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Subject: Questions about Profitability and other Business rss

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Daniel Burnett
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Connecticut
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Hey everyone, my partner and I are currently working on writing a pitch for an entrepreneur group we're part of and we are having trouble locating some statistics about the profit margins of board games and general revenue statistics about the industry at large.

If anyone has any direct information for us that would be great to hear, but also, if you can sort of guide my nose in the right direction that would be awesome. We have both had trouble finding the info we seek with generic google searches. A more focused location would be incredibly helpful.

Thanks y'all.
 
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roger miller
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I have never seen such information posted anywhere. As a publisher I can tell you that the concept of profit margin is really difficult with boardgames. To get any kind of cost efficiency you must produce all of your print run at one time. Then you have advertising, storage, etc. So you start out day one deep in the hole. Till you sell enough games to break even you have no profit at all. Once you do break even you have no idea how many you are going to sell beyond that point so the profit margin is a constantly changing number.

The mix of distribution methods also makes it quite difficult. If you sell a lot of games direct you make a lot more money then sales to stores and distributors, but knowing in advance what that breakdown will be is impossible.

These problems, plus the difficulty of raising money, is why Kickstarter and pre-order systems are so popular. It allows the publisher to align demand with production and so in theory figure out the profit margin in advance. In reality many people lack the experience to estimate all the costs and get themselves in a situation where no money is made.
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Brad Miller
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That data likely doesn't really exist. You could try asking various publishers/designers, but, why would they give you their private business data?

"Want to know how to make a small fortune in the boardgame industry...?"

Spoiler (click to reveal)
"Start with a large fortune."
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Jeremy Lennert
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Well, I've heard from a couple (word-of-mouth) sources that distributors typically buy board games from the publisher for around 40% of MSRP, but they are rumored to have secret deals with each publisher for slightly different margins.

In light of that, new self-publishers are sometimes advised to multiply their manufacturing+shipping costs by a factor of ~5 to get their MSRP.

Of course, your manufacturing costs depend hugely on the number of copies you can sell. I heard one story where the price drop for printing 5k copies was so big that printing 5k was about the same cost as printing 4k.

All of which is probably only marginally helpful to you. Sorry.
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Jon Moffat
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I can really only echo what has been said already.

We have looked into putting together solid investment-type projections for investors and have come up short.

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John "Omega" Williams
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TheSixofClubs wrote:
Hey everyone, my partner and I are currently working on writing a pitch for an entrepreneur group we're part of and we are having trouble locating some statistics about the profit margins of board games and general revenue statistics about the industry at large.

If anyone has any direct information for us that would be great to hear, but also, if you can sort of guide my nose in the right direction that would be awesome. We have both had trouble finding the info we seek with generic google searches. A more focused location would be incredibly helpful.

Thanks y'all.


1: Varies from one to the next and how a publisher uses the funds. Some have nearly zero profits after all expenses as they funnel the money into new product.

2: Profits tend to be very low unless you have a big enough infrastructure and deals going to knock the costs down. The smaller the scale the less the profits. The bigger the scale the more work is needed to acquire and maintain contacts.

According to a cost breakdown from one of the people who worked for Metagaming. After all expenses of production. The company was lever with I believe he said 5% profit.

60% goes to retailer, up to 3-5% goes to the designer, up to 20% can go into production depending on components. And so on.

Self publishers invariably find out the brutal truth of publishing. It COSTS! And as the publisher there is no safety net. Especially not now-a-days with so much competition.

Figure out what you want to make and then start doing some projected breakdowns of costs. Just the production costs alone can be a real eye opener.

Storage. Shipping. Advertising. Office space. More things that may factor in.

Quick rundown from my own book sold wayyyy back.

Production was around 1$ per book. Shipping worldwide was around 5$. The pack in comic was the costliest component at 2$. Sold for 12$ Profit was 4$ each. Which was pretty good as I was bypassing several costs in the process. Had the game gone through retailer I'd have had to increase the cover price to take into account the 60% cut. So my little 12$ game would have cost 20$ or so. Later advertising in a gaming magazine was brutal cost extra.

200 copies sold. Total profit probably 600$ after advertising.
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Alex Vandertol
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As the Father has loved me, so have I loved you, now remain in my love. You did not choose me, but I chose you, and appointed you so that you might go and bear fruit, fruit that will last. -- Jesus Christ
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Here's a great article on the subject:

https://blog.foxtrotgames.com/2016/02/05/distribution-cash-f...
 
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