It's been a couple of days since Steve over at TLG made a public announcement with regards to what will be happening soon with the company and one thing discussed was pricing. The post he made on the forums can be viewed HERE.
There was quite a bit of news for some fans to be excited about and while some may have mixed feeling whether or not the news about the CKG can be believed, others may have noticed the notion of the $5 module. This isn't the first time that a shorter or less expensive module was released into retail distribution. In fact, I believe the release of "Lure of Delusion" and "Dwarven Glory" modules was in effort to 'test' retailer perception and acceptance. You see, at a the price of $5, a retail store doesn't make much money on the sale at all. The reasoning is that a lower price point might generate a bump in sales and any 'loss per unit' might be made up by a greater number of units sold. It could also possibly increases the sales of material sold at the time of the purchase of the core books. These core books are also probably under priced when looking at other similar gaming products on the market.
There are a few issues with the strategy though. First off, by offering these books at a cheaper price, you may end up devaluing the line. Some customers who sees the average price of gaming books may view this as a bargain version of something 'better'. Cheaper doesn't always mean an increase in sales. However, assuming that sales are maintained and none are lost, what you end up with a much narrow profit margin. This means less money to develop larger projects which may not be a negative thing if they are altering their business model along with their marketing plans. It does mean that the company is restricting its own growth potential and could essentially starve itself out of business if the small releases are not regular enough.
One issue that I immediately found with this plan is how it effectively can screw with the possibility of third-party support for the game. Admittedly, there isn't much third party support currently but by selling certain products at cut-rate prices, a third-party company may be less inclined to even consider providing support for the game. If a third-party company can't afford to price an a product to be close to other items in the same line by TLG, the sales could suffer causing the product to be a loss.
All that said, some of the motivations behind this decision might be because of the new 'Old School' type of games hitting the market in retail distribution. Castles & Crusades had an advantage of being one of the only commercial options that was widely available. However, with WOTC re-considering its own strategy, Goodman Games doing its own thing, and interest generated by Dragon Age and the new Hackmaster, it may be trying to 'dig in' a bit better. This is probably the reason why the CKG is being pushed out as soon as it can.
If this book is released as suggested along with the other "Monsters of Aihrde" book, it could really help TLG out of a bad position if combined with the slashed pricing.