The 5 'Tiers' of TTRPG Publishing

Cannibal Halfling Gaming published an interesting article recently in which they divided tabletop roleplaying game publishers into five tiers, based on annual revenue. Here were their categories, but you should check out the article for a deeper dive.

~$500 million annual: D&D
~$50 million annual: Paizo
~$5 million annual: Steve Jackson Games
~$500K annual: Evil Hat Productions
~Everyone else (up to $100K)

They chose one example publisher per tier; they didn't list every TTRPG publisher. That's why your favourite publisher is not on that list of 4 companies. But feel free to add to the list!

Also, we talked about it in last week's episode of Morrus' Unofficial Tabletop RPG Talk, for those who prefer to absorb their news in video format!

 

[Morrus]

For KP's business model, it's currently working for them by having most of their products come out as Kickstarters first so they can, essentially, do a preorder to cover production costs of the books and VTT conversions.

That’s pretty standard for mid and low tier publishers. There are exceptions, of course, but it’s certainly our model, and the model of many of our fellow smaller publishers.

 

[FitzTheRuke]

For an interesting side-note, my FLGS makes ~$500k in revenue pretty consistently.

And profits enough to feed a family of four. I have 5 part-time employees, too.

(I should mention that only 40% of that is Games. The other 60% is Comics).

But, yeah - revenue is not profit.

I like to joke, "I make half a million a year! Too bad it costs so darn much to do it!"

 

[Gradine]

Mainly the timeline. I expected that to start in 20 years, not imminently.

I laugh react only because I cannot both laugh and sad react, and you already had a sad react so I had to balance it out

 

[Morrus]

So what's the actual answer (within an order of magnitude?)

Same region as Evil Hat. Ish. Revenue speaking, of course. We have a lot of revenue streams—Kickstarter, our store, DTRPG, distribution, Patreons, even a license or two, etc. It was much higher during the pandemic, for reasons the tabletop industry has discussed at length many times.

 

[djotaku]

That’s pretty standard for mid and low tier publishers. There are exceptions, of course, but it’s certainly our model, and the model of many of our fellow smaller publishers.

I'm relatively new to the space - somewhere around 5 years, but one of the interesting things I noticed with KP - their older stuff is Pathfinder. (Maybe during the years when PF seem ascendent compared to D&D?) And they recently had a customer survey where they asked if people would be interested in Daggerheart modules from KP. At the same time they have ToV (which I love) and continue to support with the advantage that it is broadly compatible with D&D (to the level where their Northlands Kickstarter was released in both a D&D and ToV edition - and I expect the only real difference will be the subclass section).

In the mid-to-low tier - how many people are doing their own thing vs making modules for others? (Or a mix - as in the case of KP) I wonder if there would be an easy way to quantify. Also, how many are making for multiple systems? Like Legendary does a lot of Kickstarters that are 5e & PF1e. I've seen more and more people on RPGdrivethru who are making for both D&D and Black Flag (ToV's SRD-eqiv). Are they also making for A5e? And so on...it's a fascinating industry where some people (Evil Hat, I think) are licensing out their engines. Others are mostly making modules/supplements for someone else's game. And some are making their own thing. (Or all of the above)

 

[Morrus]

In the mid-to-low tier - how many people are doing their own thing vs making modules for others? (Or a mix - as in the case of KP) I wonder if there would be an easy way to quantify. Also, how many are making for multiple systems? Like Legendary does a lot of Kickstarters that are 5e & PF1e. I've seen more and more people on RPGdrivethru who are making for both D&D and Black Flag (ToV's SRD-eqiv). Are they also making for A5e? And so on...it's a fascinating industry where some people (Evil Hat, I think) are licensing out their engines. Others are mostly making modules/supplements for someone else's game. And some are making their own thing. (Or all of the above)

I can’t really answer that other than anecdotally how it seems to me.

There’s a lot of original stuff on places like itch.io by small independent creators. Tons of it. Games of every flavour you can imagine. Lots of creativity there.

The stuff that the low-mid tiers seem to do has a lot of 5E or 5E adjacent stuff in it. That includes our own stuff like Level Up. Not exclusively, of course; there’s non-5E stuff there too like Evil Hat with Fate, Cubicle 7 with Warhammer. Certainly the million dollar crowdfunding club is dominated by 5E stuff.

A bit larger you see more independent systems again. You get licensed stuff like Modiphius and Free League specialise in and legacy stuff like Call of Cthulhu. Plus you have your breakout crowdfunding stars like MCDM.

Then right at the top we’re back to D&D followed by Pathfinder, a variant of D&D (though Pathfinder is moving away from that with its latest edition).

That’s all anecdotal though. I haven’t looked into it. I might be way off base!

 

[Whizbang Dustyboots]

Something else to consider when putting companies in tiers...

First, as Morrus said, revenue is not profit (revenue is vanity, profit is sanity).

If you see a company relying on licenced products, you can knock off 10% from their revenue straight away.

Second, see if you can find out how many staff they employ. Some of the companies mentioned, I know, have truly eye-watering monthly salary bills. The reason Mongoose can do the cool things is that our core running costs are low, and we have a smaller headcount than usual - all our admin, for example, is either automated or gets spread around the creatives (when you mail customer service, you are talking to one of the designers or graphic artists ).

We do that because the salary of the extra one or two admin people a place of our size would normally employ gets spread around everyone else.

Once you start getting about the 25-30 mark for number of employees and you are not selling as many books as Paizo or WotC, it is kind of like being strapped to the front of a speeding train (speaking from experience) to the point you must release something every month or sink.

And I don't know, I never found that much fun. It is a very easy trap to fall into though because running a company has a lot in common with gaming (all about the min/maxing ). It is easy to get diverted and forget why you are doing this in the first place.

As I say, vanity and sanity. Revenue is not a great measurement of company health, or even position in the market if things are not sustained.

I have always appreciated your transparency, @Mongoose_Matt. Thank you.

 

[Whizbang Dustyboots]

I think the vast majority of RPG creators fall into that category and, as always, thank you so much for your contributions to this whole hobby!!!

Some days, it seems like @Dyson Logos is carrying most of the fantasy RPG industry on his back. If there's a lifetime achievement award in this space, he deserves it.

 

[SlyFlourish]

Certainly the million dollar crowdfunding club is dominated by 5E stuff.

Is that still true over the past year?

 

[Thomas Shey]

I'm a little curious how many companies there are that land in Tier 2 with Paizo there. I'm assuming Tier 1 is a group of one.