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Game Price?

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JPOG
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Joined: 12/31/1969

I know it depends on print runs and this and that but basically, if you're self-publishing, say you're selling you know maybe a couple of games off your site or ebay or something, no pressure, no advertising blitz - what is the consideration for profit, in contrast with your cost?

Say I have a game that I have decided will cost me $2.50 for everything in it, dice, paper booklets, box, etc.

I know I can charge between $1.50 to $2.00 for shipping, since it would have to weight more than 5 oz (which it won't) for it to be more.

So if I sold the game at MY cost and shipped it, the minimum total would be $4.00 including first class shipping anywhere in the US and I would make NO money. So...

How much DO I add in to the "Profit" factor to get a price that is within reason but actually gives me some practical profit? I've heard that most retail sales in general (not games in particular) are aimed at doubling or tripling your investment/production costs, so I would charge $5.00 ($2.50 x 2) to $7.50 ($2.50 x 3)?

And what if I DID want to try to sell a few copies to my FLGS? I have read here where they expect to buy at the wholesale or close price, and then they mark it up, so how much do you mark up your game overall to begin with for retail sale, so that you can come down and still make money off the wholesale price?

My example is a dice game I have with a small 6 page 8.5" x 5.5" booklet, 12 dice, two 8.5" x 5.5" cardboard playmats and probably 10-20 extra "character record" sheets - my cost for all this is between $2.50 and $3.00, so how much would I sell it off a website for, so that if needed, I could also sell it cheaper to the game store and not lose money?

Thanks for any replies.

TargetBoy
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Joined: 08/13/2008
Pricing

I have been working on this lately, so let me take a stab at it.

I have heard, in general, cover price = production cost x4 or x5. That is for the standard distribution channel where you get 40% of the cover price and subtract your production cost from that.

So, if it costs you $2.50 to produce, you should charge between $10.00 and $12.50 plus shipping. Say you go low with $10 (because the math is easier). You get $4, subtract the $2.50 production cost and make $1.50 profit.

That means that for a production run of, say, 1000 (again for easy math) your total production cost is $2500. You make get $4 per copy, so you need to sell 625 copies to pay for the print run. That is about 63%.

Is there a standard 'break even' percentage companies shoot for?

So, you may want to go with the $12.50. That will give you $5 per copy, or 500 copies to break even, for a ratio of 50%.

I have no idea if it is a good idea, but I plan to go the PDF route. (I'm working on a hex-and-counter microgame with a similar cost.) I will produce very small numbers for people who want a printed copy, and sell through Key20 Direct and WarGameDownload.com.

About FLGS pricing, I think they usually get a 40% discount (or pay 60% of cover, however you want to look at it).

Someone please correct me if I made any mistakes.

FastLearner
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Joined: 12/31/1969
Game Price?

I didn't notice any mistakes, but I did want to note that the numbers I hear much more commonly are 6x to 10x production costs.

If you look at 6x, the lowest end of that, and you're going through a distributor, where you as the publisher are getting 40% of cover. That leaves you with 2.4x. Subtract the manufacturing cost and you've got 1.4x.

Now pay for:

1. Shipping to the distributor (it's on TOP of their cut).

2. Any fixed costs -- your home office or warehouse space or what have you.

3. Any non-manufacturing production costs, like artwork, copywriting, etc.

4. Any advertising or marketing you pay for.

5. Any trips you take to go out and promote your game, be it gas to the local retailers or airfare to a gaming convention, or airfare and hotel and all that for a game show like the GAMA Trade Show (where you actually got the distributor to pick up your game and got some retailers interested).

6. A bunch of other stuff I'm forgetting or omitting.

At this point you've paid for your very base expenses. If you had a 1,000 copy print run and they cost $2 each (cheap game), then the retail is $12, you got $4,800 from the distributor (in the ideal but totally unrealistic world where he bought them all at once). Subtract items 1-6. My estimate, for most folks, is you'll end up with less than $1,000 remaining. You may well be negative at this point.

6. Taxes on your remaining profit, likely including self-employment tax, for a small publisher, making it at least 40%.

Now you've got $600, in what I'd say was a best case scenario.

Likely, the distributor would buy maybe 200 copies to start with. If you don't get rid of them within a year, you'll be paying tax on that unsold inventory, too.

Yet if you sell tham at 10x, who will pay that much?

New publishers tend to succeed only when, as far as I can see (in part because this is true of almost all business), they produce their third or fourth game, and name recognition, getting their manufacturing channels set up, a good distributor and retailer network, learning "the hard way" a bunch of times, etc. have all ben ironed out. That means losing money on the first game, and the second, and maybe, if you're lucky, breaking even on the third, etc. And still dealing with the odd utter failure here and there.

There's a reason they say the way to make a small fortune in the gaming business is to start with a large one. It's a tough, tough biz. Hopefully new American interest in boardgames can start making up for sluggish interest elsewhere (like Germany), and keep this puppy floating.

Oh, and good luck with your game! ;)

-- Matthew

JPOG
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Joined: 12/31/1969
Game Price?

Wow... thank you... Mr. Sunshine... =)

Thank you all for your replies - some very interesting information and things to think about!

braincog
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Joined: 12/31/1969
Game Price?

Another thing to consider - regardless of what cost-plus multiplier or profit margin you think you'd like to get from each sale, you should not ignore what other similar games sell for. Certainly, you'll want to make a profit, but when you calculate all your costs, if that means you'll have to sell your game for significantly more than other similar games, beware. Likewise, just because you could produce your game for a few cents each, doesn't mean you should sell it for $1, even if that resulted in a huge profit margin for you - you may be leaving money on the table.

Bill

FastLearner
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Joined: 12/31/1969
Game Price?

Amen to both points. I think I kinda pointed out the former, but man, that latter one is key in all of retail. If 1.5 million people will pay $5 for a pet rock, and 1 million people will pay $10 for a pet rock, and 0.75 million people will pay $20 for a pet rock... well, you get the idea.

-- Matthew

Draconious
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Joined: 12/31/1969
Game Price?

yea you sell it for $20, and lower the price when all .75 mil bought it, lol...

FastLearner
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Joined: 12/31/1969
Game Price?

Right. Not so much LOL, as that's how you have to price things in a retail market. It may well be, if you position yourself correctly, that you can sell 300 of them at $10,000 each!

FastLearner
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Joined: 12/31/1969
Game Price?

Right. Not so much LOL, as that's how you have to price things in a retail market. It may well be, if you position yourself correctly, that you can sell 300 of them at $10,000 each!

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