Hi there.
I recently started a small game publisher along with some friends of mine. I've got an MA in Book Publishing, and the Board Game industry seems to be fairly similar to the book industry. I was hoping I could ask some specific questions to some of the people here who have been in the industry for a while. This is to help me in creating a good business plan with reasonalble projections on sales figures.
First: How many copies would you consider to be a reasonable first print run for an indie game if you are doing an offset print order? As a corolary, is POD a viable and economical method of printing games?
Second: What is the average Net Profit Margin % for board games? With books I would aim for somewhere between 15 and 19% as an ideal goal (Though I have in the past been forced to go lower by reality.)
Third: How hard is it to make your break even point on average in this industry? Do you tend to have to subsidize a lot of losses with a few big sellers? Or do you find that as long as you give each game enough attention, you can get each one to at make back its initial investment?
Finally: For those of you who have successfully launched game publishing companies, how long did it take you to break even on your initial investment? Is two or three years too hopeful?
Thanks in advance for taking the time to help out! PM me if you want to ask any specific questions.
Actually that sounds a lot like the book industry, where self publishing or creating your own publishing house is seen as not viable because giants like Random House or Penguin control the market so completely. The market is also super saturated there, with thousands of books on the same subjects being released annually, it is difficult for a small publisher to match the major marketing dollars being spent by the corporate publishers. Hasbro may be a big toy company, but their financials are no where near Viacom's (which owns Random House) so I can see how competing in the market is difficult.
Recently there has been a flourishing of small publishing as a result of the advent of POD and eBooks. POD allows small volume printing to be possible, and though the cost per unit is higher with POD the initial investment is usually much lower and allows for acceptable long tail growth. Rather than having to warehouse thousands of units in order to handle the trickle of backlist orders, you can place small print orders with a POD printer to fulfill those orders abet at a smaller profit margin. eBooks are a whole different beast that is starting to make everyone believe they can self publish, but that's a fad I see fading when people start to realize that just because your book is out there doesn't mean anyone can find and read it. The sheer volume of eBooks being published means that most self published authors will not make any money on their titles.
I hope to eventually use electronic media to find a new way of publishing my products. I believe that every serious board game should consider developing an app if they have either the money or access to a developer.
I am also aiming for international sales. Two of my business partners fill out day jobs as translators in French and German. There is potential that the more serious hobby board game communities of France and Germany will influence American buying habits. We also see the potential for a flourishing of American board game culture as more games are imported from Europe and as playing games in general becomes more of a socially accepted norm. Video Games have gone a long way towards dispelling the notion that games are for children only, and I think more video gamers will be interested in the social interactions held by serious board games as they become older.
Thanks for responding to the post. I hope this turns into a lively discussion on the industry :)