A game publishing case study

Jackson Pope of Reiver Games has a post up at Boardgame Geek about the financial history of his company, and a follow-up post on his blog.  Interesting stuff, and he gives a glimpse at the underlying numbers.  There's not enough there to figure out his entire financial picture, but he's said (as I commented on earlier) it looks like he's not making enough money to do this full-time.

It looks like, after an initial phase of hobby publishing (which I'll define as selling very small print runs of hand-assembled games to friends, acquaintances, convention participants, and random internet dudes), he took the plunge and ordered a modest print run of one game, It's Alive, where modest is a few thousand games.  It looks like for his initial game, if I read his numbers right*, his expenses were in the neighborhood of £34,000 for 3,000 copies, or about £11 and change per game.  That seems pretty steep, but it's got a lot of components, great production values, and a nice box (see a picture of the whole game on BGG here).  Also, he printed it in the U.K., which is probably a bit more expensive than Asia, and the print runs he's been doing aren't quite big enough to get to the cheapest production costs, if my experience getting quotes is any guide.  He may also be including non-manufacturing expenses in there, too, such as postage, office space, computers, etc.

He's been selling that game for several years, and he's come out with a couple newer titles since then, in smaller print runs with higher prices and better margins.  It sounds like he has had some success - he's sold 2/3 of the It's Alive print run, and more than half of the other two, and made some money, all in two years - but it's not been enough to replace the income from working.

So, what are the lessons?

• The economics are not bad for hobby publishing - you can probably make enough to cover costs by selling hand-manufactured games at conventions and over the Internet.
• The economics are very tough for mid-scale independent publishing of manufactured products
• You need a second source of income, or significant savings, to go into it.  It can't replace your real job, and you shouldn't expect it to do so.  
• Even if you're clever and do things mostly right, you probably won't ever see enough return to live on. If you do, it will come after years of hard work and investment, but even such work and investment still don't guarantee success.
• You need to buy more copies to reduce production costs and increase margins, but...
• You will only sell so many games per year, and how many is mostly out of your control, and...
• There's probably a finite market for any game, after which you've reached all the easy-to-reach, early-to-buy customers, and your sales will slow to a trickle. 

So, your decision to publish becomes a very important calculation, where you know only a few of the variables (production costs, your financial situation) and have to guess at the others (sales potential, retail price, marketing, total long-term demand), sometimes nearly blindly.

I wish Jackson well, and I hope he's able to keep his company going while earning enough to support himself.   His games look really neat, and his blog is very informative.  It's a tough business, and a bad global economic climate.

*3,000 print run, break even if selling 75% at £15 means £33,750 in publishing costs.