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 Post subject: GW digital "revolution"
PostPosted: Mon Apr 22, 2013 3:02 pm 
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Refreshing the GW site desperate for news about the new High Elves I noticed that GW is also producing e-books and the like. What I also noticed was that these e-books are the same price (or close enough to make no difference) as printed versions. Which brain-donor came up with this idea, the point of e-books is that they would be cheaper since there're much less costs involved in the production and distribution, not to mention storage.

Granted, GW won't likely be losing money over this, because the costs are so low, but sales definitely. You guys think GW will use this as a way to boost profits, even with a very low turnover, or will they change their ways to build this as a respectable, cheaper and good alternative to printed material?

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PostPosted: Mon Apr 22, 2013 3:12 pm 
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In a few of their pages advertising the ebooks they go as far as to say that people whom already have a physical copy but want to take it everywhere should get the ebook version aswell..?!!!

Crack pots...!!


The worst thing is that they're only available on iPads and equivalent, no iPhone PDF format, nor normal PDF for laptops and such...
Absolute aneurism of the prefrontal cortex that was...

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PostPosted: Mon Apr 22, 2013 3:24 pm 
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It's like they WANT to fudge up their entrance to the information/techno age. They're running their operations like some kind of a "The Producers" kind of betting against themselves scheme

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PostPosted: Mon Apr 22, 2013 5:43 pm 
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It boggles the mind. :-k ](*,)

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PostPosted: Mon Apr 22, 2013 5:59 pm 
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Digital army books should be half price, at most, and if you buy a hard copy you should be able to buy the digital for 3/4 of the army book price. it's ridiculous that both are full price.

Edit: Meant at 3/4 discount of army book price, so (25% of full price army book). So buying a $40 hard copy should grant you a special discount to buy the digital copy for $10 in this example.

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PostPosted: Mon Apr 22, 2013 6:03 pm 
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Very specific ideas Teledor!

I figure GW will price the books full and see how it goes. If people buy them, they stay full price. If people don't, price goes down. However, given both the luxury and niche nature of GW products, don't expect a price drop any time soon. Their prices for little pretend men have always seemed absurd yet they sell enough to make profits.

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PostPosted: Tue Apr 23, 2013 8:07 am 
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Teledor wrote:
Digital army books should be half price, at most,

How big a part of the cost do you think the printing and shipping of the book is? I would guess that at most 25% of the cost of the book is the actual printing and shipping, which means that the ebook can be 25% cheaper at most.

I guess it depends on your point of view a bit. In the Netherlands, ebooks are usually around the same price a normal books. Reason is simply that for some reason normal books get a low VAT tax added, while ebooks get the full VAT amount, which gives a 15% difference in actual selling price. So I don't find it all that surprising. Like I said, the printing and shipping of the book are only a small part of the cost.

I do agree that if you already own a physical copy then you should be able to get a digital version at a discount. It would increase digital sales a lot I think, as many people would like to get the extra one if it is only €10 I think. Although it of course leads to a situation where 2 people purchase a single book + digital version and just share the whole thing.

And I also agree that having them only available on iPad (same as the white dwarf realy), is just silly. If you only want a single format, just pick PDF and be done with it. But, working in IT, I've learned that corporate executives sometimes only know about iPads and make them synonimous with everything digital. So perhaps one of them just decreed that they would have iPad content and nothing else...

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PostPosted: Tue Apr 23, 2013 3:03 pm 
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rdghuizing wrote:
Teledor wrote:
Digital army books should be half price, at most,

How big a part of the cost do you think the printing and shipping of the book is? I would guess that at most 25% of the cost of the book is the actual printing and shipping, which means that the ebook can be 25% cheaper at most.

This article quotes the WSJ (behind a paywall, unfortunately) as saying a typical printed book costs about $26.00, netting the producer around $5.85 profit. Meanwhile, the same ebook that sells for $12.99 nets the author a $5.92 profit.

Ebooks are not only cheaper to produce, easier to distribute, nets you a larger profit, hits a larger audience and are more environmentally friendly, they can also be expected to sell in larger numbers due to the reduced price.

25% off for a digitally (as opposed to physical) reproduced commodity is a joke. 90% sounds a lot more reasonable, and considering GW are really in the business of selling toy soldiers, (and not books) they might as well give away free copies of their army books with every model purchase, since the army books exists to support their core business anyway.

By the way, read this. It explains how stuff like simple tables and rules for our toy soldiers are post-scarcity.

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PostPosted: Tue Apr 23, 2013 3:39 pm 
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Thanks EricJ for posting that WSJ article. I remembered reading something on the cost of e-books a while ago, but couldn't remember where and was too lazy to google search at the time.

That said - 50% off is entirely fair. Unless GW is losing money printing physical army books, which I highly doubt, there is no reason for the prices to the same for physical and e-books - other than profit. GW already owns the IP, there aren't any royalties they need to pay, so the greatest cost for the e-book is the one time conversion, if it happens at all, to digital format and the costs of the website. All of which should be nowhere near the cost of physical printing and shipping a book.

Also, if GE fairly priced the e-book, they wouldn't have the potential of two people buying a physical copy and a digital copy and sharing the two. But guess what? I bet two people sharing an army book already happens! Cheap people will always be cheap people and pirates will always be pirates. They're the extreme low end of the bell curve. Look at digital music - it's actually turned around to make record companies more money now and there is less piracy, sure there are still pirates like pirate bay and mega upload type sites, but now that the music is properly costed, where you can buy that one song you like on the album for $.99 instead $15.00 for the whole album, piracy dropped. When things are properly costed, people won't take the extra time to search and find the pirated versions of things because they buy it instead.

Whew... Longer thought than I figured. Anyways.. good discussion though. Economics is kind of a dirty hobby for me - although behavioral economics is where most of my interest in it lies, since I am pretty horrible at higher levels maths (damn you Calculus!).

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PostPosted: Tue Apr 23, 2013 4:35 pm 
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I must agree with the thought that their business is selling little plastic men.. Let us have the rules for free, electronically, like Blood Bowl. Because of my limited budget, it will be this fall before I can own any new plastic.. My first $100 spent on the new release is strictly a paper purchase (rules, heraldry book and magic cards)!


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PostPosted: Tue Apr 23, 2013 5:03 pm 
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So aerofool, you admit you're going to spend $100 on paper products and then in autumn spend more on models. That is exactly why they won't give the paper away for free. You're buying it anyway!

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PostPosted: Tue Apr 23, 2013 5:26 pm 
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Paraicj wrote:
So aerofool, you admit you're going to spend $100 on paper products and then in autumn spend more on models. That is exactly why they won't give the paper away for free. You're buying it anyway!

True, but I'd spend the 100 now on models and then MORE on the models in the autumn. They'd get the same money AND customer goodwill. Also, if the paper for different armies would be free (or very low cost) I would probably have multiple smaller armies, some of which might grow into bigger ones

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PostPosted: Wed Apr 24, 2013 3:30 am 
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Luna Guardian wrote:
Paraicj wrote:
So aerofool, you admit you're going to spend $100 on paper products and then in autumn spend more on models. That is exactly why they won't give the paper away for free. You're buying it anyway!

True, but I'd spend the 100 now on models and then MORE on the models in the autumn. They'd get the same money AND customer goodwill. Also, if the paper for different armies would be free (or very low cost) I would probably have multiple smaller armies, some of which might grow into bigger ones


I'd probably be similar, my major stumbling block is getting the urge to get the Army book for things. I scan my own books because I like to look at things on the computer and make cheat sheets for myself.

Would I probably have had a Dark Elf army by now? Probably, but I'm strictly a 1 army guy because I a) love High Elves and b) The fluff to get me keen on other armies is in their armybooks that I don't want to fork that sort of money out for.

What is probably the smartest method is figuring out a low end sales target for a book, working out how much that would cost to break even on the non-physical production costs. EG. layouts, rules writing and testing, new art works etc, paying all the people involved for THAT labour and probably about 5-10% profit on that.

Then sell, to even get an average sales on the book, their profit margin increases. With the difference between hard and soft copies being in the physical production costs of the book and shipping.

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PostPosted: Wed Apr 24, 2013 5:43 am 
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Teledor wrote:
Thanks EricJ for posting that WSJ article. I remembered reading something on the cost of e-books a while ago, but couldn't remember where and was too lazy to google search at the time.

That said - 50% off is entirely fair. Unless GW is losing money printing physical army books, which I highly doubt, there is no reason for the prices to the same for physical and e-books - other than profit. GW already owns the IP, there aren't any royalties they need to pay, so the greatest cost for the e-book is the one time conversion, if it happens at all, to digital format and the costs of the website. All of which should be nowhere near the cost of physical printing and shipping a book.

Also, if GE fairly priced the e-book, they wouldn't have the potential of two people buying a physical copy and a digital copy and sharing the two. But guess what? I bet two people sharing an army book already happens! Cheap people will always be cheap people and pirates will always be pirates. They're the extreme low end of the bell curve. Look at digital music - it's actually turned around to make record companies more money now and there is less piracy, sure there are still pirates like pirate bay and mega upload type sites, but now that the music is properly costed, where you can buy that one song you like on the album for $.99 instead $15.00 for the whole album, piracy dropped. When things are properly costed, people won't take the extra time to search and find the pirated versions of things because they buy it instead.

Whew... Longer thought than I figured. Anyways.. good discussion though. Economics is kind of a dirty hobby for me - although behavioral economics is where most of my interest in it lies, since I am pretty horrible at higher levels maths (damn you Calculus!).
I've always thought the piracy issue was a beat-up. Price stuff fairly, don't put obstructive DRM on your products that make people go for the cracked versions because they're functionally superior, and people will buy your products because a) most people do actually understand that the best way to get more of what you like is to support the company that makes it and b) because it's not worth the risk and hassle to pirate when things are priced fairly.

When it comes to paper books versus e-books - a friend of mine makes a living off e-books priced at $4.99, with a print edition (by far the minority of his sales) is $11.99.


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PostPosted: Wed Apr 24, 2013 8:06 am 
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EricJ wrote:
This article quotes the WSJ (behind a paywall, unfortunately) as saying a typical printed book costs about $26.00, netting the producer around $5.85 profit. Meanwhile, the same ebook that sells for $12.99 nets the author a $5.92 profit.

That is a very selective (and incomplete) quote from the article you linked to though. First of, you left out the part where it said that the $12.99 price used in this comparison is $3 higher then the average amazon (probably the biggest ebook seller around) sales price for ebooks. If you add this into those numbers, the ebook suddenly only makes $2.90 in profit compared to the $5.85 of the printed book. Much bigger difference then the 10ct you mentioned.

Reading on, you see that the biggest reason for the price difference is the costs the brick and mortar bookshop charges (which is $13 in your article). Since GW sells most of their books in their own stores, it's a pretty irrelevant cost factor, since GW still makes that money. And then it's just a matter of allocating cost inside the company.

The actually relevant cost part, the printing, shipping and storage cost for a book compared to the cost for an ebook are $3.25 vs $0.90. So making an actual book is a whole $2.35 more expensive then making the ebook. Or about 10% of the $26 book in the example.

Translating this to the GW situation of an army book that costs $50, just taking out the printing cost means that it can be 5% cheaper. The stores probably want to make some profit on it. But even if you give them $10 per book, you only get at 25% that the ebook can be cheaper. And that is already directly eating into GW profits (assuming a customer only buys either the ebook or the normal one).

Prince Asarion wrote:
What is probably the smartest method is figuring out a low end sales target for a book, working out how much that would cost to break even on the non-physical production costs. EG. layouts, rules writing and testing, new art works etc, paying all the people involved for THAT labour and probably about 5-10% profit on that.

Then sell, to even get an average sales on the book, their profit margin increases. With the difference between hard and soft copies being in the physical production costs of the book and shipping.

I think GW already does that. They net a profit margin of about 15% (pre tax) which is hardly excessive. Then there are 2 different pricing pollicies they can apply: low price, high volume or high price, low volume. If you have enough sales data, you can calculate (theorethically) the ideal pricepoint at which you make the most money. After all, if something becomes more expensive fewer people will buy it but your profit per item will be higher. It then becomes a matter of do the higher prices compensate the fewer people or not.

That said, if you already have a physical copy of the book and you can buy a digital one for cheap then they stand a good chance of netting some extra business of people buying 2 books. I would. But for standard book sales anything more then a $5 discount will start eating into the profit and pricing margin GW has set for their books.

Rod

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PostPosted: Wed Apr 24, 2013 10:23 am 
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PostPosted: Wed Apr 24, 2013 2:43 pm 
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Rubbish! You are way to polished to be a proper pirate.

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PostPosted: Wed Apr 24, 2013 2:54 pm 
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Rod - where did you get the 15% net profit number for GW army books? Just curious.

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PostPosted: Wed Apr 24, 2013 5:14 pm 
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Ramesesis wrote:
Rubbish! You are way to polished to be a proper pirate.

Hey now, there's a precedent set. Remember Long John Silver?

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PostPosted: Thu Apr 25, 2013 8:01 am 
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Teledor wrote:
Rod - where did you get the 15% net profit number for GW army books? Just curious.

Hmm, was unclear there I think. I meant that GW as a whole has a profit margin of about 15%, which I got from their last financial statement.

You achieve this by either having everything you do return 15% profit. Or accept that some things lose you money but allow you to make more money in other places / expand your business. Either way, the pricing is probably aimed to make sure they get that 15% profit margin. Books could be something that doesn't make you as much, but make more money elsewhere by tempting people to pick up other models / armies. But judging by the pricing that is not the case.

I get the feeling the books are priced this way to give them some room to support their shops, make them some money there. But that is just a hunch. And not the way I would go about it, but that is just me.

Rod

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PostPosted: Thu Apr 25, 2013 10:58 am 
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Ahhh yes, I was meaning a profit on the books alone.

The problem with it all is, is that high quality injection molds are EXPENSIVE. GW does beautiful miniatures (most of the time) that are extremely consistent in their delivery in plastics and those cost a LOT, which is where the money goes.

But I do know that Australia charges something stupid, which while I'm quite happy to deal with the cost, since I know the pricing behind things and $/hr value, a lot of people looking to start the game just pass on by. That said, ebooks shouldn't be so highly priced, sell cheaply to many, on as many different file formats as possible.

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PostPosted: Sat Aug 03, 2013 9:21 pm 
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It's sort of a fubar argument as GW are the only producers and therefore can set their price.

The only fear is that if it's too expensive it will drive people away - except that they don't need to worry about that because they know the physical copy is set at a "safe price"

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PostPosted: Wed Aug 07, 2013 3:32 pm 
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On a related point, does anyone know how ebooks are made? Is it through the same tools / SDK as an app, for example, or something else? I'm looking to release my own ruleset in the future and I was thinking of baking the rules into an app as I'm a competent app developer. However, perhaps its done differently?

Similarly, would you guys as wargamers be interested in a game system that had the rules as well as army list creation tools (think army builder functionality) in a tablet / phone app?


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PostPosted: Wed Aug 07, 2013 5:02 pm 
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You need a word processor and an option to save file as .pdf

eBook done. I should know, my brother owns an eBook publishing company.


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PostPosted: Thu Aug 08, 2013 7:15 am 
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Dalamar wrote:
You need a word processor and an option to save file as .pdf

eBook done. I should know, my brother owns an eBook publishing company.

This is pretty much what I would do as well. Though I might opt for a different format then pdf. pdf tend to be a bit harder to read on 'odd' screensizes. But there are tools for that as well which also follow the same idea. Save the file as an ebook format, done...

Of course, even with printed books, I think most of the cost is actually in writing, editing and marketing the book, not printing it...

Rod

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PostPosted: Thu Aug 08, 2013 12:35 pm 
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I see ... so to upload an ebook to the iOS app store, you just have to send them a pdf? There isn't a particular set of development tools you need to use as there is for an iOS app?


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PostPosted: Thu Aug 08, 2013 3:35 pm 
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Apple might require you to use some weird format that only works on iOS. They like being incompatible like that.
Of course .pdf is the easiest format but it pretty much allows for anything text related. If you want to include an army building software you will need to build an entire app.


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Okay ... that was what I was planning to do. I've built the basic structure of the app already ... I just need to finish writing the rules.


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