I’ve talked (ad nauseuam, I’m sure) about what we did to get Diaspora out there. I’ve talked about why we did that and how it worked out. In light of this piece from an actual vendor about “indie” games and IPR, I’ll talk now about what the effects were in retrospect and why small scale game developers should consider our model when producing their work-of-love-for-small-but-real-profit.
We hooked our cart to FATE. There’s no way to deny that the opportunity to grab the same brand as Spirit of the Century presented to us by the OGL was a big deal. I don’t think we realized what a big deal it was (or more correctly, what a big deal it would become) but there’s no question that we instantly penetrated an existing and forgiving crowd of buyers while at the same time staying on the periphery of it — we changed enough and on our own terms that it was an outsider’s FATE game. In real terms that meant that we actually attracted interest from both folks that knew they already liked FATE and from folks who loved the sort of ideas we had but were leery of FATE for some reason. This was discovered, not intentional. But the bottom line here is that being part of an existing success is an opportunity, and the OGL is an invitation. That boom may already be subsiding, but that’s for history to declare. I know we still have at least one FATE-like game in the pipe.
The more important thing, though, is risk. I read a lot of game design forums. I don’t participate much because frankly I feel like an outsider. They are all really interested in aspects of game design that I’m not all that interested in — for me, design emerges from frank discussion between a small number of smart people who are iterating their ideas over constant play. All those adjectives are important. Some forums try to do this and for people that feel “inside” them, I am certain they work. Anyway, the only reason I brought it up is because inside these forums folks talk about how they intend to publish and, despite their cutting edge ideas in game design, I see constant conservatism regarding methods. And the article above hints at why this conservatism is a kind of doom.
The conservative method I am thinking of is the traditional print publishing method: make a book, print a bunch up, and sell them. The costs involved in this are many: making it includes art, editing, writing, software, yadda yadda yadda. Printing it means short run print jobs (which have very high costs), warehousing, shipping, and, inevitably, third parties (IPR). Selling it means being visible, and a lot of folks take that to mean going to cons. This last works well if you are already going to a con, which is cool for those folks that do that. It feels, however, mandatory when you talk to people that do this. That is, “I go to cons” is sort of an assumption rather than a method. In some ways indie games mostly finance going to cons. At least that’s how my math on it worked out. We bought scotch instead. I am not going to claim that was a better choice.
Here’s the thing, though: working in very small numbers (by publishing standards — say 1000 units in a year as a goal) means that you are necessarily going to operate with high costs. That thins your margin and means you pretty much have to do all your marketing yourself. Now you have a bunch of choices to make this work, but they seem to boil down to: cut your costs or cut your risk.
The vast majority seem keen to select either the former or no choice at all.
There is a popular notion that risk-takers are the big successes in a capitalist system. Actually what happens is that risk-takers succeed big when they succeed and fail big when they fail. Long term success is created by carefully managing and deferring risk in such a way as to still capitalize on it (Nassim Tales tries to tell us about this in The Black Swan but the message is buried under some dreadful writing — he’s still right, though). You want to be attached to that risk taker, but with a good knife for cutting loose if he plummets. That means you won’t see as much profit when he succeeds, but you might get away with small losses along the way. Anyway, we don’t here a lot of talk about risk in the indie design community, which strikes me as bizarre.
Cutting costs, see (sorry, channeling Edward G. there), is the reflex choice. Holy crap, this costs too much, what can I do? I know! Cut costs! Duh! But we rarely think about the choice of cutting costs to zero (or close to it) with the expectation of lower maximum profits. This is risk-cutting, a conservative course that has much higher expected (in the mathematical sense) rewards but much lower maximum rewards. I guess sometimes one can be too focused on the prize and loose track of ones footing in the process.
Again I will stress, what we did was fortuitous, not planned. We didn’t plan to sell 1,500 books in a year. If we were clairvoyant, we’d have done a 1,000 book print run and fronted the cash for it. But (and here’s the kicker) we’re not clairvoyant. We (and you) have zero magical powers. Thinking wistfully about what might have been is bullshit. It’s a waste of energy that could be spent yelling on the interweb.
What we did was adopt no risk. The Lulu model encapsulates all of the bits of publishing that entail risk, from store-front web presence to printing to customer payment, through shipping. They handle it all. And they take a fat chunk of cash for it — they take a very fat printing fee and then they take a kind of commission off your final sale price. And they deserve it! Whatever failings they have, they are eating all the risk on your product. And you still wind up with a pretty good profit margin at the end of the day.
In fact, if you decide to go all trad on the publishing end and print and warehouse and sell everything yourself, you can make twice as much money per unit. But your accessibility is weak — your units sold is low and you are doing all the dumbwork (I’m thinking of fulfillment here mostly). If you’re not doing a lot of it then you aren’t selling a lot of books. If you are doing a lot of it, you suddenly realize why it’s worth paying someone else. And so, pretty fast, you are looking for a third party like IPR to handle that. As soon as you do that you have cut your profit per unit down to about where it would have been with Lulu. Lower, as it turns out. But you’ll get more copy out!
Maybe. Your vendor sales will go up, but the unit profit on them will be very bleak indeed at your printing volumes. Your direct sales will go up over your home shop, but no one will tell you by how much (though they will tell you how much of your profit they will take — this is not a bad thing but it better be part of your decision calculus). No one will promise you anything particular about promotion (where will you be on the web site front page? for how long? will your game be in the IPR boot at Origins? will someone try to sell it? what are you buying here? It’s mostly a secret). But it’s pretty much the only game in town if you’re tired of handling payment and shipping yourself.
So when vendors are seeing the IPR move as a potential problem for indie titles, this better strike you to your heart, because IPR was already something of a problem for indie titles. I think somewhere people got it in their heads that this was a huge opportunity, but it was almost instantly eclipsed (in fact though not in mindshare) by what Lulu did: print + storefront + shipping. All your costs folded into a per-unit cost rather than an up-front risk or a workload. As soon as that happened it becomes tenuous indeed to pay a third party to do part of that work while you continue to sustain the bulk of the risk. It’s disproportionate. It’s a bad deal.
Now PDF sales are another ball of wax because they are intrinsically risk-free. So here’s where you can really make up some slack because there is a real (though small, by my count, but probably growing) market for them. Sadly, Lulu won’t let you bundle products or anything interesting like that, so your hands are tied there, but you have tons of other options for selling PDFs. Scattering them around is kind of crap, and the fees taken are pretty thick, but it’s all gravy, right? Yeah. In the end it’s a no-brainer though I’m glad we held on to it for as long as we did — it let the physical book get traction and seeing the hardcover was a big deal for a lot of people, judging by my mail. Anyway, I’ve said before that if DriveThruRPG gets their POD act together they have a serious winner in the bag for indie games: zero risk + great publisher account/sales tools will be the Golden Egg for a little guy with a game in his head. If we can wrap our head around dodging the trad publishing risk bullet. Big publishers amortize this risk with diverse titles and tons of market penetration. You won’t do that, but will take the same proportional risk per title (greater actually). That is a crappy deal.
So for the first year we sold directly, using POD exactly as it was intended (print on the demand of the customer, not the publisher — the way it’s often used is as a cheap printer, which misses the whole point). We had good buzz, thanks in no small part to an outrageous review by Fred Hicks which basically told the whole FATE community that it had his stamp of approval and they should go buy it right now. And that was the “hitch your wagon” part. We didn’t intend to be on a bandwagon (as I said before, we’re kind of outsiders — we didn’t know there was a bandwagon) but we wound up there. That’s lucky. We had an existing voice at RPG.Net and we sent reviewer copies to folks like C.W. Richeson, where we were confident the result would be respected, read, and (net) positive. That’s deliberate.
Now, a year on, we’re publishing in a more traditional model in partnership with Evil Hat. But we’re still operating a risk-averse shop, letting Fred and the gang take a chunk of the profits in exchange for taking on the risk. And he’s smart — he knows the risk is low and the profit margin high, and our end of the risk is that if it goes south we don’t get paid. But zero return on zero down is mighty low risk in my books. Most importantly, taking that kind of risk is his business. He’s got a stable of titles, a smart business advisor, connections in the industry…oh my goodness, he’s a publisher.
So, in response to that post from a vendor about IPR, I offer this to the so-called indie community. Ask yourself first if you’re a publisher. If you’re not, watch the POD space closely for opportunities, because they are there. But if you’re not, think hard about printing, warehousing, and shipping books. Because that’s publisher stuff — so why are you doing it?