Estimating D&D’s Revenue

D&D, WotC, and Hasbro typically don’t share revenue numbers. The BookScan data gives us a potential window into estimating D&D’s overall revenue, especially when combined with previous clues. If we can estimate the percentage BookScan might be of D&D’s overall revenue, we can get a rough estimate of individual revenue from different core books, adventures, sourcebooks, and even licensed products.

Warning. This is only going to be a very rough estimate! And, this is the last blog article in this series examining the BookScan data. My thanks to folks who support me and make this work possible.

As we stated previously, BookScan tracks the sales of all books sold in the US to big box stores. It excludes direct sales, digital sales, gaming stores, and comic book stores. It includes Amazon, though Amazon in some years (especially during the pandemic) provided either no data or partial data out of worries that it disclosed too much about Amazon sales.

How RPG Book Retail Works

A company creates a product. They generally sell it at a discount to a distributor. The distributor finds retail shops in their network and sells it to them at a discount. The retailer then sells it at list/retail price.

Gaming companies, especially large ones, can negotiate different prices along these steps. In general, the rule of thumb for both RPG books and board games is a doubling of price at each stage.

If it costs you $5 to make a game, then you sell it for $10 to the distributor and the store buys it for $20 and the retailer sells it to the customer for $40. Put another way, on a product’s retail price, the store keeps half, the distributor keeps a quarter, and that leaves a quarter (25%) for the creator, from which they must pay costs to create and manufacture. An RPG company designs the final retail price with these steps in mind. Or, at least, they used to. These days, Kickstarter and direct sales can change this. Many 5E third-party RPG products don’t even go to retail the way they did during 3E. This allows for higher profit, at the expense of not being in the retail spaces.

If the above model were true for D&D, a product like the $59.95 Bigby’s might look as follows:

• $60 retail price, which is what your FLGS charges you.
• $30 is what the retail store paid to the distributor.
• $15 is what the distributor paid to the gaming company.
• $15 is what the gaming company gets for all of its work. This must cover salaries, printing, art, editing, marketing, etc.

In the book trade, some publishers can get better deals. Of the full list price, 40% of list might go to the retailer, 15% to the distributor, and 45% to the publisher. It can vary. It might be 35-45%.

The Peculiarities of D&D and Amazon

For D&D, retail sales are critical. You don’t see them using Kickstarter, because they are looking for hundreds of thousands of sales. They sell at Target, on Amazon, at book stores, at gaming stores, and many other places where they can reach more people and have greater brand presence. They move tremendous volume, as we have seen. This means they can negotiate better prices. That’s also why we heard news recently about WotC ending some D&D distribution through Penguin Random House and instead distributing directly through Hasbro, in essence paying itself.

One more point worth understanding. When you see books on sale, this is generally the retailer offering the sale. They may do this to free up inventory or to spur sales of associated products. As one of my friends in the book business shared on my Patreon Discord, Amazon is getting great deals and can offer deeper cuts. Amazon routinely takes a loss on some titles, using them as loss leaders the same way RPG companies take a loss on their Starter Sets. Offer one book at a loss, but encourage several other sales at profit.

If we take the above example of the $60 book the gaming store buys at $30, if the store discounts that book, they cut into their $30 profit they use to run the store, pay staff, marketing, etc. Amazon will often sell very close to or even below $30 because they have negotiated a special price the FLGS can’t get or Amazon might take a loss to sell other products. This is one reason your FLGS fights an uphill battle against Amazon and needs your business to survive.

Wizards is now moving to direct sales. When it sells a book digitally on D&D Beyond, it might charge $29.99 and only credit card fees come out of the price. No cut to a distributor and no cut to a retail store! We have no way of knowing how many sales are made on D&D Beyond. Since Dragonlance in December 2022, WotC has also bundled digital and physical products. For $69.95, Phandelver and Below is sold as a bundle in both physical format (regularly $59.95) and digital format (regularly $29.99 digital). This includes shipping. Again, Wizards doesn’t have to give a cut to a distributor or a retail store. We have no way of knowing how many sales like this have been made since December 2022.

What Percentage of D&D Sales is BookScan?

I mentioned that a UCLA study estimated that BookScan is 75% of retail sales. This is likely not true for tabletop, because gaming stores and direct sales and other vehicles are likely greater than for other book types.

What percentage might BookScan be for D&D? It is very hard to say, especially given how D&D has been selling directly through its website starting with the Dragonlance Shadow of the Dragon Queen book in December of 2022.

Fortunately, in an interview with Stan! about the Pokemon game on the official D&D podcast, Stan! said that there had been around 800k sales in 2017 for the PHB. I have separately heard that the number could be as high as 1M sales in 2017.

On the Roll for Combat video, the hosts showed the image below, which provides us a rough estimate of the BookScan PH sales in 2017, somewhere around 200-250k in sales. This suggests BookScan data may be roughly a quarter of all sales for D&D.

There is another source we can use. In 2019, Bloomberg wrote an article about professional DMs. In it, they share sales numbers for the D&D Starter Set. They call these “North America Unit Sales” and provide both a chart and numbers. The table is per year, so we have to add each previous year to find the total to match the BookScan graph. The closest number I could find on the Roll for Combat YouTube video is on Jan 12, 2015, when the Starter had 44,665. Extrapolating from the weekly sales around that time, the end of 2014 has roughly 42,915 sales for the Starter Set. This is 34% of the amount shared on Forbes. If the Forbes data included international sales, it might be a slightly smaller percentage. We could take 34% as an upper bound. In fact, when I try to extrapolate other values, the average I get is actually around 34%.

So, from both the PH reported sales and the Starter Sets on Forbes, we might estimate BookScan is between 23-34% of actual sales. This is, of course, a fallible estimate in the absence of more data.

Calculating D&D Book Revenue

We can take this 23-44% that is the percentage of sales BookScan represents and we can estimate the total revenue for D&D products.

If we take all the BookScan products that are not licensed, meaning all books directly made by WotC, and we multiply the sales by the retail prices and add it all up… we get a BookScan total of $427M in sales since 5E was released. That’s the total possible retail value from those sales.

Let’s assume that WotC is able to negotiate a 40% cut of the retail prices from distributors (instead of the 25% standard, and closer to the 35-45% traditional book publishers may receive). WotC gets to keep 40%, so that’s $171M from BookScan sales.

We can then look at the licensed sales. These are products such as the Heroes’ Feast cookbook, the Art & Arcana visual history book, and the Young Adventurer’s Guide series. Those licensed books total almost $25.5M since 5E launched. It is hard to know what WotC receives as a cut. Friends in the publishing industry think 10% is a possible cut. So, that translates to $2.55M from BookScan licensed sales.

The total cut for WotC from BookScan is then $173M.

If we assume that BookScan is a quarter of all book sales, then 5E has made $693M from all book sources.

If we assume that BookScan is 34% of all book sales, then 5E has made $510M from all book sources.

We can also look at yearly numbers. Running this same math for the sales D&D has had on BookScan the first 6 months of this year, we get between $38M and $28M. Doubled, that would be $56-76M for the year.

Here are the above numbers in spreadsheet form:

Is this plausible? Forbes in 2022 estimated that D&D was responsible for between $100M and $150M in annual revenue, out of the $1.3B total WotC revenue. Is it plausible that books make up around $56-76M of that amount, with the rest made up from non-book products, D&D Beyond, and licenses (WizKids, video games, t-shirts, etc.)? It’s really hard to say. Forbes could be wrong. Or I could be off on my estimates. Or maybe D&D really is making a lot of money on non-print-book sources. As you can tell, there are many variables involved, so estimating the total revenue is not easy.

Comparing my estimates to the Forbes estimate suggests that D&D book sales may be bigger. So, we can take our estimates as a rough estimate which may be low.

We can take any of the data shared in the YouTube video and estimate the revenue. For example, the Player’s Handbook has 1.56M sales on BookScan. With a price of $49.95, it has $78M in BookScan sales. WotC might earn $31M (40%) of that total. And if we assume BookScan is a quarter of all sales, then we divide that number by .25 to find the total revenue for the PH could be $125M. A truly impressive number, especially if we may be low in our estimates.

Edit: It occurs to me that some references may give these numbers context. The above estimate that D&D’s revenue for all of 5E is $510-693M or $28-38M annually… compare that to the following. TSR was sold to WotC in 1997 for about $25M. 2 years later, all of WotC was sold to Hasbro for around $496M. WotC purchased D&D Beyond in April 2022 for $146.3M.

Conclusions

Estimating D&D’s revenue is hard. As sales shift to some amount of direct sales and an increasing amount of digital sales, it will become increasingly difficult to estimate sales. I wanted to at least attempt it now, when we have this source of data and before it gets even harder to approximate.

Even with the uncertainty, all of the BookScan data and estimates show D&D operating at levels never seen in the history of RPGs. And yet, for all of 5E’s growth, it is a good question whether WotC is content enough with these numbers to celebrate D&D’s success and allow it to continue to be the kind of RPG it always has been. For all of D&D’s success, the RPG continues much to be like other RPGs.

There have been several moments in D&D’s history when the basic concept of how D&D is published and sold came very close to a major change. And more than a few times when the company was sold or nearly sold. If D&D’s book sales are slowing, this could cause Wizards to look elsewhere for fabulous growth. Often, D&D has done best when it had the lowest corporate expectations. Conversely, D&D has often suffered when it was the focus of corporate goals. For all of this success, the future of 5E and D&D itself remains uncertain.