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The Economics of Free

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As regular readers of this blog would know, Cthulhu Reborn has a long history of providing professional-quality Lovecraftian game stuff either for free or almost for free. It’s the reason the blog was founded after all.

Over the years our ambitions have expanded from purely brushing up pre-existing public domain scenarios to creating brand new material and even new settings. That’s been highly successful, and lots of people have picked up our PDFs and printed books. But there has always been a fundamental thing that’s constrained us — namely, the desire to pay writers and artists a fair rate for their original work even when the product we’re creating is free. This is something we’ve tried tackling in different ways over the years.

Our latest experiment in funding free content is Dateline: Lovecraft, which we’ve spruiked several times here on the blog already. The “business model” behind this is that of a core product which people need to buy, coupled with an expanding range of free add-ons that enhance the usefulness of the core, all funded by the sales of the core product. The basic idea is that all profits from the original Dateline: Lovecraft sales will go back to commissioning writers and artists for the freebies. As an example, we’ve already released the first of the free add-ons.

Now, it may seem to the average gamer that having a paid product for sale on DrivethruRPG and RPGNow is a license to print money, but as anyone who’s tried publishing things for themselves will know the revenue from selling game books isn’t necessarily as huge as you’d think. This is especially true when you consider the cut that retailers take from the cover price, and also the cost of producing the books in the first place.

While most people don’t share much information about the financial side of their publication efforts (or Kickstarter fulfillments for that matter), the unique nature of the Dateline: Lovecraft “experiment” makes me think that it’s only fair to disclose some of those details here.

The production budget for commissioning work on the core Dateline: Lovecraft product and its first freebie was about US$410 — that’s the cost of paying Jo a fair rate for her excellent writing in the add-on scenario and the cost of a couple of awesome illustrations from Reuben. The many, many hours that went into creating the Dateline: Lovecraft newspaper prop itself and also the rest of the writing, illustration, and layout work that went into pulling the PDFs together is somewhat of an internal cost (i.e., Cthulhu Reborn did the work itself rather than paying real money for it). We’re not seeking to pay ourselves for any of that.

However, even with that fairly modest external production cost, the core Dateline: Lovecraft product still needs to sell somewhere between 45 and 55 copies to break even. Each freebie add-on will likely cost a similar amount in terms of production cost, so realistically we will be be in a position to release the second freebie once we’ve sold around 100 copies of the core product. Of course, the fact that some people chip in a small contribution in return for the Pay-What-You-Want add-on PDFs certainly helps nudge that along, but realistically most of the revenue will need to come from sales of the core product.

In the couple of weeks since Dateline: Lovecraft was released, we’ve earned enough from sales of the core and PWYW contributions to have hit the “break-even” mark. That is, we’ve now earned back what it cost us to make the items we’ve released. So, profits from here on are now going towards funding the second freebie PDF. Overall we’ve been pretty happy with the rate at which our product has been selling … but obviously we’d be even happier if the PDFs were flying off the shelf. Realistically, it is a very competitive market — there are a lot of great new products being released, especially in the Lovecraftian RPG world — so we’re happy to attract whatever discerning buyers we can.

Speaking of the second freebie scenario add-on, I can also reveal some details of what this product will look like. The scenario will be called “Smoke Green” and be written by Noah Lloyd (of https://reckoningofthedead.com fame). It’ll be about 8,000 words. The all-new illustration for this scenario is an awesome piece by Reuben Dodd, shown above. And yes that is a beaten-up Mi-go in a cage. What’s it doing there? We will have to wait until the scenario add-on (hopefully) gets funded!

In the meantime, if you want to help us along by spreading the word about Dateline: Lovecraft to folks who you think might potentially want to own a copy, we would certainly appreciate it. In the meantime … I guess we’d better get back to mistreating that Mi-go …


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