Behind The Curtain: Finances Of Dungeon Roll
I know that many can be interested in where all of the money goes, and how we might be able to afford $15 including delivery and so forth. So, I will bring you behind the curtain.
This reveal was inspired by my podcast interview for Funding The Dream with Richard Bliss. That link heads to the podcast, it is a good 22 minutes.
But before we get into that, I would like to explain my motivations behind this project structure. And these motivations are based on one super solid fact... Namely, that I believe Dungeon Roll could be gigantic huge. As a matter of fact, it is likely that all revenues related to Dungeon Roll will be supporting Dungeon Roll until we have sold at least 30,000 copies!
- To create an exceptionally popular product.
- To get Dungeon Roll in the hands of and played by as many people as possible.
- To give Kickstarter backers as much content as possible.
Now, the extent to which this can be done depends on the finances, starting with:
Adjusted Revenue Per Backer
I was having lunch with a friend of mine, Patrick Nickell from Crash Games, who has published some cool games with crowdfunding through Kickstarter. Well, anyways, I showed him my calculations to determine what funding level I should set, and what funding levels I should target.
It was like something unlocked in his mind, he never considered a project this way.
And it all starts with the adjusted revenue per backer, where the adjustments are:
- Kickstarter Fees
- Amazon Processing Fees
- Delivery Fees (shipping from the warehouse to the backer) NOTE: I price non-USA shipping to be as close to the actual increase as possible including KS and Amazon fees, so this is really meant to be per backer or per copy.
- Damage and lost package adjustments
This adjustment represents how much money per copy I have to be able to spend on everything else, manufacturing, setup costs, ocean freight, additional inventory, and if I wanted to keep any money personally. Maybe I should set aside $40 to treat my wife to a nice dinner to celebrate?
So, the costs are:
- $1.50 for the Kickstarter and Amazon fees (with the low dollar amount the Amazon fee works out to about 5% as well)
- $6.25 to deliver the games based on fulfillment by Amazon prices
- $0.60 for royalties per copy
That means that I have an adjusted revenue per copy of $6.65. This is what is used to manufacture, ship, cover setup costs, dinner with my wife, and so forth.
Viewing As Aggregated Costs Or Cost Items
Now, to make my life and calculations easier, I view all of the other costs as individual line items. For example, I will look at the setup costs and how many backers I need to cover it.
Then the manufacturing, and how many I need at different funding levels, since with more units the marginal cost per unit goes down. But with these costs, as the unit cost goes down, I see this as a good place where I can then increase the cost by providing more stuff. So, if the cost per unit goes down by $0.02, then I can add another hero card for example.
The most interesting item is shipping. I estimate a cost of $4,000 for a 20' container and $6,000 for a 40' container. Up to 10,000 units would certainly fit in a 20' container.
Costs And Backers Required To Cover Them
So, with setup costs (art, dice molds, plates, etc) of $8,300, will be covered by 1,248 backers.
Ocean Freight at $4,000 will be covered by 601 backers.
So, I now know that I need to have 1,849 backers to be able to cover my setup costs and assumed ocean freight. Thankfully, the per unit manufacturing cost is pretty attractive, and will be determined by the final product, but at 10,000 units, lets assume that is $2.40 each.
So, manufacturing 10,000 units would cost $24,000 and would be covered by 3,750 backers. So, I would need to have approximately, 5,599 backers to be able to make 10,000 copies with no out-of-pocket costs.
That is $83,985 of funding so that I would be able to have about 4,400 copies to sell that is completely crowdfunded.
Are You Crazy?
But I believe in Dungeon Roll 100%. I would say, 150% I believe in it, but I know that math is wrong.
I also believe in the backers that we would attract for Dungeon Roll and that they would be happy to share with their friends and would strive to get us through these additional stretch rewards.
I also believe that being generous will be rewarded.
That Dungeon Roll could gain the support through Kickstarter that would be required to make the game so that all of this is true:
- It has TMG production quality standards. We have published well over a dozen games and consider this extremely important.
- Have a mass market type of price point which is typically obtained through very high print runs in the tens of thousands.
- Can be supported with additional content and expansions, like different types of dice, more heroes, epic items, more monsters, different types of dragons, campaign play, and so forth.
- MOST IMPORTANTLY: Has game play and replayability that TMG can be proud of, and we are.
I know that was a ton of information, but I hope it sheds some light on the thought process, the commitment, the goals, and how important each and every backer is to achieving those goals.
There is no way that I could ever reach and convince 5,000 backers myself. Maybe I could garner 1,500 backers early through extreme effort. But at some point, it really does require the promotional help of those involved.
With that said, if you can help promote the project, great thanks!