[DL] Re: Product updates

[Hank Woolsey <hwoolsey@precisiongraphics.com>]

Darrin wrote:

>When an RPG company prints a particular product, they have to pay the
>printer, the writers/artists/etc., as well as their own monthly fixed
>costs... anyway, when they send a book to the printer it's something they
>have to pay for right away, and given the razor-thin profit margins they
>operate under, it usually means that unless they have cash in hand to
>spend, they go into the red credit-wise.

Note: I've been working in non-RPG publishing for the last 7 years. 
So, that's where I'm coming from with my comments.

Usually, authors and artists expect payment within 30 days of turning 
over final manuscript or first round of art.  If this is the case 
with PEG, they've already paid for four projects (Collegium, Waste 
Warriors, and the two adventures that will now not be print but PDF 
[and no one has been able to tell me yet if the PDF will be optimized 
for print or screen]) as well as the additional costs incurred while 
producing those products - editing, lay out, proofing, and fixed 
costs for that time period.  Printing costs are an issue, but paying 
these other costs while not selling any product to offset them has 
got to be creating a cash-flow problem.

Additionally, they have no direct cash commitment to getting the two 
adventures distilled to PDF and available for download.  No printing 
expense and revenue to start coming in as soon as they are posted - 
why have they not at least done this?

<snip>

>Anyway, back to PEG... Shane sold PEG to Cybergames so that they could keep
>an eye on the books. If PEG had gone into considerable debt to put out all
>those wonderful products we enjoyed so much, then they might indeed have
>told PEG to slow down their releases until they have the resources in place
>to bring in more revenue. If you're putting out $100 worth of gaming
>material a month and your target audience is only spending $50, then
>problems start to show up in a hurry. Game stores now have $50 in unsold
>products on their shelves, and they stop ordering PEG material from the
>distributors. The distributors in turn stop buying PEG's new releases
>because they've already got crates full of last month's that hasn't sold
>yet... and they are NOT going to dedicate their warehouse space to product
>that might not sell, they got way too burnt on that whole CCG thing.

This is a matter of balancing print run versus price break for 
increase print order.  By now I hope PEG has a pretty good idea how 
many of each type of book are likely to sell - both to distributors 
and direct.

>This is all bad guesswork on my part, but the way game distribution works
>nowadays is just f***ed in the 'ead... and it could be even more
>complicated than that. Cybergames probably has an entirely different
>revenue structure than PEG, given their (supposed) online presence, and
>they did go on a bit of a buying spree. Getting all those corporate
>entities to work together may take a while.

I am doing nothing more than speculating at this point, but I would 
guess that Cybergames has overextended themselves financially. 
They've acquired a number of print RPG companies, and their area of 
expertise is downloadable product.  I wonder if they fully realized 
the cash commitment needed to run a print business.

Hank Woolsey