to submit to the changes, and hope that the promise of bigger total revenues in the end is delivered. In order to resist the changes there would have to be a massive rejection of the merger by many publishers, changing the numbers for OBS to the point where they would calculate that they would make more revenue in the end by retaining all the publishers, even while taking a smaller cut from each (after all, the added cost of having those extra items in their catalog is trivial, so if you can have them in the OBS catalog it's like extra money for no extra effort). Given the number and size of publishers necessary to change that equation, is highly improbable that such a thing will happen.
-John Nephew
President, Atlas Games
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