Larian’s Swen Vincke Talks Self-Publishing and Video Game Pricing

In two new entries to his personal blog, Larian Studios’ Swen Vincke discusses self-publishing and why marketing people don’t “get” RPGs while also presenting us with a breakdown of where our money goes when we purchase a video game. Since both are interesting reads, I’ll quote a bit from each:

Looking at Larian I always thought we were ok on the checkboxes my team is solid, we’re in the business for 15 years with several games having a metacritic above 80% and we’re self-sufficient. Our games also have the habbit of selling for a long time.The only thing that could stop us from making it to the walhalla of the green-light committee  therefore would be that committee members just don’t like our games (or me/my studio).

We actually did make it to several green-light committees of top 10 publishers, I even sat in on a few of them to present my games,  but we never managed to sign with any of them, so obviously something went wrong. Other than occasionally having to deal with idiots, the biggest common hurdle I found has always been the marketing department. I’ve learnt that in general these people don’t like RPGs. They just don’t get it.

In general marketeers want a simple USP (unique selling proposition) that differentiates your game from the competition. That’s not rocket science, but it’s  obviously something that’s very hard to define in a game where it’s all about the whole being larger than the sum of the individual features. That a lot of these individual smaller features are different doesn’t matter to them, they want something big, preferably something not done before. They also want stunning visuals & animation, which is again very hard, if only for the freedom and wealth of options you need to offer players in a RPG. One of the consequences of that is that is that you can’t use a whole bunch of the tricks available to FPS developers, and obviously the RPG suffers in visual comparison.

…

On a 39,95 game in Germany, this is a typical breakdown found in royalty reports (numbers rounded)

‘¢ The state (VAT 19%): -7,5€
‘¢ Retail: -10€
‘¢ Inflated publisher costs: -5€ (Logistics, sales and payment conditions)
‘¢ Cost of goods: -1,5€
‘¢ Net revenue: 15,95€

So if you sell 100K units in Germany, your net revenue in theory is about 1,6M€. For the record, most games do not sell 100K units in Germany.

On a 39,95 game on a digital platform, assuming a typical 30% fee for the platform, in Germany:

‘¢ The state (VAT 19%): -7,5€
‘¢ The platform (30%): -9,7€
‘¢ Net revenue: 22,75€

So if you sell 100K units in Germany digitally, your net revenue in theory is about 2,2M€.

It’s pretty interesting to note just how much more lucrative digital sales are.