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Jan 13, 2011 -- 9:07AM, kenjoon wrote:

There are three scenarios for any given customer when it comes to D&D content and specifically Character Builder.

1) Buy the books and DDI sub
2) Books only
3) DDI only
[optional] 4) DDI only, but not a continuous sub

Correct - but to assume that someone doing (4) will (or even has the option to) move to (1), (2) or even (3) when you make (4) unavailable is foolish and delusionary.

Jan 13, 2011 -- 9:07AM, kenjoon wrote:

Because DDI is just another delivery method for their IP the cost of DDI isn't just bandwidth, development, and servers.  You also have to include IP development costs.  Their old model was basically buy the books ($30-$40 a pop) or buy them all for $10.  So for $10 you are paying for the development of every player (and monster) book ever released for 4e (2 years worth of products).

Of course you have fixed costs of development to cover - but these are not marginal costs or even variable costs - they are fixed costs.  The way you cover these is by maximising your operating profit - which is your sales revenue minus your marginal costs.  You can increase this by increasing sales revenue provided that you don't increase your marginal costs more than you do revenue.  Fixed costs play no part at this stage, because they are fixed, and aren't going up at all.

What you argue may be valid if:

1) The net margin (= sales price minus marginal cost) on the books is more than the $10 every X months from the occasional subscriber (likely, in my estimation), and

2) The occasional subscribers will mostly switch from occasional subscription to full-time subscription or buying the books instead of occasional subscription (i.e. assuming they weren't buying the books as well, before).  This seems to me to be highly unlikely.

Jan 13, 2011 -- 9:07AM, kenjoon wrote:

It was a steal and they were losing their shirts (your assertion about a $1 marginal cost is laughable).

Marginal cost = additional cost to produce one more (copy) of the product.  Producing and delivering a download of a file you have on a server costs way under a dollar.  There is no other marginal cost in this case.

Jan 13, 2011 -- 9:07AM, kenjoon wrote:

Their new "smarter" model is you can now buy for $30-$40 a book the same as before or you can RENT everything for $10.  This model at least has incentives for going either way whereas before if you actually bought the books you were being foolish (from a cost perspective).

I bought the books and subscribed - and I reckon that I got good value from both.  If WotC had offered PDFs at a reasonable price (i.e. related to the marginal cost of the PDFs) I would have bought those, too.  Each of those products gives me something different.  If I was still a poor and snivelling youth who couldn't see the value of my own time and enjoyment compared to that of money, I might think differently.  But, for WotC, getting any money at all out of those poor and snivelling youths has to be seen as a win, compared to them just using torrented versions.

Jan 13, 2011 -- 9:07AM, kenjoon wrote:

I'm not saying there was no profit, but I'm sure not agreeing with the other extreme where all but $1 was profit.  It's just not as simple as people are trying to make it out to be.

Actually, it is.  All but <$1 was (and is) operating profit.  Sure, you still need to make enough of that to cover your fixed costs (development, marketing, customer service, etc.), but all that doesn't change that the marginal costs are near zero.

Feb 7, 2011 -- 3:00PM, cjdphlx wrote:

I'm just pissed that I can't load charcter builder on my Linux OS.  They need to put out a work around for this major issue, I can't even download and install the old version.

LINUX:  The OS where you get what you pay for.  Nothing.
{/snark}

Developing in Linux is like a car in your yard on blocks.  It just isn't going anywhere fast.  Just one programmers opinion.

FYI....the old version never worked on Linux.  It's a .NET framework project and Mono(?) just doesn't support it yet.