Dream Pod 9 Publisher's Notes

Cancelling Products, or the Importance of Pre-Orders

(This is the second in a series of short "publisher's notes" that will hopefully help you gain an insight on the nature of the gaming industry. This installment reflects a sad reality of publishing: sometimes, somethings are just not meant to be.)

Games and miniatures are the end result of a long and involved process that requires the combined efforts of a whole team of talented people. In addition to the basic material needs of the production process (paper, office supplies, computers, printing, shipping, etc.), the team must be paid so that they can make an adequate living while crafting the games and miniatures. These all add up to a total production cost that is divided by the number of units sold. The more sales, the smaller that amount per unit (and the lower the store price, or the higher the profit, or both). As mentioned in the previous article, products are announced in advance so that stores can send in their orders. Based on these pre-orders, we can decide on a production run and set a price for the new product.

Sometimes, though, the demand for a given product is small. This can be for any number of reasons, not all of them related to the release itself. For example, ordering information may not have been transfered correctly down the chain; the store's buyer might have forgotten to pre-order; local fans might not have expressed their wants; or the new product interests only a limited number of people (regardless of the popularity of the line as a whole). When the production costs are divided across the number of units on order (pre-orders plus a safety margin based on previous long term sales of similar products), the resulting cost per unit might exceed the planned retail price, often by a significant margin.

In that case, there are two possibilities: a) raise the price of each unit to cover production costs (often impractical), or b) cancel the release altogether. Option 'a' makes sense in a broader economic theory sense, but most gamers have a set idea about the cost of game-related products and will not willingly pay more. This leaves option 'b' as the most common one.

Though disappointing, cancellations are actually a sign of good management. The company will not lose money, and it's a clear signal to go back to the drawing board (whether on design, production methods or just getting the word out -- marketing). And cancelled products may still be made one day -- if there's enough interest in them...