Sunday, March 15, 2009

Dungeon a’s New Business Strategy and Financial Breakdown

With Monte Cook’s getting up and running this week, I wanted to take a second out and look at the business & financial side of this to find out who well it worked as a money making business. Remember, these are my thoughts and opinions on what I think will happen. Take them with a grain of salt. So here I go… has the ability to be a GREAT money maker for Monte Cook on the basic idea that Monte Cook gets to keep expanding the brand of Monte Cook. First off, the breakdown of the subscription rates of $10 / $9 / $8 per person per month depending on that plan. For argument sake let’s say the subscription break down with 50% of the people getting the $10 a month set up, 30% get the $9 a month quarterly set-up and 20% take the $8 a month yearly set-up. We also are going to estimate that Monte got 200 subscribers for the year. Now many of you might think that is high, but I have had the pleasure of going head-to-head again Monte on and I know how well his product sell first hand, so I don’t think that number of subscribers is too crazy or high.

Using the information from above you can estimate that generates $1,860 per month for a total yearly income of $22,320. Now that is not a huge amount of money, OR is it?

Let’s break this down further and figure Monte’s weekly income is $429.23. Now how long do you think it take Monte to do one day’s worth of work? Based on the first 6 rooms of, the word count on average is 904 words. So in a week Monte needs to write 4,520 words a week or 235,040 words a year on this project. If Monte writes 904 words a day on this, I estimate it must take him 3 hours to write that amount. Figure a little over 300 words an hour. (The faster writers I know in the RPG industry are Steve Long, Matt Forbeck and Shane Hensley who all are well known to write 1,000 words an hour so I think that is a good estimate) This comes out to 9.4 cents per word. The average RPG writer today make between 1 to 4 cents a word, so you can see Monte is way above this with

9.4 cent a word is not a ton of money, right? Well did you also consider what else he will be doing with all those words? I think Monte once he finishes one level or a specific section of, will become a PDF that his sells at RPGNow. So let’s guess out of the total 235,040 words he will write in a year he breaks it down to four - 39,173 word (roughly 64 to 80 pages of layed out & graphic designed pages) sections. Each one of these section book sells for $10 and being Monte Cook he sells 500 copies of each which gets $5,000 minus RPGNow’s 35% rate for a total $3,250 per book for a grand total of $13,000.

And with sales that great, Monte then offers to do print versions for $17.00 each which he will print most likely 5,000 copies. The retailers buy the books at 50% off the retail cost ($8.50) and let’s say the actual cost to print the book, get artwork, advertise and get to market is 75% of the remaining amount ($6.38) leaving Monte earning $2.12 of each of the 5,000 copies of the four sourcebooks for a grand total of $42,400.

So let’s add this all up for a year: Subscriptions – $22,320
PDF version – $13,000
Bookshelf Version – $42,400
Grand Yearly Total: $77,720 OR 33 cents per word.

Now imagine if he uses another person to write this as a guest? How much money does he save? So the question you have to ask is, when are you doing your own business? Talk to you later…