Why RPGs Are Not Too Expensive

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Every once in a while the complaint comes around that RPGs in general are too expensive. That's untrue, for many reasons but particularly because of the value you get for that material. Let's talk about the cost of making a book (and by "book" I mean "RPG product" ... if I mean "a story that you read in bound paper format" I'll say "novel") first.

(Oh, and I am probably going to switch between "WotC" and "we" in several places, simply because all of my publishing experience has been through WotC and so I tend to describe it from their/my perspective).

(And let me apologize now for how long this is ... the background and stuff took a lot longer to explain than I thought.)

What Goes Into A Book

Well, obviously the book has to be written. That requires time by a designer, such as myself. Books are usually created to be an increment of 16 or 32 pages (called a "signature" in the publishing world), and at Wizards of the Coast we call 32-page increments "module units," probably hearkening back to the days when all RPG products were called "modules" (hint: we don't call them that any more ... a book is an adventure or a sourcebook, not a "module"). For a typical one-module-unit (1 MU) project, a designer is given a month (four weeks) to write text for it. Larger books are in multiples of four weeks (although we sometimes shave off a week or two on the larger ones, since much of the work involved is "start-up time" when you're trying to get some momentum). Let's assume we're talking about a 1-MU book for the rest of this conversation. Now remember, the designer needs to be paid for that time (you know, so he can eat).

After being designed, the book goes either to a developer (who refines the work and makes sure the parts all tie together, particularly if it's by two or more authors) or an editor. For simplicity's sake in this argumint, let's skip the developer step and go right to editing. An editor usually has 2-3 weeks per MU of a book. The editor gets paid, too, so she can eat. Yes, sometimes books have multiple editors, and in these cases there's usually a lead editor for the project who reviews it all when it's done. For this discussion, let's assume the editor worked on the book for 2 weeks.

After editing, the book goes to the managing editor. The ME is a second editor, sort of a watchdog for problems that come up in changes of document format and tie-ins to other books. For example, if a particular ability is worded a certain way in Tome & Blood and there's a similar ability in the Wheel of Time RPG book, the ME makes sure they use the same wordage so people don't interpret them differently. The ME sends the manuscript over to typesetting, where it is laid out in two-column format with all of the proper headers, art, maps, captions, and stuff like that. The typesetting department produces a progressive series of iterations of the laid-out work (called "galleys"), and the ME and the creative director (usually the boss of the designer & editor, and responsible for the direction of the product line the book is in, such as Forgotten Realms or Star Wars) are the ones who look over the galleys for mistakes, updating page references, and so on. The ME and the creative director see every single product that comes through the pipe (or at least every product from a particular line, in the creative director's case), so part of the ME and creative director's salary is involved here.

Hey, when I mentioned art and maps? Well, the artists have to get paid, and the mappers have to get paid, and the art director and the director of the cartography department who decide which artist or mapper does the work and checks on their work has to get paid, too. So that's a few more salaries to add to the mix. Oh, and the typesetters, never forget the typesetters, they get paid, too. But I don't know their proportionate time (or their salaries), so let's count them out of the simplified calculation.

Once a book makes it through typesetting, it goes to the printer. Printing a book has its costs, and the print costs depend primarily (for our purposes) on whether or not the book has any color and the print run of the book. No color is cheaper. Printing more copies means the cost per copy is cheaper.

The Cost of All of that Work

OK, now let's do some math.
If your typical designer gets paid $30,000 per year (and that's generous ... WotC is one of the few places that can afford to pay its designers this well or better) and your typical editor gets paid the same, that's $577 per week for the designer and $577 per week for the editor. Three weeks of designer's time plus two weeks of editor's time comes to $2,885. Assuming a standard print run of a 1 MU book to be 10,000 copies, that means that each copy of the book has to cost at least $.29 to break even at all. I'm going to call this the R&D cost because this cost is 100% from the R&D department (designers and editors).

Back when we first came out to Washington, the R&D staff did some analysis of costs, and my group found out how much the cover plays a cost. For a 10,000-unit print run, a black & white cover on heavy paper/light cardboard (the stuff WotC uses for its 32-page adventure covers) was about $.05 per copy. A color copy was about $.10 or $.12 (let's assume $.11 because it'll make the math easy in a second). If we add the cost of a color cover to the R&D cost we get a minimum price per copy of $.40. The printing of the book itself is going to run about $.25 per copy (just a guess on my part, roughly 2.5x the cost of doing the cover), bringing our total to $.65 per copy.

I don't know the costs for interior art or maps, but the cover artist gets paid (estimate) about $1,000 for a full-page color cover, which works out to $.20 per copy, bringing our total to $.85 per copy. If you add in one week's worth of salary of the ME and the creative director (both of whom are paid at least $40,000,), that's another $.16 per copy ($40,000 ÷ 52 weeks ÷ 10,000 copies = $.08), bringing us to $1.01 per copy.

(FYI, a higher print run generally means you pay less per copy, and a lower print run means you pay more. Eventually with smaller print runs you reach a point where the cost becomes so high that the price for the customer is too high for anyone to consider buying it. I'll touch on these points later in this rant.)

From the Company to You

Now's let's talk about all the hands a book passes through before it gets to you. The chain from the producing company (such as WotC) to the end customer (you) follows a rough guideline called the "rule of halves."

You buy a $32-page book (such as Heart of Nightfang Spire) from a retailer for $10.
The retailer bought it from a distributor for half that much ($5) so they make about a $5 profit on each one.
The distributor bought it from WotC for half that much ($2.50) so they make about a $2.50 profit on each one.
Following the rule of halves, WotC's profit must be about half that of what it sold it for, so WotC is making about $1.25 profit on each 32-page book (which means that WotC's cost is a little over a dollar, as we determined above).

If you want prices to be lower, someone ends up making less money.

Option 1: If you go to the root of the matter and have WotC reduce their price (to the distributor) from $2.50 to $1.50 (so WotC is only making a $.50 profit on each unit), that means the distributor sells it to the retailer for $3, who sells it to you for $6. Yippee, a $4 savings from before.
Except that WotC profit on the item has dropped from $1.25 per copy to $.50 per copy. Small items (like 1 MU books) are barely worth WotC's time as it is - the return for the investment is incredibly small (and that's part of the reason why the D20 license has worked so well - other companies are much better at producing these small items than we are because they don't have the overhead that WotC does, so they can make some money on 32-page books and we can focus on larger items that are more reasonably profitable). So if WotC had to reduce prices on items like this, they'd probably just cancel the product altogether.
Even for larger items, WotC can't drop its prices ... it has certain profitibility levels that it has to maintain in order to be a viable part of WotC. As it is, RPGs are much less profitable than TCGs and are often unfavorably compared to TCGs for this reason. Reducing an RPGs profitability only makes it look worse.

Option 2: Have the retailer charge less money, say $8 instead of $10. Hmm, but retailers are collapsing left and right because of competition with online retailers. But they can afford to shave off a couple of bucks, right? No, they can't.

So we're stuck with the prices how they are. But that doesn't mean the prices are too high, as you'll see in a bit.

Value Per Hour

Now let's make some comparisons.

A typical 96-page product (such as Tome & Blood) retails for about $20. Let's assume you game once a week for 4 hours each week. That's 208 hours a year of gaming time. If you use a feat, spell, magic item, or prestige class from that book in your games, it's contributing to the fun of your game time (you are playing to have fun, right?). Let's assume it has a 20% contribution to your game (this is a case where several things contributing can add up to over 100% because there's overlap, like if you fight a monster from Monsters of Faerûn and your wizard use a magic item from Tome & Blood with a spell from Magic of Faerûn under the protection of a cleric with a prestige class from Defenders of the Faith, each contributes a fraction but they all overlap), which means you're getting 40 game-hours of entertainment out of the book. (And that doesn't count the time you spend reading the book or preparing a game with it.)

Compare that to picking up a hardcover novel, say, 500-page Hearts in Atlantis by Stephen King, which retails for $28. You'll maybe spend 10 or 20 hours reading the book, compared to the 40 from Tome & Blood.

Compare that to a couple of large pizzas and two 2-liter bottles of soda (about 2 hours).

Compare that to two movie tickets and snacks at a movie theater (2-3 hours).

Compare that to dinner for two at a hole-in-the-wall restaurant with nice (but not expensive) food (2-3 hours).

Compare that to a new Playstation game ... $50-$60 (approximately 50 hours if it's a good game).

Compare that to a music CD ... $15-$20 (multiple listens, but probably no more than ten each in a year for a total of 10 hours).

Compare that to a month's worth of comic books (four titles @ $3 each for $12, netting you about 4 hours of reading).

Compare that to a case of beer (Albertsons.com has a case of Bud Light for $17.99) and how long it takes to drink it.

The prices are even more in favor of RPGs when you look at a book like the Forgotten Realms Campaign Setting - a 320-page full-color book for $40 that you'll get 4 hours of use from (100% contribution, since it's the sourcebook for the world)
every week for at least a year. 200 game-hours of entertainment for $40.

Back In My Day, Books Were Free!

Yes, I know the 1st-edition AD&D PH was $12. However, that was back in 1980! Let's take a look at the prices of other items from the 1980s.
    The Talisman by Stephen King and Peter Straub: $18.95 (600 pages ... bigger and cheaper than Hearts in Atlantis)
    A first class postage stamp: $.22 (It's what, $.34 now?)
    To Reign In Hell, an excellent paperback novel by Steven Brust, printed 1985: $2.95 (compare to The Long Patrol, a fantasy paperback novel by Brian Jacques printed in 1997 for $5.99)

The point is, everything, particularly books, have gotten more expensive in the past 20 years. It's called inflation. And considering the value per hour of an RPG product, they're cheaper that most other things.

And do I need to point out that whet the 1st edition AD&D PH came out, it was about 120 pages and completely black & white? And that it came out a year after the previous "core book"?

Speaking of Core Books...

You may be upset that you paid $20 for the 200+ page Monster Manual and then dropped $20 on the 96-page Monsters of Faerûn. Don't be. You're not being ripped off for Monsters of Faerûn. You are getting an excellent deal on the Monster Manual.

See, WotC knew that there would be some resistance to being getting into the new D&D. After all, you have dozens of gamebooks that work in the old edition, why should you convert, right? To combat this intertia to remain in 2nd edition, WotC deliberately discounted the price on the first print runs of the core books.

(This discounting had two effects. One, it let people pick up the new PH -- and thus have all of the essential D&D rules -- for just $20. Second, someone who wanted to switch over to the new D&D only had to pay $60 instead of $90 ... WotC had its existing players in mind and was trying to make the transition easier for them.)

Basically, you should think of those $20 books as $30 books with an invisible $10 immediate cash-back coupon stuck to them. The books really should be sold at $30 each (and it's likely that they will in the future now that the initial buy-in of the core books is coming to a close) and so you're getting them for a steal at $20. Don't compare the other new D&D books to the $20-price core books, compare them to the $30-price core books.

You may be wondering how WotC could sell the new PH, DMG, and MM at such a low price and still make a profit. The answer is print runs, as I touched on way above. The core books didn't have a "standard print run" of 10,000. While I'm not allowed to say what the real print run was (and I don't think I know within a ballpark of 10,000 anyway), but the print run was at least 100,000. That probably reduced the total printing cost by half, and reprinting is cheap, too, so the second printing of the rules was pretty cheap, too. Those savings were passed on to you, the customer. That's why the core books are so cheap (and even if priced at $30, a 300 page full-color book is still an excellent value).

So don't be mad that you are paying $20 for some of the newer 96-page books. Be happy that you got your core books cheap (and the supplements at the sticker price).

Speaking of Reprinting

I mentioned reprinting earlier, I'll come back to it now. Back before 3rd edition D&D, I often heard, "Why is [insert name] still out of print? Why don't you reprint it? Everyone I know would buy a copy!"

Ignoring that "everyone you know" often means "10 people" (or, on the internet, "20 people that agree with me and I'm going to count the thousands listening that aren't saying they disagree but instead are remaining silent on the matter"), reprinting a book does cost money, even if it's cheaper than the original, and that cost also depends upon the number of copies.

Now, I said above that a low print run means the prices go higher. This is true even for reprinting, although not as bad. Still, even reprinting 1,000 copies of an old book is a big investment because much of the sunk costs of printing involve getting the guys at the printing company to dig up the printing plates for your book and set it all up again (once it's set up they can just hit the button and print 100 or 10,000, but the labor cost is averaged over the number of copies so you can see how it's better to make a larger print run if you expect to sell a lot of copies, rather than going back and reprinting it five times over the next year in small increments). So say we reprint 1,000 copies of some 32-page adventure. Normally the printing costs for 10,000 units would be $.25 per copy (since all of the other costs such as R&D have been factored into the first print run, all that we're really paying for is the printing cost). OK, but we're not printing 10,000, we're printing 1,000. So, let's say it's $.50 per copy at this reduced volume. So, 1,000 copies at $.50 each is $500.

Now we have to convince distributors and retailers to stock this OOP item again. Most RPG retailers don't know what they're doing (sorry, but it's true ... most are run by hobbyists, not business people) and focus on new releases only (and it's often very hard to get them to buy more than 1 box (6 or 12 copies) of a new product). They're not likely to want to drop some money on a 2-year-old book in the hopes that it would sell more (when really it has probably sold all it's going to sell, especially as our sales data shows that most of a product's sales occur in the first 90 days after its release). So we're stuck with most of this new inventory, say 750 copies, which is going to be a slow sell. We also have to pay warehousing charges for these items (750 32-page adventures take up roughly 27 cubic feet, or a cube 3 feet on a side) which adds up.

Point in fact: When WotC got rid of a lot of old TSR product about 3 years ago, they had stuff sitting in a warehouse from 1989 that hadn't sold, like Child's Play, Gargoyle, and Puppets. TSR had been paying warehousing fees on these things for almost ten years in the hopes that they would sell.

So reprinting, except things that have a huge demand (like the core books, or the Faiths & Avatars books for 2E Forgotten Realms, the 2E FR campaign setting box set, and so on), generally isn't worth the expense. Yes, it makes a handful of customers happy, but it causes the company to lose money, and we all know what happened to TSR back in 1997 because they were losing money.

And anyway, you can find these items at used book stores, online, or now as electronic downloads from WotC's site, so the need for physical reprints is very low

Last Point: Luxury

When it really comes down to it, games are luxury items. If you think they're too expensive, don't buy them. You can always find used ones online, and with the electronic downloads and people like Monte Cook releasing quality new products as PDFs for just $5, and all of the free material on the internet, and the fact that you can create your own material, you don't need to buy new printed RPG books.

I think new cars are too expensive for what you get out of them; you don't see me complaining about how new cars are too expensive ... you see me not buying one.