Making Board Games Your Business
So, you’ve decided to self-publish? How much does it cost to develop, market, and manufacture your game? Beyond that, how many games do you need to sell to make a profit?
These are questions that every publisher asks, and the answer to both is that it depends.
As independent publishers we have the ability to define our investment in a project, and move the scales on what is necessary to be profitable (or if this is a passion project, to not take a bath).
A hoard of coins from Oath
But, where and how we invest our money also impacts our probability of success. And, if we plan to launch multiple games, then how we grow our audience and the product we deliver on our first project will impact how easy it is to launch a second successful project, and a third, and to build an actual company.
Let’s dig a little deeper into the major costs of bringing a game to market:
Development
Marketing
Production
Distribution
And then we’ll get into a couple of case studies of recent titles.
Development Costs
The biggest chunks of this line item are art, component, and graphic design related. There may be other expenses like playtest components, external developers, and random things like $30 a month for InDesign.
Most of these expenses will occur before your crowd funding event. Many campaigns launch with only some of the art completed, and additional component design work to do, but you’ll need a large portion of the work done (and paid for) in order to get backer buy in.
The evolution of some of the artwork for Nut Hunt: The Orchard (WIP) by Steve Nickel
Development costs can vary wildly across games. Jakob Rozalski level artwork would likely run you in the tens of thousands of dollars for a typical midweight scope game (I don’t know if he is for hire, but check out my guide to board game illustration for info on pricing and sourcing artwork). On the other end of the spectrum, royalty free artwork might be a few hundred dollars, if that.
Graphic and component design is a similar story. You should expect $40-$100 an hour for a designer. Full development on a board game could run from a few thousand dollars to tens of thousands for component heavy big-box miniature games.
Marketing Costs
Marketing costs come in a few varieties: paid advertisement (facebook & google ads, banner ads, etc), paid previews and reviews, and ancillary costs like conventions. Plus, you need actual marketing assets: prototype games, professional quality landing pages, video previews, graphics, and copy.
Just like with development costs, marketing costs can range from a few hundred dollars (prototypes & free reviews) to tens of thousands of dollars on Facebook advertisements alone.
Marketing is a whole can of worms, that I am not an expert in (I recommend following Andrew Lowen on Facebook and checking out his company Next Level Web for more info on marketing).
Regardless of your experience, make sure to begin planning your marketing strategy early. Whether you are banking on growing your TikTok in a content marketing push, or on a great review from Rahdo, you’ll need to understand the cost, and effort to access different channels successfully.
Production Costs
Production costs are pretty easy to figure out. Once you know your basic components you can request for quote (RFQ) manufacturers.
Manufacture + Freight (and associated duties) is called “landed cost”. This is the cost to make your product and get it to your fulfilment provider in a local market. Freight shipping is a mess right now, but talking to designers on forums can give you a pretty good idea of where it’s been historically.
If you aren’t ready to RFQ manufacturers, you can also back into landed cost as roughly the MSRP of a game divided by 5. This won’t be exact, but if you find a number of games with similar components as the game you are developing, it should get you pretty close.
Keep in mind economies of scale. Here is an early RFQ we got for Nut Hunt.
Freight & Fulfilment Costs
Distribution is comprised of freight, fulfilment, and shipping.
Freight is the cost of shipping your game from the factory to your local fulfilment providers. It’s kind of a mess right now, but the best way to get a handle on it is to reach out to your factory rep, or freight forwarder. If you aren’t at the stage of talking to a factory rep, it is still worthwhile to think about and plan for.
Galaxy Trucker - for flat rate interstellar fulfilment
Your fulfilment provider takes your games off their pallets and re-packages them for local shipping. For fulfilment rates you will want to get quotes from fulfilment companies. Jamey Stegmaier has a great list of global fulfillment providers (list, and article for context).
A rule of thumb is that fulfilment is $2 + shipping costs. This can vary based on market, sorting or bundling fees, etc. Shipping cost will be based on box dimensions and weight (we get into it a little in this article).
The normal mode of operation is to charge for fulfilment & shipping costs after the campaign. Some campaigns subsidize shipping, or local duties. Even if you, as a publisher, are passing on shipping costs, you need to understand shipping rates to understand cost to consumer, for setting your prices and ensuring the true cost of your crowdfunding provides early supporters the best value possible.
Break Evens
Before we get into examples of successful campaigns, and take a look at their economics, I want to talk about break evens.
Your break even is the number of units sold to recoup your investment. Additional units beyond that point will account for your profit, whereas not reaching that point will result in a loss. While pinpointing a break even will be challenging (you’ll have variability in margins based on scale, geographic skew, and distribution channels), you should be able to get a pretty good idea of your break-evens relatively early in your project development.
Let’s take a look at a hypothetical game selling only through Kickstarter. For simplicity’s sake, we’ll assume that all fulfilment is US domestic, and that there is only one pledge level (base game) with no reward-less pledges, add ons, or stretch goals. It also assumes that all printed units are sold at cost, so no-added benefit from selling additional units through other channels, or scale.
The model (which you can find here), is a very basic representation. You should always account for potential overruns, and unexpected costs.
But, I think it is useful. It can give you an idea of the feasibility of your business model, and your campaign reach. It can help you dial in how you think about pricing, and the component needs of your game.
A business model isn’t a binding contract, and it is only an approximation of reality - it is just a useful tool to help us level set our expectations and navigate our projects.
Putting Numbers to It (Case Studies)
Let’s break down the economics of a couple of recent projects and see what they tell us about their business models.
Micro Dojo (Prometheus Game Labs & Ben Downton)
Micro Dojo funded earlier this summer with $23k from 1,922 (campaign was in GBP, but I am converting everything to USD for comparative purposes). Ben provided a post campaign update with uses of money raised.
Ben’s business model was for a lower monetary investment. He spent only $1,616 to develop and market the campaign. His marketing expenses ($923) were primarily in printing prototypes. The rest of his marketing was word of mouth and his involvement in the community.
His development costs ($693) included art and some miscellaneous costs. Ben was able to keep development costs to a minimum by doing the heavy lifting of graphic design on his own, as well as going with a simple, flat color, art style.
Ben earned $7,849 of profit which is an impressive ROI (return on investment) for his upfront costs. But, this doesn’t account for hours spent developing and launching the game. Ben estimates that he spent about 1,000 hours on Micro Dojo over a ten-month period. That means he earned about $7.85 /hr (which I believe is substantially less than his day job).
As a passion project, Ben has built an impressive and successful first campaign. To scale his success into a sustainable business model will take additional campaigns, each iteration building on his previous success.
[Update: Ben & Prometheus are following up their success with Micro Dojo, with: Micro Dojo: Clan Loyalty]
The Shores of Tripoli (Fort Circle Games)
Fort Circle put out an excellent update walking through their economics, both at Kickstarter, and beyond. While their entire article is worth a read, I am going to call out / highlight a few points.
Fort Circle spent ~$20,000 designing and developing The Shores of Tripoli. This line item includes a few expenses that I would think of as marketing (like video production). Their direct marketing budget was $12,000.
Ignoring corporate overheard, this means their to market budget was about $32,000 (although, some of this marketing cost could be post campaign).
Out of their 5,000 unit print run, Fort Circle sold about 1,000 units through the Kickstarter campaign. They are relying on distribution, and non-crowd funded direct to consumer to drive the bulk of the sales.
The below table assumes that Fort Circle games sells the remainder of their 5,000 unit run (they were about halfway through as of August 1st).
There are two really cool takeaways from Fort Circle’s disclosure. First is the massive margin differences between channels. Their EU margins are especially tight due to low economies of scale on freight, and higher international shipping expense (I am guessing they freighted to a UK fulfilment partner).
Second, I really appreciate Fort Circle delving into detail not just about The Shores of Tripoli, but also their overall business model. If they launch three games a year at 5,000 units, the corporation will earn about $150k a year after corporate taxes (keep in mind there will be additional individual taxes if they withdraw the money).
There’s More than One Way to Business
Prometheus and Fort Circle had very different approaches to their game launches. Micro Dojo was a small budget project focused on Kickstarter as the primary distribution channel. The Shores of Tripoli is a medium budget project with a heavy sales component after the initial crowd funding event.
Whether you are launching your first game as a side project, or looking to transition into the industry full time, it’s important to think through your projects’ business model, figure out how to efficiently allocate your resources, and what that translates to into games sold and break evens.
How detailed of a business model do you have for your project? What aspects of the business economics are you struggling to figure out?
