Dear Deadly: Are Major Licenses Worth It?

Dear Deadly,

Licenses seem to be a mixed blessing in the industry. Clearly a popular license can increase sales, but the difficulty in getting stuff reviewed and the delays that can introduce seem to be a huge burden, above and beyond the cost of the license.

I know that you had an “in” with the Dresden Files, but what advice can you give for determining if a license is worth the effort and cost? How do you manage the licensor to keep things on track?

Thanks,
Steve

Steve asks good questions here (the subject line is the killer one, though). This is something I’m hoping Chris Hanrahan will be able to cover with me in a future That’s How We Roll, but I can share a few thoughts here as well.

Ultimately, a license is all about managing expectations — both yours the licensor’s. Every license is its own kind of special snowflake, really; it’s hard to really dig into generalized truths because of the differences in morphology here. But all the same, here’s a noncomprehensive list of things you should be thinking about and discussions you should be having with the licensor.

Does the license come with free or low cost assets you can repurpose to or debut in your product?

At its most basic, a license brings you extra audience you wouldn’t otherwise have. Licenses that are really worth it either bring an incredibly large audience to you that you aren’t otherwise reaching, or bring extras along for the ride that help you keep your budget from spiraling out of control.

In the case of the Dresden Files RPG, we got two major boosts. One, we got low-cost access to much of the art done for the Dresden Files comic book that was at the time being published by the Dabel Brothers. The Dabels did not always manage their business well (and so the comic has since moved over to Dynamite Entertainment), but they were very kind to us by giving us broad access to the amazing art done for the comic by Ardian Syaf.  Two, Jim Butcher was willing to write a short story specifically for the RPG. It’ll show up in a collection of short stories elsewhere eventually, I’m sure, but having a period of time where we had exclusive first-source content of our own for the RPG certainly hasn’t hurt.

Do you and/or the licensor think that the game will sell in numbers that are far outside of how non-licensed RPGs tend to sell?

There’s always a decent chance that the value of a well-known license will boost sales of the RPG — but there’s absolutely no guarantee it will. It’s best to set expectations for all involved parties that the game will sell no better than an unlicensed RPG, and to make sure the financials make sense with that being the case (more on that in a bit). You can’t get yourself caught up in an agreement that more or less demands or expects you to sell thousands upon thousands of copies.

The costs of the license — often expressed in terms of down payment up front to the licensor and percentage of royalty paid to the licensor on a per sale basis — can’t take your unit cost to the point where you aren’t making money on a sale into your lowest margin sales channel (usually distribution). Run the damn numbers in a genuinely worst-case scenario, and make sure they still add up to you at least breaking even, or in the event of disaster, losing only what you can afford to lose.

Do you think the name alone is justification for a higher price point?

And while we’re on that topic, don’t think that you can simply make up for license costs by slapping a higher cover price on the game. Push your cover price high enough and you’ll lose the extra audience you’re supposedly gaining by acquiring the license. You shouldn’t be boosting the price of your product on the name alone; it’s gotta bring the cracklingly good content along to justify that. The two DFRPG books together are a hefty price tag, but the playable single core book, Your Story, is not outside the range of unlicensed games with a similar form factor; on top of that, we jammed it full of love-for-the-license content. All of that is a deliberate choice made to make sure the game competes as a game in its own right, sans the influence of the license.  We wouldn’t have been able to put that price on the book if the license costs were high. Thankfully, they weren’t, for us, so it was all viable.

Can you reasonably assess how large of an audience you’re getting access to with the license?

… And how much of a percentage of them (think very small: maybe 3-5% on a novel series?) do you think you’ll be able to acquire from that license’s fandom that you aren’t already getting access to? Overlap is the key calculation here: of a property’s audience, how many of them are likely gamers or willing-to-become-gamers? Not a lot. So divide by 20 or 30 or 50 or 100 or more.

I recently looked at a potential license and was lucky to be able to get some honest numbers on what the readership/viewership was for that property. When I looked at the probable RPG sub-portion of that number, it ended up not making sense to pursue the license, because the audience boost we’d likely get from the license didn’t outweigh the costs of acquiring the license and developing the project. It doesn’t always have to come down to a cold calculation like that, and sometimes you can decide to forge ahead even if those numbers don’t say you should. But it’s good to know what they’re saying, because that’s the mountain you’re gonna climb.

How important is your project to the licensor?

You’re going to be asking for a lot of initially uncompensated, additional work out of the licensor throughout the process, in all likelihood. You’ll be asking them to read through mountains of text, scour your draft for things that don’t fit with their vision of the license, etc. It’s a big time investment for them (and they’re busy generating the primary content for the property in the first place) and will be very time consuming for you as you wait for their feedback. Yes, it’s important to work out this process and make sure inefficiencies are identified and medicated in advance, but that’s just time and project management stuff. Important, but it won’t matter one bit if your project isn’t important to the licensor. They have to want to see it succeed; that’s going to motivate them to donate that extra time and effort, help you find resources you need, and figure out when they need to be delegating the approval and Q&A work to someone who does have the time to respond to you. What you want here is a collaborator who’s excited about seeing the project happen and wants to help — or someone who’s happy to take your check and stay hands off with the design of the final product. There’s a big swampy zone in between those two where your project can and will get bogged down because of a lack of time and/or enthusiasm, and in that swamp your project will also start to acquire a stink of mediocrity. Avoid it.

How fast are you expecting all of this to happen?

Because it’s going to take a lot longer than you think, and that’s okay. But you need to learn how to believe that it’s okay.

Are you going after this license because it’s popular (in the minds of the gamer populace), or because it’s personally exciting to you?

If you didn’t answer “yes” to that, you might want to reconsider. The best licenses are probably the ones that are both. You’ll get the audience you want because it’s popular. You’ll make sure you’re doing the best possible job because it’s personally exciting to you — exciting enough that you’ll still like it after you’re done. Which is no mean feat.

Plenty more to be said about this, but I think those are good places to start your exploration.

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