Predictions of the d20/gaming Industry

[Thorin Stoutfoot]

video game industry

I got my information first hand. I worked at a company at the height of the dot com boom that had relationships with Blizzard, Westwood Studios, iD, and a host of other game companies to put their games on-line. (Some of you may remember the John Carmack Ferrari give-away --- we did that)

I was a manager on the engineering side of that, so I got a good look (and visited lots of game companies) at the game side of things without having to put up with a crummy salary.

Most of the games to be honest, weren't engineered really well, and in many cases when we looked at the source code, cursory inspection would find lots of bugs right away. It was endemic of the industry --- they paid for $18,000 programmers, and they got their moneys worth. They make up for it with exceedingly long QA cycles (in the quality-oriented companies) or lots and lots of patches (in others). (Look at the current state of the video game industry and you'll know what I mean --- hardly any game ships without a few patches immediately needing to be issued)

 

[Erik Mona]

>>>
Originally posted by Sulimo
I just hope we dont see an end to non-D20 gaming. It will be a very sad day if this comes to pass imo.
------------------------------------------------------------------------
Alan said:
Unfortunately, I think too much of a price boost would push things in that direction.
>>>

Wouldn't it then be incumbent upon the non-d20 publisher to make his personal game system enticing enough to survive even in a d20-saturated environment? If a game is not competitive, do the market leaders (in this case people publishing d20 products) "owe" it to the consumer base to take a cut in their profits (by keeping prices low) so that less lucrative, less appealing products have a better chance at survival?

I don't know the answer, but I think it's important to ask.

--Erik

 

[Tuerny]

Re: video game industry

I got my information first hand. I worked at a company at the height of the dot com boom that had relationships with Blizzard, Westwood Studios, iD, and a host of other game companies to put their games on-line. (Some of you may remember the John Carmack Ferrari give-away --- we did that)

I see. Thanks for the info.

::changes his major back from Digital Media: Computing in Media to Comptuer Science::


Jesse Dean

 

[Psion]

Wouldn't it then be incumbent upon the non-d20 publisher to make his personal game system enticing enough to survive even in a d20-saturated environment?

You make that sound so simple. It's not exactly like independant game companies are currently NOT trying to make their games enticing.

(Or is it? I get the impression that many games released in the past few years have been put out to make a statement first and have broad customer appeal second. At any rate most of these "art" games turn my stomach and I won't miss them. I would name names, but I don't want to give them any press. )

 

[RyanD]

Re: oh, why am i posting again???

Now the question to Ryan, Monte, Erik, etc. is, what do you believe is the extranality that causes publishers to not make the 'rational' pricing choice?

You have just asked one of the Great Questions. Good work.

I have some opinions on the matter which may surprise you.

First, I will state that I do not believe that either TCGs or miniatures are currently suffering from illogical pricing. Both markets have publishers who are charging a price premium for strong brands at the top, and a number of competitors who are trying to undercut them on price, or quality, or service. That is what I consider a "normal" market, using "logical" pricing. In addition, I see no signs that any of the high-priced, marketshare leaders in either category will change strategy - that is, they will continue to raise prices as they believe necessary and possible to maximize profits.

So the rest of my comments are directed at RPGs, where I feel that there is still a strong element of illogical pricing in the mix, and it remains unclear if the marketshare leader(s) will continue to pursue a logical pricing strategy.

I will also issue a caveat to my following comments regarding the pricing of the 3e core books. A case can be made that they are "illogically" underpriced at US$20. There was a logical strategy to that price point (one I believe is still stronger than the business case to take the price up to US$30, in fact), which I will not consume anyone's bandwidth explaining again.

I think the answer is that until recently, most publishers believed consumers when they were told that higher prices would impact sales. Personally, I think that many publishers believed those consumers because in their heart-of-hearts, they sympathized with them; higher prices would reduce the total number of different products a publisher could personally afford to buy.

My experience is that until recently, most publishing companies were run by people who didn't have an interest in marketing or business management. They were content to stay within the envelope TSR defined for RPG prices. The idea that their products were illogically priced was literally inconceivable to a lot of publishers. In fact, many publishers believed that by lowering prices, they could generate more sales (all evidence to the contrary). There are still publishers who trumpet the fact that their products are cheaper than the competition, despite the fact that nobody has ever demonstrated a link between lower prices and increased unit volumes in the RPG market.

The business is changing fundamentally as we have this dialog. Publishers are beginning to recognize that the size of their player network has a bigger impact on how many units they can sell, and at what price, than any other factor. Big networks sell more units, and charge higher prices (and have much better businesses, paying staff more money, which allows the publisher to retain talent longer, which allows them to create better products, which allows them to grow their networks and thus charge more money, etc...) Small networks sell fewer units, charge lower prices, and often die fairly rapidly.

That change in the market is a force working to restore some rationality to pricing. As a result, prices are finally going up, and consumers are following those pricing changes without significant impact. Each time a new price threshold is breached without price becoming a major sales limiting factor, it creates a new ceiling for all the smaller network games to move up under. In this sense, the rising tide is lifting all boats. The "conventional wisdom" about RPG pricing has been blown up, and now market forces, rather than misconceptions and personal self-interest are determining price points.

However, the whole house of cards (pardon the mixed metaphor) could come tumbling down. Until enough time has passed to demonstrate that the higher price points are stable, there will be a tendency for publishers to drop prices in reponse to slowing sales. If the industry goes through a recessionary cycle, and publishers react with price cuts, much of this ground could be lost. It will take several years for a new "conventional wisdom" to assert itself, and for customers to stop noticing $40+ price points as "unusual". In some sense, getting through this period of adjustment is more important to the long term health of the RPG business than any other single factor.

 

[Erik Mona]

>>>
as an employer, i salute you. you must be a great guy to work for, and i'm sure you do the most you can for your employees. but asking me to care about them is, as i said, not very fair. and, it's not my job to make sure they are paid fairly, either.
>>>

Stannis, I'm trying to understand your point of view.

Do you consider game designers more akin to novelists or musicians or artists, or do you consider them more like sweatchop or factory workers?

I have to assume you have a favorite fiction author, perhaps someone whose ideas you usually enjoy, and who generally keeps you coming back for more. Do you so casually disregard that author's welfare, knowing that whatever fiction that or other publishing companies churn out after he's gone will be of a similar quality? If not, I wonder if you could explain why.

Thanks,

Erik

 

[King_Stannis]

Re: Re: oh, why am i posting again???

...However, the whole house of cards (pardon the mixed metaphor) could come tumbling down. Until enough time has passed to demonstrate that the higher price points are stable, there will be a tendency for publishers to drop prices in reponse to slowing sales. If the industry goes through a recessionary cycle, and publishers react with price cuts, much of this ground could be lost. It will take several years for a new "conventional wisdom" to assert itself, and for customers to stop noticing $40+ price points as "unusual". In some sense, getting through this period of adjustment is more important to the long term health of the RPG business than any other single factor.

i think i have a perfect test case for you, then.

perhaps you could find out about "arms and armor" from bastion press. it's, if you didn't already know, a nice looking full-color softcover (96 pages) of new types of (big surprise) arms and armor. it has received pretty good reviews but for one thing: price. almost every review i've seen mentions its $25 price as one thing working against it. i, myself, have held this item in my hand with more than $25 of discretionary income available. i am one of the most impulsive buyers around. and after weighing the decision for 10 minutes on two separate occasions, i still couldn't justify buying a slightly above average product for that price and page count.

however, if it had been more in line with other supplements - even $20, i might have bit. it was just too high. i think you're going to find alot of people coming to that conclusion unless the game companies act as some sort of cartel, and there is no other option.

 

[King_Stannis]

...I have to assume you have a favorite fiction author, perhaps someone whose ideas you usually enjoy, and who generally keeps you coming back for more. Do you so casually disregard that author's welfare, knowing that whatever fiction that or other publishing companies churn out after he's gone will be of a similar quality? If not, I wonder if you could explain why.

Thanks,

Erik

to answer your question, erik, i do disregard author's welfare when i buy a piece of fiction. just as you disregard the welfare of the teenager behind the counter when you order a big mac and pay a relatively cheap price (despite the teenage making minimum wage). or the car salesman when you bargain him down on your new car (which could affect his commission and his well-being). turn the situation around and distance yourself from it, and you will find that when it comes down to it, you probably don't care about a great many things you buy.

now, will i pay a premium for, say, grr martin as compared to other authors? yes, probably - so long as it's not outrageous. in the same respect, if i want to read a marginal author, say someone who pumps out rpg fiction, i will not pay a premium for them. i will pass and pursue other options if the price is what i deem to be too high.

i don't think, after all this, we are too far apart. i think what you are getting at is - "will you pay a premium for quality work"? my answer is, as long as it's not outrageous, probably. i don't think that all products are in need of a hike, however. niche and borderline products that raise their prices will, in my opinion, lose out most likely. Charging $15 for a 32 page adventure which is average quality is too much, imho.

 

[kenjib]

The analogy to musicians, novelists, and other artists is interesting to me. Those industries all operate on a different business model. The publishers earn a steady income by averaging out wins and losses across several artists. Most artists do not make a living wage, whereas a very small percentage of the workforce earns an obscene amount of income. There is a tremendous gap - a deadzone - between these two extremes.

It seems apparent from this discussion that one of the goals of raising prices is to reduce the quantity of output in favor of quality, which would also have the effect of refocusing of the revenue streams into a smaller number of hands. Would a much greater disparity in income emerge between different writers result from such an outcome? Will the line between publishers and authors start to become more well defined? I know that one of the complains in the industry seems to be that until recently RPG authors do not get the name status that artists in other industries do. This changing dynamic just seems to dovetail into a bigger disparity between the income of different authors. Could something like the big 6 (is it still 6 these days?) in the record industry emerge from the publishers, with extensive control over the distribution channels and market access?

Of course we're dealing with a massively smaller market because of the limited demographic, so the scale will be much smaller, but is this the direction that things would head under this new direction?

I don't have the background to make such a call myself but the thought crossed my mind and I'm interested in what some people with more knowledge might think about this.

Are we talking about bringing more revenue into the industry as a whole or are we just talking about shuffling it into a smaller number of hands? Are people going to spend more on product or are they just going to buy fewer products of higher quality and cost. I don't see any clear indication one way or the other on this point. King Stannis pointed out that a person might now only buy two books instead of three. Ryan Dancey replied that this is okay because the overall revenue generated might still be more and the products could be higher quality. I supposed it's hard to tell whether or not this will indeed happen though.

I will say one thing from an anecdotal perspective. I was looking at the FRCS. If it was cheaper I might have bought it just for the read (I'm not going to use it) because the great production values were very enticing, but in the end I decided not to buy it and price was definitely a factor for me. The same thing is happening with CoC now. In addition, I only want to buy one of the following: Seas of Blood, Seafarer's Handbook, Broadsides. If the price point was right for me I would likely buy two or even all three of them but as it stands I'm only getting one. I have also seen people talk about not being able to buy something because they ran out of budget for that month, or keeping lists of eventual purchases across several months, etc.

 

[Flexor the Mighty!]

Then those books had better not be so shoddily made as to be falling apart within months of being bought. The whole argument people have to justify books being worth the expense is that the book will be around in a few decades, at least. We saw complaints soon after publication of books starting to come apart, and now even the books I take care of quite well are starting to show signs of disintegration.

That's why I think that electronic distribution may ultimately win out, over the long haul. One can get the electronic version, print it out, and when it starts to look bad, one can print out a fresh, clean copy. Of course, this is predicated upon printers and print cartridges becoming less and less expensive, which isn't too much of a stretch - especially when talking about decades of time.

Exactly. I'll be either converting the MM to a binder or buying a new one inside six months. The binding is HORRIBLE! When I pull a 1977 copies of the PHB, DMG, MM, & MM II that survived 15 years of gaming with PERFECT binding I think that 30 bucks is waaaay to much for a new WOTC book.