On the Economics of Tabletop RPGs
Almost 30 years ago, I wrote an article for TSR UK’s Imagine magazine on the subject of converting characters and adventures between different roleplaying game systems. I remember taking an unscientific poll at the time, and based on the content and advertising in the various RPG magazines I had to hand, there were around 50 tabletop RPGs on the market. Today, a quick look through DriveThruRPG.com turns up 97 game lines, and I’m sure there are many more that don’t sell through that site.
The year after my article was published, GenCon attracted 5,000 attendees in its first year in Milwaukee. Last year, a reported 36,733 people went to Indianapolis for GenCon, to say nothing of those who attended the various smaller GenCons around the world.
All this might lead the casual observer to believe that the tabletop roleplaying hobby has never been stronger or more popular – but I’m not so sure. Here’s why:
The FLGS Under Threat
In the 80s and early 90s, I was usually aware of 2-3 Friendly Local Game Stores (FLGSs to us game geeks) within a 30-minute drive of wherever I happened to be living at the time. They were places where gamers could go and browse, maybe play a demo or two, pick up new releases for whatever games they played, and discover new games.
Now, the FLGS is almost an endangered species. The major games – D&D, Pathfinder, and maybe one or two others – can now be found in big-box bookstores, but they don’t carry anything like the range of stock found in an FLGS, and small to mid-range titles are absent altogether. The online retailers carry a much broader range, but browsing takes serious determination. I suspect that game conventions are now the main way that gamers discover new games.
Follow the Money
When I quit Games Workshop in 1990 to set out on the uncertain seas of freelance game writing, I was paid between 2 and 5 cents per word. Twenty-two years later, that’s what most of the tabletop RPG industry still pays. A handful of the larger publishers pay 6 cents per word.
According to DollarTimes.com, a 2012 dollar is worth only 58 cents from 1990. So in real terms, payment rates have declined by more than one-third over the last 22 years. Many old-school tabletop RPG writers, myself included, now make their living in the better-paying electronic games industry. Many of the people I know in the industry – even those who own and operate RPG publishing companies – list a “day job” on their LinkedIn profiles, which is a sign that they can’t make a living from game publishing alone.
So what’s happening? Why do we see growth in the range of tabletop RPG titles and increasing attendance at game conventions alongside clear evidence of a drop in profitability? I can think of a couple of reasons.
Lowering the Bar
In the 80s and 90s, getting a tabletop RPG to market was a serious undertaking. Layout was still done with scissors and paste. The first desktop publishing programs were so expensive that only professional publishers could afford them. A print run of at least 5,000 copies was needed to break even, and publishers had to pay for printing and shipping before a single cent rolled in from sales. Nowadays, e-books and PDFs have slashed production costs and money tied up in unsold stock. Word can be used to turn out respectable-looking pages. Gamers who would have started typewritten fanzines in the 80s now run blogs and sell PDFs online.
I’ve always said that if you scratch a roleplayer, you’ll find a would-be game designer underneath. Today, the bar to entry is so low that anyone with a computer and an internet connection can start their own publishing house – and many have. For most, it’s just a hobby. For a few, it’s an attempt to make a living – or at least a little cash – from the hobby that they love. But almost no one outside a handful of the largest publishers is making any kind of a living at it.
So What About GenCon?
It’s easy to see how DTP, PDFs, POD, and various other acronyms have led to a growth in the number of tabletop RPG publishers. But surely the numbers from GenCon prove that the market is growing in proportion, right?
Yes, more people are attending GenCon than ever. However, if the market for tabletop RPGs is growing at all, I’m fairly sure it’s growing far more slowly than GenCon attendance. I would love to see how the age breakdown of GenCon attendees has changed over the last 20 years or so, but I haven’t been able to find any statistics on the subject. I suspect that a major factor in the rise in attendance is the increase in tabletop roleplayers’ disposable income as they get older. Couple this with the decline in the brick-and-mortar game stores, and for many people conventions have become the only place to mix with other gamers, play demos, and discover new titles.
But Don’t Panic!
Does this mean the tabletop RPG industry is dying? Far from it. It’s just not booming. It will never be what people hoped it would become in the late 80s, when TSR released a long-box edition of D&D aimed to fit alongside Monopoly and Clue on toystore shelves. For some, it’s a hobby that maybe brings in a little cash. For a very few, it’s a living doing something they love. There’s a lot to like about the fact that you can start your own publishing house from your basement or garage. As long as everyone realizes that the odds of striking it rich are vanishingly small, no one will get hurt.
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Graeme Davis 
Although I counted 97 game systems on DriveThruRPG, it is perhaps more telling that they list 1,546 core rulebooks for sale, and I lost count of the number of individual publishers at about 600.
I think that one effect of lowering the bar is to make it harder for a pro (i.e. attempting to survive on sales rather than burning through cash as an ego boost) publication to make money. Some fraction of the pro game’s potential purchasers are going to be satisfied with a non-pro game instead.
FLGSs have certainly died out. Starting in the town of 100,000 people where I live, the nearest games shop is three-quarters of an hour’s drive away. Retail space has got more expensive, and games shops (other than Games Workshop of course) haven’t got the constant level of sales.
I take a risk by generalising from myself, but: when I was playing in the mid to late 1980s, I either owned or knew people who owned the core books of most of the games that were around. When a new system came out, several people I knew would buy it no matter how bad the reviews (OK, except for Amazing Engine). As I’ve got older, I’ve got much less inclined to jump into a new system: I have one system that I use for most purposes (GURPS), and I’ll only occasionally use something else if a game really seems to demand it (e.g. Pendragon). So I’m far less likely than I was to buy the core book for a new game; I don’t care about rules, and I’ll only jump if the setting sounds really interesting (and then I’ll be converting it).
It would be interesting to see the sales numbers for those 1546 core rulebooks. I rather suspect that they tail off sharply, i.e. that the #10 seller moves a smaller fraction of #1 than it did when there were fewer games about.
Sales figures would settle the question once and for all, but most publishers keep them very close to the vest. But I believe you’re right: after D&D, Pathfinder, and a handful of others will come a very long tail of less successful systems, some selling a hundred or fewer copies per year.
I suspect most publishers of TT RPG PDF rulesbooks don’t want to reveal their download / sales figures because they are probably rather a bit depressing, even when they post their rule books for free, and publishing that information might be a bit too hard to live with. After all, even though the barrier to entry is so much lower than it used to be – it still takes a LOT of work to produce a new rules system, what with the design, testing, artwork, and then the layout work for a PDF which often times requires fairly sophisticated software to do reasonably well. It can take a year to go from concept to completed Rules PDF. It’s a big deal, even though the actual publishing part is relatively easy. So putting in all that work only to see a few hundred downloads at best… not so fun. And most certainly, no matter the awesome fantasy at the start… financially it’s pretty much a disaster. That said, most homebrew publishers simply take that in stride, put their games out there regardless, don’t expect much other than the occasional “dude, that’s cool, thanks”, and that’s about it. It’s a labor of love, and all that. Money is no concern, and so on.
Whether or not this process is in fact suffocating the industry at large remains to be seen. I suspect it is. When you have 1,546 core rulebooks for sale you have glut in the market. And financially speaking no one can compete with a glut in the market. It sinks all boats because it drives the price point to zero. And no matter how much you enjoy and love your hobby… it’s just incredibly hard to put in the amount of work necessary to produce a decent RPG rulesbook and then watch it go absolutely nowhere on DriveThruRPG. I have friends who have done so, and when queried they say they’re happy when one hundred people download their free PDF. That’s not a sustainable model, and financially it’s frankly impossible. You are simply throwing time/money out the window with a PDF rulesbook project. So if you are not into it for vanity publishing you’re going to very likely be disappointed. Even the most extraordinary successes thus far are measured in the few thousands of sales.
In fact, Jaron Lanier wrote some interesting stuff on this point in his book “Who Owns the Future”. http://www.amazon.com/Who-Owns-Future-Jaron-Lanier/dp/1451654979
Another thought that comes to mind – with 1,546 RPG rulesbooks out there, it gets increasingly difficult to come up with something new, or something to distinguish your book from everyone elses. Most of the logical extrapolations and clever mechanical innovations have probably already been published by others multiple times in different forms. That leaves settings. And how many times do we need a new version of Middle Earth? Green Orcs & Dwarves and Red Orcs & Dwarves and Grey Orcs and Dwarves only get you so far. So what happens? We get the Interstellar-Lycanthropic-Rogue-Wizard-Hamburger Class combinations, and Genre-Colliding backstories. It stops feeling new, and starts feeling a little ridiculous. So there’s two problems stemming from the root problem… Glutting the market generally speaking is a bad thing, but doing so in the crowded field of difficult-to-produce RPG Rules … kind of borders on disaster.
I suppose, however, that DriveThruPRG knows exactly how many sales there are. So if anyone could provide actual and accurate statistics on the state of homebrew RPG Rulesbook publishing its them. But I doubt that they will publish their statistics. Why would they want to highlight something that might cause a lot of their clients to throw in the towel?
The solution … hard to see, it is. However, I do think there is a solution, and it has to do with an observation Ryan Dancey made in his RPG Market Survey of 2000. He mentioned that he believed the future of RPGs is in hybrid software that helps GMs to Gamemaster their games. Yup. I think that actually is the future. I began working on that concept in 1994, actually, and have produced a few versions of that kind of hybrid software. Nothing I cared to put out to the general public, until recently with my latest version which I think might be suitable for general consumption. The software is designed to allow GMs to create and manage their own worlds online. It handles all of the math and grunt work and leaves the creative aspects to the GM. This is where I think profit can potentially be made. But of course, the barrier to entry for this kind of thing is quite high. But it is where game designers have a chance to innovate and produce a value added product. And that is where I suspect we will find profitability in the world of RPGs going forward.
The rate of pay figure you cite is even worse: that range was the common per word rate for pulp writers in the 1930s, I recall reading. Back then it was almost a living rate for a prolific author. Now, calling it a “pittance” would be being kind. It’s one reason I decided to stop writing professionally for the industry: there just isn’t enough compensation for the time and effort. If I were to undertake something now, it would be because I enjoyed the game and the project in question, not for the money.
I remember that’s what the pulp writers were paid. Adjusted for inflation, 2-5 cents/word in 1935 is equivalent to 33-85 cents/word today, and I suspect any tabletop RPG publisher would laugh if that sort of rate were mentioned. Most mainstream magazines pay 10-25 cents/word right now, with only a handful going up to $1/word: the real prestige titles like Playboy and the New Yorker.
Like you, these days I only take tabletop RPG writing if I like the game, which means Colonial Gothic and the occasional WFRP title.
Yes, the division of the industry is definitely an issue; however, not the main issue in its lack of popularity growth.
Looking at RPG’s on the whole, the interest is quite simply there…. and is at a state that it’s never been before. Look at the MMORPG market – which is quite possibly the biggest genre out there in terms of video games.
WoW itself is somewere in the 10 Million bracket from the last time that I checked… and this is no small number (obviously).
What I’m getting at is that the issue isn’t just the economics of the role playing game industry. It’s the changing with the times. Some of these major industry icons need to step up to the plate and make a “Being a Geek is Cool” campaign, using social media as its backbone… instead of it being non-existent.
I suspect that “changing with the times” equates to playing MMORPGs instead of the tabletop version. Skotos has tried to bridge the gap, but I haven’t heard of it setting the world on fire. I expect some GMs may run games by email or even videoconferencing, but getting a games group together regularly gets more difficult as one gets older, friends move away in search of work, and so on. Meanwhile, those who *do* have the time and the friends on hand – mostly high school and college students – are probably having LAN parties to play Call of Duty or some such.
I don’t know how easy it is to find people to play D&D and Pathfinder. Probably easier than it is to find people who want to play the sorts of game I run.
When I got started, dungeon-bash was the default mode, but players would ask awkward questions: what happens if I go back to town rather than down this dungeon? What if we try to rob the inn? To me, that was the springboard into the sort of role-playing I do now, which is largely about the personalities of the PCs and NPCs rather than how many pluses they get. And D&D has been usefully supplying gamers who got bored with it and wanted something a bit more emotionally complex. But MMOs don’t do that: everyone knows that there’s no point in role-playing anything more sophisticated than “I am a dwarf, I like axes and beards and ale” because it’ll never have any influence on the game. (Yeah, I know there are MMO roleplayers, but there seem to be very few of them.) So when people get bored with bashing monsters they’ll play a different computer game, rather than look for a different RPG group.
So my concern is that if D&D loses to MMOs – or becomes a clone of MMOs – it’s going to be less prone to feed what I regard as the more interesting side of the hobby.
That’s a valid concern. I didn’t look at 4th edition D&D myself, largely because I knew I would not be writing for it, but I heard that it tried to align itself with the gameplay aesthetic of MMORPGs rather than the evolving (and increasingly Baroque) tabletop style that led to 3.5.
We’ll have to wait and see what 5th edition brings. The fact it was announced relatively soon after 4th edition makes me suspect that 4th edition didn’t sell well – an impression reinforced by the planned public consultation. If that’s the case, then at least for now we are safe from tabletop RPGs that are clones of MMOs.
“Crowdsourcing” has a lot to do with changes. There are many non-pro people dying to get into print, and willing to sell all rights for 2 cents a word. Quite apart from the people who self-publish electronically.
Furthermore, the result is that royalties are rarely paid, instead everything is work for hire. I stopped writing from Dragon nearly30 years ago when they insisted on buying all rights, and I still don’t “work for hire”.
FLGS are suffering from the general move to online sales. At some point it will balance out, but by that time most FLGS will be gone. Bookstores are an example of a dying breed, Borders gone and no one wanted to buy it, Barnes and Noble maybe in trouble. Print objects are pretty easy to sell online.
Oversaturation has occurred, too. Who needs more RPG stuff, we all have tons of it. Speakers at GenCon suggested a print run of 500 was prudent for a new RPG book. Obviously, the few big companies such as WotC can do more.
‘Twas ever thus. Over my 25 years in the games industry – both tabletop and electronic – I have witnessed multiple employers telling the worker bees that they had better behave themselves because wild-eyed fans were lined up twelve deep to take their jobs and work harder for less money. Game writers are a commodity that is seriously oversupplied, and the laws of economics are what they are.
As to the decline of the FLGS, it’s true that online stores are picking up the slack as far as sales go, but they can’t offer the same browsing and chatting experience, no matter how good their forums are. And I think that hurts smaller publishers who are desperate to get their game noticed. Stumbling across reviews is far harder online than in a paper magazine, and I don’t know of a single RPG magazine that still publishes in print. As with all forms of e-publishing, getting noticed by your target audience is the biggest challenge facing small RPG publishers, and in its way it is as tough to overcome as the cash bar to entry that existed in the 80s.
You make some very valid points there Graeme, and I think it really depends on what we call “booming”. The hobby is indeed booming from the point of view of work being published, specially the PDF market. However the hobby is far from booming from the point of view of profitability.
For that to happen, more companies than not should be making a profit, and the sad fact is that they don’t.
The production of an RPG by a hobbyist is close to null in terms of costs. People write their books at home as a hobby, shows them to their friends and families, decide to make it look as good as they can (mostly failing) and then go onto DrivethruRPG and try to sell it.
More often than not it won’t sell, but because there are no overheads other than time, they don’t make a loss either.
That is not success.
If the PDF selling sites were more discerning in what they sell and only allowed certain standard of production to come into the selling market, the amount of product for sale would be a tenfold.
I think the RPG industry (and I meant he industry, not the plethora of self-publishing hobbyists) will remain very much the same, maybe with a little bit of increase, in the next 5 years.
I’m afraid the panorama for you professional writers is rather bleak. Too many people doing too many things and a lot of professionals in a crowded industry makes for a tough environment.
I, though, will keep my eyes peeled for the veterans who know what they are talking about, and the youngsters who know how to challenge that.
The rest… well… I don’t have a lot of time for that!
Good points, Paco. Some kind of quality control would be useful, but it’s unlikely to happen. Unlike print product, e-books cost almost nothing to keep “on the shelves” indefinitely, so the download sites have no economic incentive to be discerning about what they stock. The best thing about e-publishing is that anyone can get published; the worst thing, that anyone can get published.
Some better way of presenting reviews would be a good thing. In the old print magazines, one could flip through and read reviews almost by accident, but online one has to look for a review of a specific product, which means that one has to already know that the product exists. This is not an ideal way to discover new games.
You’re right that RPGs don’t offer much to the professional writer/designer. That’s why almost all of the names from the 80s – Ken Rolston, Lawrence Schick, Zeb Cook, Jim Bambra, and of course me – now make their living in video games, while a few, like Ed Greenwood and Matt Forbeck, focus mainly on novels.
Good article Graeme. Here are some of my recent thoughts on the subject: http://nerdtrek.com/deeper-look-pathfinder-mmo/
A good discussion going here. Glad I found it. In addition to all those games you mentioned for sale, Graeme, there’s also the glut of free rpg’s for download out there, and many, many more game designs that people are playing, that haven’t gotten into any statistics. And even if these aren’t on the market, they still occupy the attention of a certain percentage of gamers, which also shrinks the number of potential consumers. The fact that some still play AD&D, Star Frontiers and other games out of print also eat into those numbers.
It’s easier now to get a game on the market than ever before, as you mentioned, and harder than ever to make a buck off of it. While I have an rpg design in the wings that I’m slowly revising, I’ve turned my attention to novels as well. Unlike designing games, they don’t require a budget, just my time (which is a precious commodity, but just sayin’).
GenCon is definitely story oriented, but these days it’s often not RPGs, but anime/cosplay, film, fiction, and boardgames that are story-driven. So it’s hard to say how much of the attendance increase is attributable to RPGs.
The same thing that’s happened to the RPG market may be happening to board and card games. It becomes easier as time passes to self-publish, the number of games published grows, and excepting the really big publishers (Hasbro, FFG) most good games sell rather poorly because there are so many competitors.
I’m surprised in the above discussion that no one pointed out that computer RPGs such as Skyrim, not just MMOs, can sell in the millions. Many people who might have been tabletop RPGers in the past, play on computer.
4th edition D&D was an attempt to WOWify the game. Evidently it failed, seems to me I actually heard that Pathfinder was outselling 4e D&D! Hence the move to D&D Next, which seems to be (so far) an amalgam of editions 1-3 with very little of 4 in it.
I think it’s worth remembering many people’s reaction to D&D3 when that came out – that it was an attempt to Everquest-ify the game, and in particular to make it possible to have a computerised DM (which more or less happened, with Neverwinter Nights – which was originally intended to become an MMORPG). The consolidation of status flags and the standardised encounter ratings so that a party would always meet enemies that were the right level to be a challenge didn’t start with 4e. But what’s even more important to my way of thinking was the optimisation of the Skinner treadmill – in 3e, as opposed to earlier editions, there’s always a nifty something waiting for you when you get to next level, always a new power on the horizon to tempt you to keep playing.
They’re forgotten now in the wake of the d20 boom and bust, but lots of gamers abandoned D&D at 3e – and more at 3.5e – and they were fertile ground for recruitment to play GURPS. (Or other non-d20 games – that’s just the one I happen to prefer.)
Here’s a link to a more recent post on getting a game published, which may be of peripheral interest to this discussion.
I once heard 3e described as “Fantasy Squad Leader”, which seemed apt. But the big difference between 1 and 2 on one hand, and 3 on the other, is that in 3e the “one man army” idea was worshipped, and the combined arms cooperation that was vital to 1e was abandoned. I suppose that might be part of “Everquestifying” the game. The one virtue of 4e is that cooperation is once again vital to survival.
A few more numbers just popped into my head: useful data for when you’re considering the financial side.
1. First-quarter sales will account for 30-50% of lifetime sales for a product, no matter how long you keep it in print. Every month after release, the numbers decay exponentially.
2. If, from month 4 on, you are selling more than 20 copies of a title per month, you are doing well.
3. If you release more than one product per quarter, you’re getting close to choking your market: your products will start to compete with each other rather than adding mathematically to total sales. You’d think this effect would be proportional to unit price (i.e. more expensive products choke the market more quickly/effectively than cheaper ones, enabling you to release a larger number of low-price items before the choke effect sets in), but for no reason I’ve been able to fathom, price does not seem to be a factor.
Also, I haven’t read this myself but I’ve heard good things about it: http://rpg.drivethrustuff.com/product/60161/I-am-Mongoose,-and-so-can-you! The author is certainly in a position to speak with authority. He’s also alert for every chance at profit, hence the price tag on this thing: he remembers that in the 19th-century gold rushes the real money was made by the people selling picks and shovels.
My guess on the cannibalistic competition of #3 is that people regard “a supplement” as something of a relatively fixed size: and it’s not the price that matters, it’s the head-space it occupies and the time it takes to read, and players are used to standard values for both those things. (After all, one supplement takes one line in the catalogue.) So buying three supplements feels like more time-commitment to a game line than buying one, even if the total page count is the same.
If this is valid, it would suggest that companies releasing many short supplements should find their customers disappointed by the lack of content in each.
Ryan Dancy has pretty much the same opinion, and a lot of good information. I strongly recommend reading this before making any commitment to the tabletop RPG industry.
http://www.enworld.org/forum/showthread.php?315800-4-Hours-w-RSD-Escapist-Bonus-Column