Tuesday, December 3, 2013

Money Talk: A Look Inside a Completed Kickstarter


I've been putting this post off for too long, and considering the confusion I created with my little DTRPG mistake, I suppose I can do so no longer. Here's how the finances of the No Security Kickstarter played out, and how they're informing my decisions in pricing the upcoming print version.

Why Am I Letting People Look Into My Wallet?

Well, the intention of Hebanon Games is to make easily available, professional quality gaming products. Largely, I think we succeed on that front, but the fact of the matter is that with exception of Ross Payton and other friendly mentors like the members of IGDN, I'm working without a safety net here. Tabletop Gaming is such a cottage industry that it's never really evolved beyond the Do-It-Yourself education model. While that makes the industry appealingly "punk rock" and original in some ways, it also means that people make mistakes a lot more often, as evidenced by my previous post. There aren't any traditional classes specific to this medium available, and instructional methods I could adapt into publication know-how (classes in marketing, technical writing, business, etc) are no longer available to me due to finances and time.

I think the quality of No Security is stellar considering the sheer amount of things that can go wrong. But experience remains my primary teacher, and despite commonly held opinions, experience is a TERRIBLE teacher. I know I wouldn't send my kids to a school that hired teachers dedicated to giving the test first, punishing inevitable problems with pain, refusing to use assessment to alter the "lesson" in any way, then giving the same damned test again. That's the educational ethos of a SAW movie, and errors are bound to occur.

So since I can't be perfect yet, at least I can be well-intentioned. The whole point of the RPPR Game Designer's Workshop series is to take the sting off experience's lessons for other noob creators, and I can be doing work on this blog to the same effect. While it might lose me some customers to lay my financial decision-making bare, Hebanon Games is about transparency even when people might disagree.

And if it ends up tanking the line? Well, that's just another lesson learned for the next iteration, right?

"Would you like to learn something?"

The Kickstarter

I'm not going to break out line-by-line receipts here for the sake of brevity (plus, I don't have the gas to make it to my storage unit aka Mom's house). Suffice it say that the KS money is LONG gone. After the 9% cut given to Amazon and Kickstarter, No Security made roughly $6,100. The pool of money generated by our generous backers went to fund the following.

  • Art and layout: $3,000 plus and worth every penny. This includes everything in the original PDFs from Ean, Steff, and Chris, in addition to the commissioned sketch rewards.
  • Printing the miniatures: $300 or so
  • Shipping miniature rewards: $400 plus...I  remember being shocked it was more than making the damned things. Keep in mind this was before the international rate hike of earlier this year. I shudder to think of the cost had we had to wait a little longer to ship.
  • Designing and printing postcards: $300
  • Moniker domain name: $30 or so for the past two years
  • Webhosting: First year was free, second year was roughly $150, and it was a total waste of money. Sorry, but I couldn't predict the fact that Eastern European muslim terrorist groups would love hijacking my site so damn much. THANK GOD we never built an online store. Bullet dodged.
  • Increased Bandwidth: $50 during the months we distributed the preview actual plays. The original contract was for the minimum package and it didn't cover the downloads we were getting on the reward audio.
  • Skype headset: $25 or so. I had actually never Skyped before the first online game, believe it or not. 
  • Taxes: $500 plus. Sadly, the money from the KS jumped me a tax bracket last year since I still had a job at the time. As the lady at H+R Block was older than dirt and thought a "Ransom Kickstarter" meant I was holding a motorcycle engine hostage, I'm still not entirely sure I didn't get screwed on this deal.
So let's call the total $4,755, leaving $1,345 or there about for ole' Caleb. I freely admit to spending that money on luxuries like food and shelter. To put the number in some context, freelancing rates in the RPG industry usually land somewhere between .03 to .06 cents per word. Including the reward scenario Lover in the Ice and the reward short stories "To Bright Boy" and "A Cult of Two," that equals roughly 97,000 words. If we assume the minimum of .03 cents per word, an industry rate for that much writing would run about $2,910. I cleared less than half that, which I don't think is too bad a deal for customers taking a chance on a new creator. Considering that I didn't ask for that money in the first place (it was generously donated above the $1,500 funding goal) and much of it went to funding stretch goals, I have a hard time feeling like a profiteer for using that money to stay alive. 

But if after reading all that you still equate me to some Gordon Gecko-esque shark akin to the creator of The Doom That Came to Atlantic City, allow me one last retort. To distribute $1,500 across the hours it actually takes to write, edit, playtest, and revise 97,000 words is to be paid a pennies per hour. 

In short, my goal of buying the S.S. Hebanon and retiring to the Bahamas is a LONG way off. I assure you we're playing for the love the game over here, and I'd urge anyone thinking about getting into RPG publishing to aspire to nothing greater.

Behold the decadence of a thousandaire

The Pay-What-You-Want Model

The plan was to get on DTRPG and sister sites far sooner than we actually did. A lost email meant that reformatting the logo to fit their requirements took Ean 5 months instead of 5 minutes, but we finally got the page live in July. The goal was to merely increase our exposure; at the time we were planning to get a Hebanon Games page on their network, OneBookShelf Inc. didn't even offer a PWYW model. The scenarios were all placed as free with the exception of Lover in the Ice. It costs $1.99 because A.) it helps maintain some of the exclusivity of the backer reward and B.) the adventure includes some mature content that, while I'm not ashamed of, feels more comfortable behind a paywall and after a disclaimer (there's something to be said about the can o' worms opened up whenever sexuality is brought up in the horror genre and gaming in general, but that learning experience is best left for another post).

A few weeks after the set-up though, DTRPG and its sister sites started testing a Pay What You Want option. Since we had a few more scenarios to release (Revelations and The Wives of March were still in development at the time) and I was already considering how to fund Hebanon Games' next project, I reformatted the $0.00 to PWYW. 

The response was very positive and generous. Things only got better when, the week of GenCon, those beautiful bastards at at DTRPG featured Revelations as their featured free product. Plugging Hebanon during the week everyone has gaming on the brain increased our exposure massively and resulted in a lot of donations. By the time Wives went live, sheer luck had secured us a fanbase much larger than our original 250 backers.

Roughly five months after signing up with DTRPG, the products of Hebanon Games have been downloaded a combined 4001 times. We've made more than $800 from donations. The distribution deal we have with DTRPG dictates that we get 65% of sales after printing costs. Factoring in other processing fees, that leaves us with a little over $500 in profit (note: I don't include an exact amount here because it could potentially be used in a hack of the payment services used to distribute royalties).

If I promise to put the image of a terrorist in every post,
will you please stop hacking my games website,
anonymous jihadists? Please?
The POD Version

As my last post suggests, making a POD version of No Security has not been without challenge. I approached the endeavor for a number of reasons.
  1. I was always a little sad that we never hit the print stretch goal. It's a writer's dream to hold his own book in his hands. I want to experience that for purely selfish reasons.
  2. I got numerous requests from people asking for a print version. The messages trickled in regularly over the course of the whole year the project was underway.
  3. I want Hebanon Games to succeed in the long term, and that means building a stable of varied print publications.
  4. The added funds from the PWYW model helped us reach the stretch goal after the fact, so why not?
  5. If the book was successful, it could fund the upfront cost of the next Kickstarter, allowing me to pay artists for their skilled and important work rather than dropping some lame line about compensating them in "exposure."
  6. I would never make enough money to pay someone to redo all the layout for a print version, but I needed to learn Adobe InDesign anyway and I thought adapting pre-existing PDF's for print would be a good tutorial (note: this was a FANTASTICALLY stupid idea).
So that profit from the PWYW releases? Yeah, that's all gone too. I spent $600 to pay for art from Chris and Ean's cover design; I'll let you ask the artists for their exact rates because it's not my place to quote prices for them. The money from the PWYW customers and some personal donations on my part (read: plasma donations) are making the print version possible.

Plasma donation: like crowdfunding for hemophiliacs

Pricing

Here's where things get risky: I'm telling you the profit margins I'm planning for a product that doesn't yet exist. The print PDFs have yet to be approved for print by their respective publication houses, and the book is not yet for sale. People that disagree with my margins could very well not buy the book as a result. While that disappoints me, it will be a business lesson hard learned from that cruel bastard of a sensai, Experience. At least I will have been honest with the people kind enough to take a passing interest in my work.

Honesty is edible, right?
The plan is to have TWO versions of the book. The DTRPG and sister sites version will be a standard color, softcover priced at $20.00. If it is successful, we'll consider doing a deluxe version that is hardcover with glossy color pages, but the price will likely jump into the $30 range for those interested in the fancy option. We'll cross that bridge when we cliche it.

I also hope to have a CreateSpace version. The CreateSpace version of the book will also be a softcover, but it will have a Black and White interior. This is because CreateSpace has A.) more expensive color printing rates for B.) inferior color fidelity, in my opinion. The B+W version will be priced at $15.99. I include the CreateSpace version for international backers because they've all reported to me that DTRPG products are very hard to get due to shipping costs. CreateSpace has a more international presence, so hopefully this will make the book more available to fans outside the United States.

With both titles, I've set my profit margin to a little under ten dollars per book after taxes, printing costs, and distributor cuts (again, I don't include the exact rates for the security purposes; security questions for e-commerce sites often ask for the exact amount of the last transaction). Copies purchased through Amazon will earn a little less than half that, but my hope is that the increased exposure will even things out.

I've actually given this thought. The margin is informed by the following concerns:
  1. It's comparable. For example, The Final Revelation by Pelgrane Press (great book, btw) retails for $22.99. It has more art than my book and is printed on glossy paper, but it's 20 pages shorter and entirely sepia toned. In my estimation, this adds up to a wash in terms of production value and the books are similar in tone and subject matter.
  2. The scenarios remain free online. I'm not taking down the PWYW scenarios, so I can't expect the kind of numbers I would get if the adventures were exclusively available in print.
  3. At the current margin and using only POD distribution, the book can break even if it sells 70 copies. If it sells another 70 copies, it funds the estimated cost of preliminary art and previews for the next Hebanon Games project, Red Markets. I think 140 copies is a pretty rosy estimate for a book made up of content already available online, but it's not outside the realm of possibility
  4. If by some fluke the book is popular enough to sell way more than 140 copies, the excess can be used to fund a traditional print run for "brick and mortar" distribution and purchasing ISBNs. I've had some generous offers already, but the $3000 or more it would take to make the initial run is beyond my means. I'd be lucky to make 1/4 of my profit margin using traditional distribution, but at the current rate it would remain worthwile to pursue if I could fund the initial cost of wholesaling copies to game shops without going into debt. Setting the profit margin lower would mean that brick and mortar copies would make me pennies per book and still require an enormous investment on the front end. The current margin is fair, in my estimation, and it doesn't exclude other options in the future.
Now I just need to figure out how to get the gutter margin
to f***ing 3.75 inches and we'll be good to go.
Just give me a few more months....


Conclusion

So that's the past, present, and future of Hebanon Games' finances. Hopefully, my disclosure hasn't sparked any outrage, and if it has, I apologize and look forward to the trolling in the comments (as if my permission were needed). More importantly, I'd love to hear from any aspiring new publishers that have questions based on this post. If I can't come up with an answer, I'll do my best to find someone that can.

I hope to feel your watchful eyes when the print versions are finally ready and I announce them here. As always, thanks for your interest in Hebanon Games.

11 comments:

  1. I think that you have to make SOMETHING for all the effort and time you put into your work.

    Caleb, the truth is that your scenarios are fantastic, multi-layered and incredibly well written. Not only did you earn every penny you made from your No Security Kickstarter, you deserved it.

    I, for one, appreciate your transparency and insight into the process. I also look forward to picking up a print copy of your No Security scenarios.

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  2. This is really fascinating to me. I sometimes fantasize about trying to write some scenarios for publication, but there's no way that I'd ever have the devotion to actually start my own publishing company. It's really cool reading about how you're doing it.

    Count me as a customer for the Print No Security.

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  3. I actually find this makes me want to buy it more, some weird part of me conditioned by gaming see's the '140' figure as a challenge that I must now attempt to work towards in order to 'win' and you also make it all sound like such hard work that surely some kind of monetary compensation is deserved. Also I sympathise with your coming to grips? wrangling? of InDesign, she is a mighty beast but sometimes mysterious in her placement of certain tools and menus. >_>

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  4. As a European I will indeed have to see if there is an option that allows me to get the book with shipping I can afford. But I'd sure like to have it on my shelf. Also print is way easier to use for me at the table.

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  5. Not only is this highly informative and absolutely interesting to learn about the buisness and hobby but it has solidified my own choice to do so as well. You have been a continuing source of inspiration and motivation with the RPPR games youve run and the stories youve told and Game Designers Workshop is an ESSENTIAL tool, in my opinon, something i enjoy listening to for great commentary and conversation, helpful hints, tricks and tips and general advice that has really been helping me in my own creations. Thank you very much, Caleb, for all of your hard work and dedication to something that has become a huge passions of yours in the last few years since you started gaming, as i have. I for one look forward to every post, every game and scenario and moat certainly holding the printed book of each of your creations. Keep up the fantastic work, man. seriously, it may only be a thousandaire kinda job but...youve earned every penny and then some and you did it doing something you genuinely love.

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  6. Thank you so much for the kind words! This totally makes my day. I'm glad this information could help.

    As far as shipping goes, the CreateSpace shipping rates should be something like $10-15 cheaper because they utilize Amazon's massive distribution infrastructure. It will be a black and white edition, so roughly $4 cheaper for the book as well.

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  7. Thank you, sir. thank you!
    Itll be nice to see the shipping not as blown up as so many places, even here in Canada it can be a bitch to have things shipped, regardless of the close promixity. To be honest though, i have no problems whatsoever paying for it or more.
    and HURRY UP WITH GDW AND RED MARKETS :p
    Mechanics mustve been absolute hell, but ive gotta know what youve done with em regarding the sanity mechanics and the economies outside of the "safe zones" and cities.
    mechanics for my own game have been ridiculously difficult to figure out and in particular attempting to streamline all of them to reduce die rolling.

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  8. outrage? it just makes me wanna give you more moneyyy! I look forward to your next KS/pay what you want. I'm a digital-only boy--much rather see the money go straight into your and your collaborator's pockets than to shipping and handling. the Onyx Path guys did a big breakdown on just how disruptive S+H is to Kickstarters and it was kind of heartbreaking. even if I were interested in hard copies, I'd've given em up after reading that shit.

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  9. many thanks for visibility as well as insight into the process. Also i enjoy collecting any printing replicate of one's No Security scenarios.
    fut 14 coins
    Old School Runescape Gold

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