There is some simmering anger over the price of the upcoming D&DN books. Again, $20.00 for the intro/basic set and $50.00 for the phb and presumably at least $50.00 for the other two. So, let's conservatively say $150.00 for the game.
But see that production price per unit up there? That represents the mythical 10 to 1 ratio everyone shoots for. Haha. Rare. Most price points run between 2 and 3 times the cost of production. Let's give Hasbro the benefit of 5 times the cost of production. This means its costs a about $10.00 per unit to produce or $5.00 more than I mentioned. This leaves $8.00 profit per book. Lets stick with $8.00 profit pure and simple per book.
That's pretty good in my book. Or is it? Because this book is part of a series the product is never actually finished. Its a product line. So lets assume that for the next year Hasbro has to keep some people employed for the next to keep the line alive. How many. Well, lets see what we got on the phb alone.
Let's say 500,00 books are sold (and that is a freaking lot.). That is $4 million in profit. So how far will that go?
The cost of employing someone can be staggering. The estimates range from 1.25 to 2 times the salary. This includes matching state taxes, fed. taxes, unemployment comp taxes, Medicaid/care, booth space, office space, phone, computer, programs, medical, retirement, pencils, vacation time etc etc etc. Companies covert a staggering amount of expense beyond salary. Even water costs money. I am going to go with a conservative 1.5.
So a $30,000 a year position will cost $45,000 a year. If one has ten employees that roughly $550,000 a year. Now I am going to throw in $50,000 a year to management of WotC and unrelated to the product for $600,000 a year. That is $3 million for 5 years. With $1 million left over, or $200,000 a year or around $17,000 a month or one very low paid secretary for five years.
So uhh, yeah. Again, wild guess. So you can see, overall company profit, development cost, line costs etc. are not included.
So is it a lot of money? I don't know. It sounds like a lot. But looking at numbers it does not seem to feel like a lot.
Real value is generally easy to measure. A business must account for the costs of labor, raw materials, shipping, marketing and product development, which allows it to calculate the product's real value.I am going to a gross and unfair thing. I am going to guess at the real value of the product - just the phb. From development (time and energy) to end run delivery should ideally not cost Hasbro more than $5.00 per unit. That is the idea. This leaves $45.00 in profit per book. That's a lot. Well, until you consider there is a 50% markdown into the wholesale market. So $25.00 goes away. This is $20.00 in profit per book. Still great, in fact awesome! Until the IRS comes calling and they take, lets say $5.00. OK, so still $15.00 is not bad. Well, let knock of another $2.00 in distributors fees. That leaves us $13.00. Ahh we are getting iffy here but still, if enough volume is moved, it's awesome.
But see that production price per unit up there? That represents the mythical 10 to 1 ratio everyone shoots for. Haha. Rare. Most price points run between 2 and 3 times the cost of production. Let's give Hasbro the benefit of 5 times the cost of production. This means its costs a about $10.00 per unit to produce or $5.00 more than I mentioned. This leaves $8.00 profit per book. Lets stick with $8.00 profit pure and simple per book.
That's pretty good in my book. Or is it? Because this book is part of a series the product is never actually finished. Its a product line. So lets assume that for the next year Hasbro has to keep some people employed for the next to keep the line alive. How many. Well, lets see what we got on the phb alone.
Let's say 500,00 books are sold (and that is a freaking lot.). That is $4 million in profit. So how far will that go?
The cost of employing someone can be staggering. The estimates range from 1.25 to 2 times the salary. This includes matching state taxes, fed. taxes, unemployment comp taxes, Medicaid/care, booth space, office space, phone, computer, programs, medical, retirement, pencils, vacation time etc etc etc. Companies covert a staggering amount of expense beyond salary. Even water costs money. I am going to go with a conservative 1.5.
So a $30,000 a year position will cost $45,000 a year. If one has ten employees that roughly $550,000 a year. Now I am going to throw in $50,000 a year to management of WotC and unrelated to the product for $600,000 a year. That is $3 million for 5 years. With $1 million left over, or $200,000 a year or around $17,000 a month or one very low paid secretary for five years.
So uhh, yeah. Again, wild guess. So you can see, overall company profit, development cost, line costs etc. are not included.
So is it a lot of money? I don't know. It sounds like a lot. But looking at numbers it does not seem to feel like a lot.
1 comment:
Another factor to consider is the perceived value of the product. For me, the price would have to be rather low before I would consider buying it. I have multiple copies of 1st edition, multiple copies of 2nd edition but just a single copy of 3rd edition. I own copies of many other games, not to mention C&C.
I am sure there are those who will buy any new edition that comes out, but as the price goes higher some of them will give it a second thought.
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