Puzzled At Drivethru Economics

jsnead

Social Justice Dragon
Validated User
#1
So, Eldritch Skies recently hit Electrum best seller on Drivethru. It's making money, and from what I've heard Gold and (especially) Platinum best sellers make lots of money. However, games that sell this well (Electrum, Gold, and Platinum best sellers) make up less than 4% of all games on Drivethru. So, what about the rest? The last I heard, Copper best selling games only need to sell around 100 copies, which basically means they make almost no money, and the more than 75% of all games on Drivethru that aren't even Copper best sellers sell even less than that. Clearly everything less than a Silver best seller is an utterly dismal failure, at least financially.

In any case, what I wonder about is the Silver best sellers. I know for a fact that Silver best sellers don't make much money and yet many moderate-sized professional RPG companies have a number of books that are Silver best sellers. Is it really true less than 4% of games on Drivethru actually make a profit and that moderate sized professional RPG companies have a number of books that barely break even? Am I missing something?
 

Critias

Social Justice Galliard
RPGnet Member
Validated User
#2
Don't forget that Drivethru, for all that it's awesome, isn't the only place that sells most of these books (particularly when it comes to professional companies with lots of books).
 

Pete Nash

Swordsman and writer
Validated User
#3
In any case, what I wonder about is the Silver best sellers. I know for a fact that Silver best sellers don't make much money and yet many moderate-sized professional RPG companies have a number of books that are Silver best sellers. Is it really true less than 4% of games on Drivethru actually make a profit and that moderate sized professional RPG companies have a number of books that barely break even? Am I missing something?
The amount of profit is not solely dependent on number of sales, but on the price of the product too. It matters little if you have a platinum seller but are only selling it for a dollar, which if you are a professional publisher, won't even cover your art budget. Conversely, selling via Drivethru guarantees you a much, much larger profit margin than if you try to print and distribute via traditional methods. It effectively cuts out several layers of middle men who all take their slice.

So do companies produce books that barely break even? Yep. Welcome to the world of professional RPG publishing. Why continue that model? Well if you produce a large number of silver sellers, the fractional profits will add up to a moderate overall one. Additionally, if its supporting material for your primary system, you might increase the market for your core rules.

The truth of the matter is that the market is fractured and money is tight. Most moderate-sized RPG companies are either cottage industries supporting a handful of people, or are simply dedicated folks running it on the side of their real profession. In some cases the only economically viable way to produce and distribute is via ebooks.
 

chromeharlequin

Registered User
Validated User
#4
So, Eldritch Skies recently hit Electrum best seller on Drivethru. It's making money, and from what I've heard Gold and (especially) Platinum best sellers make lots of money. However, games that sell this well (Electrum, Gold, and Platinum best sellers) make up less than 4% of all games on Drivethru. So, what about the rest? The last I heard, Copper best selling games only need to sell around 100 copies, which basically means they make almost no money, and the more than 75% of all games on Drivethru that aren't even Copper best sellers sell even less than that. Clearly everything less than a Silver best seller is an utterly dismal failure, at least financially.

In any case, what I wonder about is the Silver best sellers. I know for a fact that Silver best sellers don't make much money and yet many moderate-sized professional RPG companies have a number of books that are Silver best sellers. Is it really true less than 4% of games on Drivethru actually make a profit and that moderate sized professional RPG companies have a number of books that barely break even? Am I missing something?
'making money' isn't just about cash flow in. It's also about expenditure, and the way that drivethru makes small numbers of sales viable.

lots of the smaller products on Drivethru appear to be basically labour-of-love creations. They're the sort of material that might also have been posted on a website for free, or even submitted to a fanzine back in the day. I'm thinking 3-page descriptions of an NPC, or a sketch, or a short adventure path. I'm guessing a lot of these creators are not depending on these publications for their sole income. Without drivethru (or similar), they would make zero money. With a couple of drivethru sales, its a couple of paid for beers. Sort of "I made this for myself and my group, might as well put it online and see if anybody else wants to pay me money for it." They'd be a financial failure if they were a traditional business, but I suspect that lots of them aren't.

In another case, companies like White Wolf have already paid the costs for producing the large number of older supplements they now have on drivethru. Any additional sales are again, additional revenue at very little cost, making it worth putting them up there even if they don't hit stellar sales.

Then there's the idea that different companies will have a different focus upon print vs pdf, how they distribute and make a profit on those. Some of your 'moderate sized professional RPG compaines' might still have a business model that's basically focused upon print books. I'd feel less confident making any grand claims about this area.
 

bottg

Registered User
Validated User
#5
So do companies produce books that barely break even? Yep. Welcome to the world of professional RPG publishing. Why continue that model? Well if you produce a large number of silver sellers, the fractional profits will add up to a moderate overall one. Additionally, if its supporting material for your primary system, you might increase the market for your core rules.
This. I have 60+ Silver products and 22 electrums at the moment, with 169 products in total. None of them tend to sell huge numbers per month, but you add them all up and i do ok from the site.
 

NJW_games

Game designer
Validated User
#6
Clearly everything less than a Silver best seller is an utterly dismal failure, at least financially.
Wow, that's a dire viewpoint. I consider anything that gamers are interested in to be a success.

My game hasn't sold by the bushel (about 40 copies sold so far), but it's sold far more than I originally hoped for (I originally told myself I'd consider it a success if it sold ten copies). Like a lot of RPG designers, publishing it was more about getting my vision out there than trying to retire on my publishing income. It'd be nice if it sold more, of course, but I've never been under the illusion that my game was going to be the next D&D.

It would certainly be nice if RPG publishers had better incomes, but at the same time I don't think it's fair to say anything that doesn't rake in the dollars is a "failure".
 

DisgruntleFairy

Active member
Validated User
#7
I have a friend who works in a industry that shares a lot of the Drivethrurpg business model (its streaming pornography if your curious). He explained the industry this way... The start up costs are pretty steep but the operational costs once the system is working are actually very low. Due to the relatively cheap (from a business perspective) rates of storage and bandwidth for distributing content isn't actually terribly expensive once you pass a certain point. The problem is of course getting to that point in sales. So the way to fix that is to get as much content up as possible. The price of keeping it on-line indefinitely and sale-able is so low that only selling it a relatively small number of times pays for its continued indefinite existence. After that your not making a ton of money off of it but your making a very small amount of money off of it every time it sales after that. Those very small transactions add up to a comfortable profit.

Then from time to time you have a hot pdf that sells a ton. Those make a ton of money by selling in large volume and likely they make a larger profit for you than others per sale but thats a whole other side to the conversation.

But the core of the issue is that for a company like Drivethru storage and bandwidth is so cheap that it takes very little sales for them to break even on their initial investment per pdf. Assuming they share the same kinda business model which they certainly seem to be.
 
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Reverend Keith

I was a friend of Jamis
RPGnet Member
Validated User
#8
So, Eldritch Skies recently hit Electrum best seller on Drivethru. It's making money, and from what I've heard Gold and (especially) Platinum best sellers make lots of money. However, games that sell this well (Electrum, Gold, and Platinum best sellers) make up less than 4% of all games on Drivethru. So, what about the rest? The last I heard, Copper best selling games only need to sell around 100 copies, which basically means they make almost no money, and the more than 75% of all games on Drivethru that aren't even Copper best sellers sell even less than that. Clearly everything less than a Silver best seller is an utterly dismal failure, at least financially.
That's because the RPG industry is primarily comprised of vanity presses, as well as a very small number of business that occasionally makes a profit here and there.

PDF publishing (via Drivethru, e23, or whatnot) simply makes this even more noticeable by lowering the bar so low that anyone with a word processing program that can print-to-PDF can be a manufacturer.
 
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Adam

Posthuman
Validated User
#9
Also bear in mind that the various "Metal" levels are calculated differently for each site; the list on DriveThru is distinct from the list on RPGNow (and the other sub-sites that OBS hosts). So appearance on those lists isn't a slam-dunk indicator of how well something sells.

(This is why publishers shouldn't link to both DTRPG and RPGNow -- pick one and promote it only, and you'll rank more highly on the metal and top X seller charts. If you divice your promotion/sales between the two, you'll have a much harder time hitting any of those peaks.)
 
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CardinalXimenes

Registered User
Validated User
#10
So, Eldritch Skies recently hit Electrum best seller on Drivethru. It's making money, and from what I've heard Gold and (especially) Platinum best sellers make lots of money. However, games that sell this well (Electrum, Gold, and Platinum best sellers) make up less than 4% of all games on Drivethru. So, what about the rest? The last I heard, Copper best selling games only need to sell around 100 copies, which basically means they make almost no money, and the more than 75% of all games on Drivethru that aren't even Copper best sellers sell even less than that. Clearly everything less than a Silver best seller is an utterly dismal failure, at least financially.
It depends on the production cost. One of my best-selling books cost me precisely $50 to make. I could've amortized that production cost with approximately eight sales- and one of the reasons I only spent $50 on art for it was because I did not particularly expect to sell more than fifty or a hundred copies of it. Of course, that values the time I spent writing it at zero dollars, but there's nothing in the world so cheap as an entrepreneur's labor. In terms of net profit over approximately two years, that $50 investment has earned me about $3K. So long as I can keep my production costs down by a couple orders of magnitude from what a conventional publisher might require, I can turn a perfectly decent profit even on sales that would get an entire genre canned at a conventional publishing house.
 
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