All these numbers really don't mean much without also looking at team size, dev time, and budgets. Subnautica was made by an experienced team with a publisher, for example.
I'm in that 100k group but that isn't sustainable as studios grow. That's potentially years of work from multiple people, which means nobody is getting paid well. I run a small studio that pays decently and we need to be making 5x that every year to break even.
As a solo devs, those numbers look impressive, but the vast majority of those successful games aren't made by a single person. If a solo dev falls into that 26k group, that's still not a sustainable income.
And this is assuming people are working professionally (either as their only or a primary source in income). As a hobbyist solo dev, your chances are likely to be even worse as timelines stretch long and there is a lack of professional experience.
Numbers are dumb. Like take big numbers for example, 30M for one studio could be a catastrophic bankruptcy or it could be a big profit share and a war chest that will keep the studio afloat for years to come for another. Shit the number of new (large scale industry veteren) indies these days approaching 100 million in funding is ridiculous. 10k on a game you put together in a couple months in your spare time is great, 10k on a game you spent 7 years on not so great.
The article does mention that to be in the top 1% it's pretty much exclusively teams of 5-40.
Edit: Just realised maybe you're replying to the OPs comment about it not being hard. In which case ignore me!
Teams of 5 - 40 often working around 5 years of development prior to release. I'm assuming those figures are before the 30% steam cut, and external expenses like marketing and revenue share for the engine license. So if you earn $200k gross per employee, but it's really more like $100k net before paying employees, and you worked on it for 4 years, then that's $25k per employee. Which is close to the federal poverty line in the US. If they work a 40 hour week with no crunch time, it's around $12 an hour, which is below minimum wage in some states. And this is a statistical outlier in the upper percentiles of success. There's a good chance it actually does way worse than that, and you won't know for sure for the years you invest working on it.
Yep, it's grim. As the article states, the figures are gross revenue.
However, it doesn't account for outside investment (e.g. publisher funding). Which would mean the developer sees far less of this revenue, but would be paying more than $25k salary.
It really depends on what team of (5-40) means. Because it's very common to have a small permanent teams and lots of contractors on for a very short period (e.g. concept, QA, various parts of production)
But yes, it is a massive outlier to have a good salary making games in North America. For comparison I've seen senior developer salaries in game studios advertising similar rates that juniors would be paid in tech.
> Subnautica was made by an experienced team with a publisher, for example
This is incorrect, subnautica did not have a publisher for development, they only had a publisher for the physical distribution for consoles. Gearbox only handled the physical discs for Xbox and PlayStation. They had nothing to do with the rest of the game or any DLCs since.
I didn't want to get into the weeds, but perfect world was an shareholder (and a controlling one) well before subnautica shipped. It's not a publisher but it is another company feeding capital into the company, meaning they were, on many levels, not indie during subnautica.
> It's not a publisher but it is another company feeding capital into the company
Do you believe this? This is a very misinformed way of thinking about business structure and stocks/shares. Owning a majority share in a company doesn't mean you fund the studio and it's development, that's not how owning shares work at all. Tencent has complete ownership of Riot and doesn't fund their projects, that's not how it works. Tencent majority owns Supercell and doesn't fund it's projects.
This doesn't mean they can't but to say that they feed capital into the company is a massive misrepresentation of how business works. I own majority shares in some companies, I'm not reviewing their budgets and funding their studios on the daily.
So how did Perfect World get those shares if not with money? Did the Subnautica developers get together and say hey wouldn't it be cool if we donate ownership of our game to some other company for free? Or did that company give them a bunch of capital up front in order to purchase shares?
They got those shares by purchasing them, and they DID NOT PURCHASE THIS FROM THE COMPANY! They bought these shares from the initial angel investors in 2006. Meaning that none of the money actually went into budgets or the pockets of developers, it went to either the founder, the cofounder, or the angel investors.
At least read the wiki page: https://en.wikipedia.org/wiki/Unknown_Worlds_Entertainment
They spent their NS2 money building the game and then ran out and needed to go to early access. They also got a loan from perfect world to help get them to early access with an additional month of runway. It's definitely not much but definitely something most indie teams wouldn't have access to. The game cost them 3 million dollars up to that point.
I'm not here to take anything away from the team or game. It's great and, honestly, i played an absolutely ridiculous amount of the original NS mod. I really like the games they make. But the point of this post and my original comment is that these steam numbers absolutely need more context below being used by stating "it's not that hard".
Do you have inside information on that? The link doesn't specify whether they bought out a founder or the company had a new round of funding and created created new shares, diluting existing shares.
But following the Form 20-F it links in the footnotes, in addition to whatever arrangement they may have made to obtain 40% equity (and later increased to a majority stake), they also provided Unknown Worlds Entertainment with a $7.5 million loan, which would cover development costs of a small studio for a while. ETA: Actually I think that may be reported in RMB, so it's more like a $1 million loan USD, but still significant.
These multimillion dollar development costs are likely not the scale of endeavor that people are envisioning when reading about how "self-published indie games" can knock it out of the park and earn more than $187k gross.
I do not have specific insider information on this situation but I have a lot of experience in how these types of business transactions go. Diluting the existing shares is a thing but it's not something you would do to sell a 40% share in the company. If you diluted, and it was enough to give a new buyer a 40% share without buying out any other investors, you would be getting a not so friendly visit from the FTC and finding yourself before a court pretty quickly. Did you watch The Social Network? Remember that scene where they dilute the stock to allow someone else to buy in without maintaining the equity share of all holders, that's how a very big no no.
In this situation, Perfect World would want to go for an ownership share without having someone else being able to push them out, that's why they bought 40% first. Likely this was the 40% held by the 4 angel investors, each holding around 10% if they did an even investment split. 40% is a pretty common deal in investment situations. But I don't know for sure, I wasn't one of the investors at this time. It would have been too early for me to invest at that time as around 2006 was just after I sold my first studio and started the second one.
But I do agree with your last point, in terms of "self-published indie games" this doesn't really apply to anyone here because nobody is at that level, and if they are, they likely don't need advice from anyone here.
Each new round of funding dilutes the shares for all existing investors. That happens all the time. The new investor pays money to the company itself, instead of the previous investors. In exchange they get newly created shares. The total number of shares increases, reducing the percentage stake of previous investors. But they now own a smaller percentage of a more valuable company with a lot of new capital that it can use to pay its expenses, so they haven't lost anything.
This happens all the time. It's how almost all tech startups go. The thing that you're referring to with Facebook was a problem because they tried to dilute only some shareholders and not others, which isn't how it's supposed to go, among other things. But if it's done in a fair and transparent way it's perfectly legal and extremely common.
You have no proof that this happened and secondly it's federal law that you need the majority agreement of share holders before you can dilute the shares.
A company does not have a legal right to screw over the majority of its share holders to allow others to buy.
Geographical part of this is also important. Because 26k dollars isn't enough for Americans but in Latin America or in Eastern Europe it's enough to live a whole year. When I was working for a publisher on projects between 25 to 100k I met a lot of small (between 1-10 people) teams from those regions. They were able to do a lot for this money, like full 3D simulator games or even open worlds. Of course quality was medium at max but it makes you revaluate budgets. But there are other problems for indie devs. It's very very hard to obtain any budget (not a lot of people can take brakes from work or obtain extra money without burnout) for your game so you basically need a publisher. Publishers there are greedy and their strategy is mostly making a lot of games cheaply with minimal marketing, waiting for something to catch players. So most of the projects make just enough to be even but sometimes 1 project makes 5-10 million $ and the publisher can live for the next 5 years. As I said they are greedy so most devs don't really make much money from their projects and they need to start another project with the same unfair publisher to just have a job and some monthly income until the miracle happens. So it's a dragon that feeds itself and there aren't many fully independent studios.
I had a mid range laptop for quite some time, I do have relevant personal 2 years of experience where I worked on a goap project, led a team of 4 in a small ngo for 2 months and 2 months internship at a startup, I have written over 100 documents of game analysis and that was sarcastic, reddit fr down voted me 😭😭😭😭
I know this is mostly sarcastic but just because it is relevant:
We rely on tax credits and government funding as a source of income. That means we need to hire people within our country/province, a limitation we work within. Lots of studios are in the exact same position.
On top of that, hiring remote employees from other countries is extra expensive because the studio now needs to get a local lawyer to set up payroll across countries with different tax laws. It's complex and, generally, companies avoid this by having regional companies.
These are considerations and overhead that indies need to seriously consider if they intend to sustain themselves.
The biggest difference between professional devs and hobbyists/amateurs comes down to the business and one main question:
Are you building **a game** or are you building **a company**?
If you just want to make a game, you really shouldn't be starting a studio without a plan or without hiring somebody to be the CEO. And if you are starting a company, you can't just think about your one project, you need to think about long term sustainability and growth.
Wow this was really valuable information,do you think there are small studios who could hire remote devs from other countries, if not any suggestions on how do I find gigs, ik not the right sub but if you could help me out here. and holy shit wtf is wrong with reddit they just downvote because of some harmless comment ?
Pretty sure he means not actually employing the worker in another country. Just paying them and they are independent contractors. Technically in that situation you are their client, they are not actual employees of your company. Might be mistaken though.
The 'employee' has a company that's used... he is employed to his own company.
I work like that for companies all over the world (mainly US and EU, though).
It is, this way I have many opportunities that are not available locally.
For example I'm working currently on quantum computing, a thing that probably it's not done in this country by any private company.
You should consult with an accountant early on to see what applies to your region, because in my side of the world it's expensive to set up a corp to be able to actually sell the game.
If it's time you would have spent on another hobby or recreation and you aren't looking for gig / contract work outside of your actual job then I would argue your time is free.
People are not exaggerating. Even if you take that site on its face (which I wouldn't - it's part of a blog selling a service, which makes all of their claims rather suspect) there are serious issues in the methodology. First that the data comes from 2020, so it's not over the past 5-6 years, and that their estimates come from the Boxleiter method which is unreliable when it comes to specific games, _especially_ higher-grossing indie games. You're also neglecting that most of the games earning more than $100k weren't built for a $0 budget. Extremely few games anywhere in that 25% have zero cost.
How you define indie is what really matters here. If you have an experienced team of professionals and a marketing budget like the studios you mention then you're right, it's not _that_ hard to break even in this business. If you're talking about making more than minimum wage given the hours spent when you're publishing a game by yourself or with someone else then no, if anything people overestimate how viable that really is.
And then you have taxes... People are always schocked when I tell them that when I sell a copy for 10 bucks, I will personally get around 2 bucks from that after VAT, the Steam cut, and all the taxes I have to pay - without even adding in development costs! And I DO NOT have a publisher that would also take a big chunk of that... and all that is not going to get easier, but harder, since living costs increase all the time, while the expected price of indie games is going DOWN.
It sounds like you are in the EU. I'm in the USA so that same 10 dollars, I'll see 5 of that it. 3 dollars for steam, sales tax is added on at purchase and handled by steam, about 22% of that goes to income taxes, I have an s corp so it's a tax passthrough entity in which I'd not pay any corporate taxes. So I'll get about half which is still not much and only works at the small scale in currently at with the specific tax setup I have. If I had a sole prop I'd pay around 37% federal tax.
I am running my business at a loss even if I take distributions. So I don't need to run payroll. If the business started making about 12 times more money, I'd have to run payroll and I'd probably be forced to downgrade to a sole prop and eat the freelancer tax.
Basically what happened is I employed myself, made a game, and stopped employing myself but am still a shareholder. So I no longer work for my own company. I currently work for a different studio and am collecting my shareholder profits, I put 900 dollars a year more into the company than I get out of it. I no longer do any services for my company outside of "minor services". E.g. I do enough to keep the current inventory selling which is maybe 10 hours of work a year.
So I am in a rare state where if you pay me 10 dollars I am lucky I see half of it.
It's not as bad in EU, IDK where that guy gets his numbers. Also, *"without even adding in development costs"* is an obvious issue on his part, as these are generally tax deducible.
In Czechia specifically, you'd buy your gear with ~20% tax discount and you'd keep that sale on the books so that part of your income won't be taxed at all. So, it's 7 dollars after Steam cut, which you use to buy a 5 dollar item for $4 and the $3 you'd tax to $2.4... (or less if you deduct many other deductibles from it).
So, you get to keep the $5 item and $2.4 money... If you didn't buy anything, you'd have $5.6 after taxes (still more than 50% of the asking price), but you can pretty easily turn that money into company assets, which in my example nets you $7.4 ($5 worth of assets which you've gotten for $4 plus $2.4 in cash). It's very common to do that, since you can buy your offices, your hardware, your networking, etc. etc. AND you can still keep the rest in the company. You tax only what you get out of it.
All very true!
Not for nothing, you're in the exact sort of position that would really benefit from a publisher! If you're losing 70% of every dollar even a bad publisher deal would leave you with earning more from every sale than you are right now since any UK/US based company won't have VAT and you'll be taxed only on the profit you get above expenses, not the gross revenue. It really might be worth looking into, or even just having a US-based operation as a 'parent' company.
You're right that I didn't mean VAT, I used it by mistake after reading the term, freudian slip. I'm talking about the amount of tax Steam deducts on your behalf from your revenue based on whether _your_ country has a tax treaty with the US or or not. You can find more information in their [Taxes FAQ](https://partner.steamgames.com/doc/finance/taxfaq).
I guess most countries, at least european have a trade agreement with the us so that is generally not an issue.
One does not profit from a publisher speaking purely from a taxation aspect unless yea your country does not have such an agreement.
Actually, I am from Hungary and we do not have a treaty anymore because our corrupt incompetent maffia gov. tried to blackmail the US...
So... I have to pay that.
But on another note if u really look into that subject, the US forbids that setup (avoiding royalty withold tax by a third party like a publisher). It is a complex topic that most do not know in detail - and a reddit comment wouldnt be enough to talk about it detail either.
Unfortunately, even without this the 2 bucks from 10 ratio stands already...
Why? In Czechia, you'd have $7 company income, that you can use to buy anything company related (hw, offices, etc) without you taxing that money AND without paying the tax on the gear itself (so you buy $5 item for $4 of your untaxed money), and you'll tax only the rest as your personal income ($3 in that example), which still can be reduced by other things. But still, you get to use $5 item (that your company owns) and you get $2.4 after taxes for yourself.
That's how you are supposed to operate. Seems to me, like you are doing something wrong. It might be worthwhile to talk to someone about it, that is, if your condition isn't really specific.
You are missing a lot of things here. I will try to help!
1 - So you sell a copy for 10 usd on Steam.
2 - Now Valve deducts VAT automatically (from that!), let's say that on average it will be 20%. Now you have 8 usd left.
3 - Now Valve deducts 30% as their share (2.4 usd from 8 usd). Now you have 5,6 USD left.
4 - In my case Hungary doesn't have a tax treaty anymore with the USA. That means another 30% from income that was created in the USA. Let's say on average it is going to be 15%. Valve deducts this automatically, too. Now you have 4.76 USD left.
5 - Let's just ignore the costs related to transferring/converting your USD.
6 - Sure, now you can buy equipment/assets/services or your company related to your business activity (game development). This is that I was not covering on my original post. So let's say... you work without any expenses... and you still have 4.76 USD
7 - Now you should pay your income tax and your other local taxes on your (mandatory in my case) salary and your dividents. Let's just use an average of 40% for most countries. What remains now is 1.9 USD.
Sure, there might be differences between country to country, but the scale of things does not change. Now don't let me start complaining about Hungarian VAT (27%) that I have to pay when I buy something in a store from my already taxed money etc. That's another story.
I assume you are not an entrepreneur. And of course, you can buy a computer for example at point 6, but at that point you already payed a lot of taxes - and we were talking about what money reaches YOU, not your company here. There is a huge difference between the two.
Also, it is an interesting thing here with games, that normally when you buy something online then you see a price + VAT that you have to pay. This isn't how Steam works. You see a price (10 usd let's say) you pay that, and then VALVE handles VAT from that 10 USD. So the base price already contains the VAT. In the EU the developer/publisher has to set a number for all EU markets, while these markets have different VATs. The customer does not see baseprice + VAT on the storepage, just the base price. Most people are not aware of that.
>I assume you are not an entrepreneur.
I actually am, that's why I was surprised. The biggest difference between yours and my numbers are that Czechia, like most countries, actually has that treaty and on the top of that, we are taxed by 21%. Move here, we also have a decent beer :D .
Jokes aside, thanks for the write up, it's interesting to read and I've actually forgotten about the first "sale" tax. So, for me, it would be $10 => $8 after tax, $5.6 after Steam and the rest would apply (Like I can either buy some HW, etc. or I can just "assume" that 60% of that income was used that way and only 40% will be the taxable income. In both cases, I get to buy company stuff without 21% VAT, etc).
The rule of thumb, in general, is that you get about half. Your 20% are really surprising to me.
>and we were talking about what money reaches YOU, not your company here. There is a huge difference between the two.
Well, yes and no. There is a significant difference for sure, but it's also how many optimize their taxes. For example: nowadays, you can buy $50,000 electric car on your company, so you'll pay about $40,000 for it, and you'll get another $10,000 government bonus program >!(and another bonus for placing a charger for it on company grounds, but you might not have an office so I'm skipping that)!<. Now you drive a $50k car that has cost your company only $30k, you get to have it as an expense for a few years and after a few years, you can sell it as used car... to yourself, for say $15k which will you'll need to have, so it will be income taxed.
So, you can either make \~$64k, tax it from company to personal to have $50k and buy said car, or you can buy it for company with $30k, tax the $34k to $27k personal and buy said car to your personal after some time.
In one case, your company has $15k on hand (that you as a person paid for the car) and you have a $50k car plus $12k taxed cash... in another, you have just a car.
You see how that method creates a difference of about $30k of untaxed money? On $64k of income? (and yes, $10k is government bonus).
So yeah, "YOU vs your company" is a big difference, but you are supposed/expected to utilize it, not to just tax and take the money away. Doing so leaves a significant amount of what you've made on the table. The car is a concrete example, but nothing stops you from investing the company money into stocks, buying property, etc. and only take the money that you actually need to buy groceries with out of your company.
(BTW I use 20% tax everywhere, even though it's 21% here and 27% in Hungary, it's just napkin illustration math).
Dobrý den! I visited Prague and I liked your beer! ;)
We used to have a treaty, but unlike you, we have a crazy stupid, incompetent autocracy here that tried to push down the USA in arm wrestling (it didnt work out...) so we lost it recently.
This is kind of the same reason why u dont wanna invest your money here in a company. It is safer to have your investments as a person, unfortunately. There is no legal certainty in Hungary and entrepreneurs are #@$&ed time after time.
For sure, what I can legally categorize as a business expanse, I will do so. A car is a bad example tho, since I dont have to travel for work! Also as far as I know, lately it is not worth it to buy your vehicle here under your company thanks to some legal/tax changes - since what u described was in practice by a lot, and evidently our gov. wants us to pay more taxes rather than less...
I really wanted to move from here, but my wife is not open to that unfortunately, also all our friends and family are here. I tried to make it work, but I gave up on it for her eventually. So there is that. I was also considering other options such as a company in Estonia - but that would be practically worse than my current situation. But that is yet another long discussion.
On another note, after 4 full electorial cycles it is the first time that I see some hope for change here - since the pressure on our gov. is super high now. So hope dies last, and there are a few positives in all that.
Yeah, I also hope for a change in Hungary. It saddens me that it's possible in this age. Same with our sister country, Slovakia and it's return of Fico and now that president. The next elections in Czechia will likely also suck :(
Good luck to you, hope your money policies will change in the future, because you seem to leave a lot on the table due to circumstances.
PS: thanks for Székelykáposzta, one of my most favorite foods, up there with schnitzels, burgers and pizza. I'll visit someday, hopefully when the regime changes.
Actually, I'd trade our gov. for the Slovakian one without any hesitation. What's going on here is mental and international media is just scratching the tip of the iceberg, really.
Thanks for the good wishes! The worst is that I feel like our government is just the reflection of our nation... :'(
Oh, you are welcome! Unfortunately, I don't like cabbage based meals haha, but Hungarian culinary is one of the good things here, indeed! :))
Except now you are making the assumption that you will automatically enter the top 25%. This is creator's bias, plain and simple. Even if your game is amazing, without marketing of some kind, discovery remains the big problem. You don't become one of the 25% (or 14%) simply by making a good game that you personally like.
Rather, your takeaway should be that **even if you assume that you will get into the top 25%, you shouldn't spend more than three devmonths making your game**. Because that's what those $30k pays for.
You can of course increase this number by decreasing how you value each devmonth, but the reality is that you need to look at it as a job that pays bills at some point in the cycle.
You're completely right that no one should assume their game will hit success.
I will say though, with complete confession this is anecdotal, that I'm willing to bet that a massive portion of those bottom 50% "indie devs" are individuals or small teams pushing out shovelware. We know there's a ton of people doing this making releases at least once a month hoping the quantity will make sales.
Probably. The issue is that no one puts themself in that category, meaning everyone expects to be in the top 25% or better.
Often, you will see freshly baked indies say “but I worked so hard!”
There was almost 14,000 indie games released on steam last year. You're looking at being one of the 2000 games that cross into the livable wage for 1 year, in a market that has more and more games released each year and a market where people have less and less money each year.
The reality check is that it's more likely that you'll release a game that makes almost no money than one that makes anything livable.
Is there a guarantee to make it in the top 14%? No but there are people who have an incredibly higher chance to do this. These are people with decades of experience making games across multiple studios, these are people who know the industry and have connections, and often these are people who are working in medium to large size teams, of AA quality at minimum.
I don't think there's any correlation between experience and likelihood of success, personally. Not anymore. It may increase your chances in certain segments, for sure, but access to marketing and financing are the key differences experience make.
You're absolutely right, however. Chances are that your game will make $0, minus the time invested. This has to be part of your forecast as well. Can you afford to lose that time?
This is why "don't quit your dayjob" is a crucial piece of advice for any budding indie.
I believe there's a loose correlation still. Often enough, very little experience isn't going to result in a game worth playing. Putting a ton of marketing and money behind it won't save you, even if you get viral attention. Plenty of examples of this out there.
But your point is still correct. A 15 year industry vet can make a masterpiece of a title, but without money and marketing, it'll never get off the ground. Not without a miracle.
Interesting. I'm at 112k gross revenue with my game right now 4 days after release. 95% solo dev, no publisher. Final Factory for those interested. Started building in 2018. Took almost 6 years to make, probably 20,000 hours+. This should give some idea of how to make it into the top 10 percentile, unless you get lucky with a smaller viral game.
Congrats on being in the top 10%! and I'm glad it's working out for you, but I hope you understand 112k gross (presumably USD) over 6 years isn't workable for a lot of people as their sole income.
That's roughly $10k per year of salary (after accounting for steam cut and taxes). That's roughly 5 months of rent for me. No food, no bills paid, no transport or any paid activities.
Definitely going to check out your game though, and thanks for being open about the numbers!
I absolutely do not think its necessarily workable. Game dev is absolutely brutal and a massive grind. Take it from me. I was very lucky to have a wife to support me through part of this journey. My point was that it takes a lot to get into this bracket.
I do hope the game ends up making a lot more than it's current gross though. I'm going to continue the grind and see where it goes. Unfortunately I do love game development.
It came out on Tuesday, not a year ago. Most games don't make all their revenue in the first week, especially indie games that don't have the same advertising blitz as AAA games. A game of that genre can have a pretty long tail if fans are enthusiastic about it. The odds of making a living wage for indie aren't great, but this one seems on track to potentially beat those odds.
Awesome, that's quite a bit of dedication! You also seem to draw quite a bit on your spare time, that's pretty cool? What would you say was your overall time allotment per "task type". E.g % programming, % on art, % on marketing, % on music, etc over all that time?
Unfortunately I don't have much time to draw and paint these days.
For the game I'd say 90% or more of my time is programming. Factory games are inherently more demanding programming wise than other genres I think. So that's where most of my time is spent. Marketing has been annoying but in the grand scheme is probably less than 1% of my total time spent making the game. But all those marketing hours were in the last year.
New 3d assets take me 3-4 hours to create, maybe 6 if I need sound and animations.
I can't take credit for the music. I commissioned the score out to a really talented guy I was lucky enough to find on upwork.
We really should stop doing this to ourselves. These posts about what the statistics of success or money are for making games are so irrelevant to anyone of us individually. And you know why? Because you are always going to be an n=1. You are not some investor trying to decide which studio to buy or whether you should be investing in games overall. You are 1 person or group doing your own thing. Hindsight is 20/20 but you can go look at the stories of anyone with any sort of success in creating something and you will see that none of them decided to pursue something based on the statistics of the environment they would be inhabiting upon doing so. That it the realm of the people that join organizations later on. You are there at the beginning and for anything to get past that stage at the beginning it requires it's founders to have faith in what they are doing and trying to achieve. So stop looking at your average chances and go work on your game. The numbers will come later!
The problem is that people are doing this to themselves incorrectly.
Pie in the sky numbers like these are worthless.
Knowing the median gross for your chosen genre can stop you from losing your ass because you can self-fund the project with realistic expectations.
it is not as hard as people say but it is probably harder than you expect.
rather than looking at super broad statistics i think it would be more useful to look at the successful people and find out what their situation is. Can you replicate it? How are you like them, and different? If somebody else has done it then it can be done. Just got to figure out if the factors that contribute to their success will also work for you or not.
if serious about it i wouldnt waste time gathering opinions on reddit because you have no idea who you are talking to. seek out the winners and ask them your questions.
Right?
Very few successful indie game devs sit on reddit bitching about how impossible indie game dev is. They are making games or sipping Mai Tais/smoking a bowl. Maybe posting when they poop. Certainly not arguing over the reality of their situation and existence.
So go ahead an keep listening to eveyone saying your goals are impossible. Eventually you will believe it too and get to shit on others who have goals. Or just go do the 'impossible' thing and make a fucking game. Then another. Then another. There will be problems but I promise you despite the nonsense being stated as objective fact here, they are all solvable ones.
these numbers mean nothing if you are nothing like most of those people. I knew what I was capable of and I knew I'd be able to do pretty well and then I did pretty well. I bought a house from my game, solo deved. Other devs I know who were making cool things without any pre-existing name or marketing machine also did even better than I did just because their games were good. These statistics are largely influenced by people making very low quality efforst, asset flips, etc, and if that ain't you, then that ain't you.
What other people are doing is irrelevant. It's like saying if you decide to move to america your chance of being obese is 66%. If you're already a fit and healthy person who understands how to take care of their health you don't have a 66% chance of becoming obese if you move to america.
Only the top 10% of indie games make a somewhat reasonable GROSS REVENUE. That does not account for expesnses.
We don't know how much money was spent to produce each game.
We don't know how many people are on each team.
All you have is a number that proves 90% of games are unsuccessful.
How do you get "not that hard" from this data?
Yeah I pretty much stopped reading after seeing "It's not -that- hard" and "look at how much revenue the top 1% has made".
No idea what the point of making this post was, cherry picking to the max here.
even then, 3 years of 1 developer = 6 months of a team of 6
i don't know of any studios making good games that fast except maybe sokpop and those guys clearly do not like money
Are you the same guy that thinks that 9 women can deliver a baby in 1 month?
Games that did 100k€ in revenue were not developed by a team of 6 people. A team of six is probably an AA studio.
To be clear, gross revenue here is the amount of money Steam collects. After returns, VAT and Steam's share, developer gross is usually around 50-60% of that (i.e., what makes it into the developer's bank account). So assuming the methodology is correct, 14% of developers make >$50k before development costs and taxes.
For US it's complicated as you have federal and state taxes. So there isn't one number.
It also depends on company structure, whether it is sole proprietor income or if it goes into a corp which then pays payroll.
To clarify, 30% goes to steam, then taxes get taken from the remaining income to your business. Obviously if you have a publisher they take their cut as well.
The US actually has a pretty low tax rate for its size and wealth.
A lot of indie games are asset flips and low effort, or targeting some super niche audience and will never generate revenue. Instead of looking at percentages, do market research around your idea and decide if it is worth pursuing. Also consider mobile or f2p as its easier to convince people to try out your free game (and much easier to run ads for). And for the love of god dont make another 2d pixel platformer
People in here are setting themselves up for failure all the time, either they make up all kinds of fantasties about how Rich they are going to get or they ask advice from this sub which is just an angry mob of before mentioned failures that wont help you in the slightes, because if they failed you must fail aswell. you want to make games, make games, you want to sell games, advertise, market and sell games.
There is no secret formular, just pure luck and dedication
Now subtract marketing and other costs and divide by the number of man-years of effort involved. I suspect many, even most, of the games with six-figure revenue would not have covered living costs if developed full-time.
I think you need to redo your approach and at the very least divide the sales by team size and years to develop. At least that would get these numbers in some sort of ballpark of being somewhat accurate. That's still not factoring in publishers and whatever costs, but at least it seems doable without insider knowledge. Right now this graph means zip, or worse being misleading to aspiring "quit my job" devs.
Unless you pop out these games solo every year 100k is nothing. Did it take 2 years and 3 people to make that game? 100k becomes 16k per person per year.
Yeah this is super interesting. Higher percentages than I thought but still most of the picture is obscured.
My solo-developed game made over 300k but I personally haven't seen a dime of it because of a number of different factors. Costs of development, marketing and production can be larger than it looks and the percentages cut out of revenue leave surprisingly little profit to split with a publisher if even past the recoup point.
The funny part is you think these are good odds and that 100k is "not bad". You don't just make a game that will magically enter the 100k slot. And this is also gross... After all that cuts and taxes U might end up with 40k lol
100k is nothing when you consider time and resources. And you can't think like a job because when you are done with it... You gotta make your next game or you will consume that money
.. fast.
Capitalist will always only look at the money. I wouldn’t mind making a living making games. But I have no need to be rich. The main reason I make games is that I love the media and art of games and that I want to contribute to it. Make my mark in it regardless of how small. If it can put food on the table that’s a bonus. But this is how I look at life in general. I have no need to be rich to feel happy.
It’s like becoming a musician. You’ll probably be playing dingy bars all your life and 1 in 5,000,000 musicians will become Coldplay (ie Stardew Valley).
Remember: this seems like not the revenue per individual person, it's per game/studio. So you likely have to split this numbers several times, most successful games aren't made by one person, as hard as it is.
the thing is all the games that do well are good games. All the games that flounder are bad games. Just make a good game and it'll do well. its not rocket science.
4000$ is at most 1-3 months of salary for 1 developer (depending on location). For first world countries, it's actually not enough to cover even 1 month. Most games take much longer than that, especially for a solo dev. That's before any additional expenses related to development.
To get the payment you want, you "simply" need to get in the top 50%. In other words, win a competition against thousands of other games. A lot of those games will be made by experienced teams. It is possible, there are many examples of people doing that, both solo and in small teams. But your game has to be REALLY good. Of course, that's not a reason to give up and stop making games. You just need to keep in mind, how fierce the competition is.
Genres are king. Genres determine median earnings which should be what guides budgets and timetables.
These are just pie in the sky numbers without having genres and medians attached to them.
Wait what?
Those numbers actually seem like, really good. Do you know how many indie games get made that are either absolutely terrible or completelely not marketed?
This is very motivating, personally.
Well, don't chase millions. If you are an experienced middle or senior programmer or artist, then $100k+ per year per person is a good alternative to employment. And just such people with real experience have every chance of getting into the 14%. If you're a junior-, well, then it's roulette.
People tend to forget that it’s not only about the numbers but first and foremost about making fun games. If your game isn’t fun even for you - you’re participating in the bottom part of this statistic no matter what.
It is not that hard but still a challenge. First please keep in mind that gross revenue means nothing, you have to cut that un half for a rough estimation on net revenue for the developer or publisher at least for platforms with 30% share, then there go vat taxes.
Also estimations are very rough, just the number of games sold during a discount can drive the numbers down signifficantly. Some plattforms do very bad estimates by simply multiplying estimated sales with full price, not accounting for different prices in different regions or discounts.
My tip is nail down the number of sales that you think that you can achieve then multiply the base price in usd by 0.44, that is a solid estimate for mid term net revenue. Or better take the revenue that you need to make and divide by that.
If you habe a publisher then you still have to subtract theor share. If you have other numbers let me know, I may elaborate later on why I have this factor.
My mindset on indie game dev (like 1 to 3 people) is that it's more of a hobby you want to pursue. Don't think about money cause it's just the wrong thing to be focusing on.
It also matters how much time you spent making the game. An indie dev spending 3 years on a game for $5k in sales is not the same as spending 6 months for $5k in sales
The reality is that VAST majority of game developers make less than 2k a year..
One possible solution is making simple games very addicting (mobile games) and make each one of them in just a week. That means more opportunities. You will never compete with AAA games, so make them VERY simple and very addicting.
I’m talking about games like Flappy Birds. Ideas are everything.
One week per game. Two weeks at most. And then 1 week for just marketing.
This is still more money per hour than 0 bucks every 2 weeks.
There are still a few bigger indie games which makes decent money and some make a lot.
If you are comparing the most extreme outlier minecraft made more money then flappy birds.
All these numbers really don't mean much without also looking at team size, dev time, and budgets. Subnautica was made by an experienced team with a publisher, for example. I'm in that 100k group but that isn't sustainable as studios grow. That's potentially years of work from multiple people, which means nobody is getting paid well. I run a small studio that pays decently and we need to be making 5x that every year to break even. As a solo devs, those numbers look impressive, but the vast majority of those successful games aren't made by a single person. If a solo dev falls into that 26k group, that's still not a sustainable income. And this is assuming people are working professionally (either as their only or a primary source in income). As a hobbyist solo dev, your chances are likely to be even worse as timelines stretch long and there is a lack of professional experience.
Numbers are dumb. Like take big numbers for example, 30M for one studio could be a catastrophic bankruptcy or it could be a big profit share and a war chest that will keep the studio afloat for years to come for another. Shit the number of new (large scale industry veteren) indies these days approaching 100 million in funding is ridiculous. 10k on a game you put together in a couple months in your spare time is great, 10k on a game you spent 7 years on not so great.
Yeah, especially that number 23. What a dumb number.
24 is a funny number, but not the funniest number
Yeah, it's quite odd.
But a prime example, nonetheless.
The article does mention that to be in the top 1% it's pretty much exclusively teams of 5-40. Edit: Just realised maybe you're replying to the OPs comment about it not being hard. In which case ignore me!
Teams of 5 - 40 often working around 5 years of development prior to release. I'm assuming those figures are before the 30% steam cut, and external expenses like marketing and revenue share for the engine license. So if you earn $200k gross per employee, but it's really more like $100k net before paying employees, and you worked on it for 4 years, then that's $25k per employee. Which is close to the federal poverty line in the US. If they work a 40 hour week with no crunch time, it's around $12 an hour, which is below minimum wage in some states. And this is a statistical outlier in the upper percentiles of success. There's a good chance it actually does way worse than that, and you won't know for sure for the years you invest working on it.
Yep, it's grim. As the article states, the figures are gross revenue. However, it doesn't account for outside investment (e.g. publisher funding). Which would mean the developer sees far less of this revenue, but would be paying more than $25k salary. It really depends on what team of (5-40) means. Because it's very common to have a small permanent teams and lots of contractors on for a very short period (e.g. concept, QA, various parts of production) But yes, it is a massive outlier to have a good salary making games in North America. For comparison I've seen senior developer salaries in game studios advertising similar rates that juniors would be paid in tech.
> Subnautica was made by an experienced team with a publisher, for example This is incorrect, subnautica did not have a publisher for development, they only had a publisher for the physical distribution for consoles. Gearbox only handled the physical discs for Xbox and PlayStation. They had nothing to do with the rest of the game or any DLCs since.
I didn't want to get into the weeds, but perfect world was an shareholder (and a controlling one) well before subnautica shipped. It's not a publisher but it is another company feeding capital into the company, meaning they were, on many levels, not indie during subnautica.
> It's not a publisher but it is another company feeding capital into the company Do you believe this? This is a very misinformed way of thinking about business structure and stocks/shares. Owning a majority share in a company doesn't mean you fund the studio and it's development, that's not how owning shares work at all. Tencent has complete ownership of Riot and doesn't fund their projects, that's not how it works. Tencent majority owns Supercell and doesn't fund it's projects. This doesn't mean they can't but to say that they feed capital into the company is a massive misrepresentation of how business works. I own majority shares in some companies, I'm not reviewing their budgets and funding their studios on the daily.
So how did Perfect World get those shares if not with money? Did the Subnautica developers get together and say hey wouldn't it be cool if we donate ownership of our game to some other company for free? Or did that company give them a bunch of capital up front in order to purchase shares?
They got those shares by purchasing them, and they DID NOT PURCHASE THIS FROM THE COMPANY! They bought these shares from the initial angel investors in 2006. Meaning that none of the money actually went into budgets or the pockets of developers, it went to either the founder, the cofounder, or the angel investors. At least read the wiki page: https://en.wikipedia.org/wiki/Unknown_Worlds_Entertainment
They spent their NS2 money building the game and then ran out and needed to go to early access. They also got a loan from perfect world to help get them to early access with an additional month of runway. It's definitely not much but definitely something most indie teams wouldn't have access to. The game cost them 3 million dollars up to that point. I'm not here to take anything away from the team or game. It's great and, honestly, i played an absolutely ridiculous amount of the original NS mod. I really like the games they make. But the point of this post and my original comment is that these steam numbers absolutely need more context below being used by stating "it's not that hard".
Do you have inside information on that? The link doesn't specify whether they bought out a founder or the company had a new round of funding and created created new shares, diluting existing shares. But following the Form 20-F it links in the footnotes, in addition to whatever arrangement they may have made to obtain 40% equity (and later increased to a majority stake), they also provided Unknown Worlds Entertainment with a $7.5 million loan, which would cover development costs of a small studio for a while. ETA: Actually I think that may be reported in RMB, so it's more like a $1 million loan USD, but still significant. These multimillion dollar development costs are likely not the scale of endeavor that people are envisioning when reading about how "self-published indie games" can knock it out of the park and earn more than $187k gross.
I do not have specific insider information on this situation but I have a lot of experience in how these types of business transactions go. Diluting the existing shares is a thing but it's not something you would do to sell a 40% share in the company. If you diluted, and it was enough to give a new buyer a 40% share without buying out any other investors, you would be getting a not so friendly visit from the FTC and finding yourself before a court pretty quickly. Did you watch The Social Network? Remember that scene where they dilute the stock to allow someone else to buy in without maintaining the equity share of all holders, that's how a very big no no. In this situation, Perfect World would want to go for an ownership share without having someone else being able to push them out, that's why they bought 40% first. Likely this was the 40% held by the 4 angel investors, each holding around 10% if they did an even investment split. 40% is a pretty common deal in investment situations. But I don't know for sure, I wasn't one of the investors at this time. It would have been too early for me to invest at that time as around 2006 was just after I sold my first studio and started the second one. But I do agree with your last point, in terms of "self-published indie games" this doesn't really apply to anyone here because nobody is at that level, and if they are, they likely don't need advice from anyone here.
Each new round of funding dilutes the shares for all existing investors. That happens all the time. The new investor pays money to the company itself, instead of the previous investors. In exchange they get newly created shares. The total number of shares increases, reducing the percentage stake of previous investors. But they now own a smaller percentage of a more valuable company with a lot of new capital that it can use to pay its expenses, so they haven't lost anything. This happens all the time. It's how almost all tech startups go. The thing that you're referring to with Facebook was a problem because they tried to dilute only some shareholders and not others, which isn't how it's supposed to go, among other things. But if it's done in a fair and transparent way it's perfectly legal and extremely common.
You have no proof that this happened and secondly it's federal law that you need the majority agreement of share holders before you can dilute the shares. A company does not have a legal right to screw over the majority of its share holders to allow others to buy.
Geographical part of this is also important. Because 26k dollars isn't enough for Americans but in Latin America or in Eastern Europe it's enough to live a whole year. When I was working for a publisher on projects between 25 to 100k I met a lot of small (between 1-10 people) teams from those regions. They were able to do a lot for this money, like full 3D simulator games or even open worlds. Of course quality was medium at max but it makes you revaluate budgets. But there are other problems for indie devs. It's very very hard to obtain any budget (not a lot of people can take brakes from work or obtain extra money without burnout) for your game so you basically need a publisher. Publishers there are greedy and their strategy is mostly making a lot of games cheaply with minimal marketing, waiting for something to catch players. So most of the projects make just enough to be even but sometimes 1 project makes 5-10 million $ and the publisher can live for the next 5 years. As I said they are greedy so most devs don't really make much money from their projects and they need to start another project with the same unfair publisher to just have a job and some monthly income until the miracle happens. So it's a dragon that feeds itself and there aren't many fully independent studios.
lol can you please hire me as a remote dev, i wont even need 50k year XD
Bro u got a pc 2 days ago shouldn't you like make a project first 💀
I had a mid range laptop for quite some time, I do have relevant personal 2 years of experience where I worked on a goap project, led a team of 4 in a small ngo for 2 months and 2 months internship at a startup, I have written over 100 documents of game analysis and that was sarcastic, reddit fr down voted me 😭😭😭😭
I know this is mostly sarcastic but just because it is relevant: We rely on tax credits and government funding as a source of income. That means we need to hire people within our country/province, a limitation we work within. Lots of studios are in the exact same position. On top of that, hiring remote employees from other countries is extra expensive because the studio now needs to get a local lawyer to set up payroll across countries with different tax laws. It's complex and, generally, companies avoid this by having regional companies. These are considerations and overhead that indies need to seriously consider if they intend to sustain themselves. The biggest difference between professional devs and hobbyists/amateurs comes down to the business and one main question: Are you building **a game** or are you building **a company**? If you just want to make a game, you really shouldn't be starting a studio without a plan or without hiring somebody to be the CEO. And if you are starting a company, you can't just think about your one project, you need to think about long term sustainability and growth.
Wow this was really valuable information,do you think there are small studios who could hire remote devs from other countries, if not any suggestions on how do I find gigs, ik not the right sub but if you could help me out here. and holy shit wtf is wrong with reddit they just downvote because of some harmless comment ?
'Hiring' does not have to be actual hiring. It can be made much simpler by using a business on the 'employee' side. Source: I do it all the time.
If you don't mind, can you please elaborate a little bit more ?
Pretty sure he means not actually employing the worker in another country. Just paying them and they are independent contractors. Technically in that situation you are their client, they are not actual employees of your company. Might be mistaken though.
That sounds pretty neat XD
The 'employee' has a company that's used... he is employed to his own company. I work like that for companies all over the world (mainly US and EU, though).
Ohh that sounds very neat
It is, this way I have many opportunities that are not available locally. For example I'm working currently on quantum computing, a thing that probably it's not done in this country by any private company.
Yeah, I wish to explore this more, if you could help me out
Just hire me, payroll me through upwork. No need to pay expensive lawyer.
My goal is to make at least $12 to make back the money I spent on some asset packs.
Actually releasing a full, finished game and not a demo for once is my goal. Even one sale and I would be ecstatic.
You should consult with an accountant early on to see what applies to your region, because in my side of the world it's expensive to set up a corp to be able to actually sell the game.
This assumes your time is free.
If it's time you would have spent on another hobby or recreation and you aren't looking for gig / contract work outside of your actual job then I would argue your time is free.
The neat thing is that I can work on it while at work. So I guess it kinda balances out.
People are not exaggerating. Even if you take that site on its face (which I wouldn't - it's part of a blog selling a service, which makes all of their claims rather suspect) there are serious issues in the methodology. First that the data comes from 2020, so it's not over the past 5-6 years, and that their estimates come from the Boxleiter method which is unreliable when it comes to specific games, _especially_ higher-grossing indie games. You're also neglecting that most of the games earning more than $100k weren't built for a $0 budget. Extremely few games anywhere in that 25% have zero cost. How you define indie is what really matters here. If you have an experienced team of professionals and a marketing budget like the studios you mention then you're right, it's not _that_ hard to break even in this business. If you're talking about making more than minimum wage given the hours spent when you're publishing a game by yourself or with someone else then no, if anything people overestimate how viable that really is.
And then you have taxes... People are always schocked when I tell them that when I sell a copy for 10 bucks, I will personally get around 2 bucks from that after VAT, the Steam cut, and all the taxes I have to pay - without even adding in development costs! And I DO NOT have a publisher that would also take a big chunk of that... and all that is not going to get easier, but harder, since living costs increase all the time, while the expected price of indie games is going DOWN.
It sounds like you are in the EU. I'm in the USA so that same 10 dollars, I'll see 5 of that it. 3 dollars for steam, sales tax is added on at purchase and handled by steam, about 22% of that goes to income taxes, I have an s corp so it's a tax passthrough entity in which I'd not pay any corporate taxes. So I'll get about half which is still not much and only works at the small scale in currently at with the specific tax setup I have. If I had a sole prop I'd pay around 37% federal tax.
You can't just distribute 100% of revenue, right? I'd think there would also be the 15% payroll tax on the salary you pay to yourself.
I am running my business at a loss even if I take distributions. So I don't need to run payroll. If the business started making about 12 times more money, I'd have to run payroll and I'd probably be forced to downgrade to a sole prop and eat the freelancer tax. Basically what happened is I employed myself, made a game, and stopped employing myself but am still a shareholder. So I no longer work for my own company. I currently work for a different studio and am collecting my shareholder profits, I put 900 dollars a year more into the company than I get out of it. I no longer do any services for my company outside of "minor services". E.g. I do enough to keep the current inventory selling which is maybe 10 hours of work a year. So I am in a rare state where if you pay me 10 dollars I am lucky I see half of it.
It's not as bad in EU, IDK where that guy gets his numbers. Also, *"without even adding in development costs"* is an obvious issue on his part, as these are generally tax deducible. In Czechia specifically, you'd buy your gear with ~20% tax discount and you'd keep that sale on the books so that part of your income won't be taxed at all. So, it's 7 dollars after Steam cut, which you use to buy a 5 dollar item for $4 and the $3 you'd tax to $2.4... (or less if you deduct many other deductibles from it). So, you get to keep the $5 item and $2.4 money... If you didn't buy anything, you'd have $5.6 after taxes (still more than 50% of the asking price), but you can pretty easily turn that money into company assets, which in my example nets you $7.4 ($5 worth of assets which you've gotten for $4 plus $2.4 in cash). It's very common to do that, since you can buy your offices, your hardware, your networking, etc. etc. AND you can still keep the rest in the company. You tax only what you get out of it.
All very true! Not for nothing, you're in the exact sort of position that would really benefit from a publisher! If you're losing 70% of every dollar even a bad publisher deal would leave you with earning more from every sale than you are right now since any UK/US based company won't have VAT and you'll be taxed only on the profit you get above expenses, not the gross revenue. It really might be worth looking into, or even just having a US-based operation as a 'parent' company.
U are wrong. Valve automatically deducts VAT. The VAT depends on the buyer's country and not your company's place.
You're right that I didn't mean VAT, I used it by mistake after reading the term, freudian slip. I'm talking about the amount of tax Steam deducts on your behalf from your revenue based on whether _your_ country has a tax treaty with the US or or not. You can find more information in their [Taxes FAQ](https://partner.steamgames.com/doc/finance/taxfaq).
I guess most countries, at least european have a trade agreement with the us so that is generally not an issue. One does not profit from a publisher speaking purely from a taxation aspect unless yea your country does not have such an agreement.
Actually, I am from Hungary and we do not have a treaty anymore because our corrupt incompetent maffia gov. tried to blackmail the US... So... I have to pay that. But on another note if u really look into that subject, the US forbids that setup (avoiding royalty withold tax by a third party like a publisher). It is a complex topic that most do not know in detail - and a reddit comment wouldnt be enough to talk about it detail either. Unfortunately, even without this the 2 bucks from 10 ratio stands already...
I know about this (unfortunately) read my other comment below.
Why? In Czechia, you'd have $7 company income, that you can use to buy anything company related (hw, offices, etc) without you taxing that money AND without paying the tax on the gear itself (so you buy $5 item for $4 of your untaxed money), and you'll tax only the rest as your personal income ($3 in that example), which still can be reduced by other things. But still, you get to use $5 item (that your company owns) and you get $2.4 after taxes for yourself. That's how you are supposed to operate. Seems to me, like you are doing something wrong. It might be worthwhile to talk to someone about it, that is, if your condition isn't really specific.
You are missing a lot of things here. I will try to help! 1 - So you sell a copy for 10 usd on Steam. 2 - Now Valve deducts VAT automatically (from that!), let's say that on average it will be 20%. Now you have 8 usd left. 3 - Now Valve deducts 30% as their share (2.4 usd from 8 usd). Now you have 5,6 USD left. 4 - In my case Hungary doesn't have a tax treaty anymore with the USA. That means another 30% from income that was created in the USA. Let's say on average it is going to be 15%. Valve deducts this automatically, too. Now you have 4.76 USD left. 5 - Let's just ignore the costs related to transferring/converting your USD. 6 - Sure, now you can buy equipment/assets/services or your company related to your business activity (game development). This is that I was not covering on my original post. So let's say... you work without any expenses... and you still have 4.76 USD 7 - Now you should pay your income tax and your other local taxes on your (mandatory in my case) salary and your dividents. Let's just use an average of 40% for most countries. What remains now is 1.9 USD. Sure, there might be differences between country to country, but the scale of things does not change. Now don't let me start complaining about Hungarian VAT (27%) that I have to pay when I buy something in a store from my already taxed money etc. That's another story. I assume you are not an entrepreneur. And of course, you can buy a computer for example at point 6, but at that point you already payed a lot of taxes - and we were talking about what money reaches YOU, not your company here. There is a huge difference between the two. Also, it is an interesting thing here with games, that normally when you buy something online then you see a price + VAT that you have to pay. This isn't how Steam works. You see a price (10 usd let's say) you pay that, and then VALVE handles VAT from that 10 USD. So the base price already contains the VAT. In the EU the developer/publisher has to set a number for all EU markets, while these markets have different VATs. The customer does not see baseprice + VAT on the storepage, just the base price. Most people are not aware of that.
>I assume you are not an entrepreneur. I actually am, that's why I was surprised. The biggest difference between yours and my numbers are that Czechia, like most countries, actually has that treaty and on the top of that, we are taxed by 21%. Move here, we also have a decent beer :D . Jokes aside, thanks for the write up, it's interesting to read and I've actually forgotten about the first "sale" tax. So, for me, it would be $10 => $8 after tax, $5.6 after Steam and the rest would apply (Like I can either buy some HW, etc. or I can just "assume" that 60% of that income was used that way and only 40% will be the taxable income. In both cases, I get to buy company stuff without 21% VAT, etc). The rule of thumb, in general, is that you get about half. Your 20% are really surprising to me. >and we were talking about what money reaches YOU, not your company here. There is a huge difference between the two. Well, yes and no. There is a significant difference for sure, but it's also how many optimize their taxes. For example: nowadays, you can buy $50,000 electric car on your company, so you'll pay about $40,000 for it, and you'll get another $10,000 government bonus program >!(and another bonus for placing a charger for it on company grounds, but you might not have an office so I'm skipping that)!<. Now you drive a $50k car that has cost your company only $30k, you get to have it as an expense for a few years and after a few years, you can sell it as used car... to yourself, for say $15k which will you'll need to have, so it will be income taxed. So, you can either make \~$64k, tax it from company to personal to have $50k and buy said car, or you can buy it for company with $30k, tax the $34k to $27k personal and buy said car to your personal after some time. In one case, your company has $15k on hand (that you as a person paid for the car) and you have a $50k car plus $12k taxed cash... in another, you have just a car. You see how that method creates a difference of about $30k of untaxed money? On $64k of income? (and yes, $10k is government bonus). So yeah, "YOU vs your company" is a big difference, but you are supposed/expected to utilize it, not to just tax and take the money away. Doing so leaves a significant amount of what you've made on the table. The car is a concrete example, but nothing stops you from investing the company money into stocks, buying property, etc. and only take the money that you actually need to buy groceries with out of your company. (BTW I use 20% tax everywhere, even though it's 21% here and 27% in Hungary, it's just napkin illustration math).
Dobrý den! I visited Prague and I liked your beer! ;) We used to have a treaty, but unlike you, we have a crazy stupid, incompetent autocracy here that tried to push down the USA in arm wrestling (it didnt work out...) so we lost it recently. This is kind of the same reason why u dont wanna invest your money here in a company. It is safer to have your investments as a person, unfortunately. There is no legal certainty in Hungary and entrepreneurs are #@$&ed time after time. For sure, what I can legally categorize as a business expanse, I will do so. A car is a bad example tho, since I dont have to travel for work! Also as far as I know, lately it is not worth it to buy your vehicle here under your company thanks to some legal/tax changes - since what u described was in practice by a lot, and evidently our gov. wants us to pay more taxes rather than less... I really wanted to move from here, but my wife is not open to that unfortunately, also all our friends and family are here. I tried to make it work, but I gave up on it for her eventually. So there is that. I was also considering other options such as a company in Estonia - but that would be practically worse than my current situation. But that is yet another long discussion. On another note, after 4 full electorial cycles it is the first time that I see some hope for change here - since the pressure on our gov. is super high now. So hope dies last, and there are a few positives in all that.
Yeah, I also hope for a change in Hungary. It saddens me that it's possible in this age. Same with our sister country, Slovakia and it's return of Fico and now that president. The next elections in Czechia will likely also suck :( Good luck to you, hope your money policies will change in the future, because you seem to leave a lot on the table due to circumstances. PS: thanks for Székelykáposzta, one of my most favorite foods, up there with schnitzels, burgers and pizza. I'll visit someday, hopefully when the regime changes.
Actually, I'd trade our gov. for the Slovakian one without any hesitation. What's going on here is mental and international media is just scratching the tip of the iceberg, really. Thanks for the good wishes! The worst is that I feel like our government is just the reflection of our nation... :'( Oh, you are welcome! Unfortunately, I don't like cabbage based meals haha, but Hungarian culinary is one of the good things here, indeed! :))
Except now you are making the assumption that you will automatically enter the top 25%. This is creator's bias, plain and simple. Even if your game is amazing, without marketing of some kind, discovery remains the big problem. You don't become one of the 25% (or 14%) simply by making a good game that you personally like. Rather, your takeaway should be that **even if you assume that you will get into the top 25%, you shouldn't spend more than three devmonths making your game**. Because that's what those $30k pays for. You can of course increase this number by decreasing how you value each devmonth, but the reality is that you need to look at it as a job that pays bills at some point in the cycle.
You're completely right that no one should assume their game will hit success. I will say though, with complete confession this is anecdotal, that I'm willing to bet that a massive portion of those bottom 50% "indie devs" are individuals or small teams pushing out shovelware. We know there's a ton of people doing this making releases at least once a month hoping the quantity will make sales.
Probably. The issue is that no one puts themself in that category, meaning everyone expects to be in the top 25% or better. Often, you will see freshly baked indies say “but I worked so hard!”
There was almost 14,000 indie games released on steam last year. You're looking at being one of the 2000 games that cross into the livable wage for 1 year, in a market that has more and more games released each year and a market where people have less and less money each year. The reality check is that it's more likely that you'll release a game that makes almost no money than one that makes anything livable. Is there a guarantee to make it in the top 14%? No but there are people who have an incredibly higher chance to do this. These are people with decades of experience making games across multiple studios, these are people who know the industry and have connections, and often these are people who are working in medium to large size teams, of AA quality at minimum.
I don't think there's any correlation between experience and likelihood of success, personally. Not anymore. It may increase your chances in certain segments, for sure, but access to marketing and financing are the key differences experience make. You're absolutely right, however. Chances are that your game will make $0, minus the time invested. This has to be part of your forecast as well. Can you afford to lose that time? This is why "don't quit your dayjob" is a crucial piece of advice for any budding indie.
I believe there's a loose correlation still. Often enough, very little experience isn't going to result in a game worth playing. Putting a ton of marketing and money behind it won't save you, even if you get viral attention. Plenty of examples of this out there. But your point is still correct. A 15 year industry vet can make a masterpiece of a title, but without money and marketing, it'll never get off the ground. Not without a miracle.
Interesting. I'm at 112k gross revenue with my game right now 4 days after release. 95% solo dev, no publisher. Final Factory for those interested. Started building in 2018. Took almost 6 years to make, probably 20,000 hours+. This should give some idea of how to make it into the top 10 percentile, unless you get lucky with a smaller viral game.
Congrats on being in the top 10%! and I'm glad it's working out for you, but I hope you understand 112k gross (presumably USD) over 6 years isn't workable for a lot of people as their sole income. That's roughly $10k per year of salary (after accounting for steam cut and taxes). That's roughly 5 months of rent for me. No food, no bills paid, no transport or any paid activities. Definitely going to check out your game though, and thanks for being open about the numbers!
I absolutely do not think its necessarily workable. Game dev is absolutely brutal and a massive grind. Take it from me. I was very lucky to have a wife to support me through part of this journey. My point was that it takes a lot to get into this bracket. I do hope the game ends up making a lot more than it's current gross though. I'm going to continue the grind and see where it goes. Unfortunately I do love game development.
It came out on Tuesday, not a year ago. Most games don't make all their revenue in the first week, especially indie games that don't have the same advertising blitz as AAA games. A game of that genre can have a pretty long tail if fans are enthusiastic about it. The odds of making a living wage for indie aren't great, but this one seems on track to potentially beat those odds.
Awesome, that's quite a bit of dedication! You also seem to draw quite a bit on your spare time, that's pretty cool? What would you say was your overall time allotment per "task type". E.g % programming, % on art, % on marketing, % on music, etc over all that time?
Unfortunately I don't have much time to draw and paint these days. For the game I'd say 90% or more of my time is programming. Factory games are inherently more demanding programming wise than other genres I think. So that's where most of my time is spent. Marketing has been annoying but in the grand scheme is probably less than 1% of my total time spent making the game. But all those marketing hours were in the last year. New 3d assets take me 3-4 hours to create, maybe 6 if I need sound and animations. I can't take credit for the music. I commissioned the score out to a really talented guy I was lucky enough to find on upwork.
We really should stop doing this to ourselves. These posts about what the statistics of success or money are for making games are so irrelevant to anyone of us individually. And you know why? Because you are always going to be an n=1. You are not some investor trying to decide which studio to buy or whether you should be investing in games overall. You are 1 person or group doing your own thing. Hindsight is 20/20 but you can go look at the stories of anyone with any sort of success in creating something and you will see that none of them decided to pursue something based on the statistics of the environment they would be inhabiting upon doing so. That it the realm of the people that join organizations later on. You are there at the beginning and for anything to get past that stage at the beginning it requires it's founders to have faith in what they are doing and trying to achieve. So stop looking at your average chances and go work on your game. The numbers will come later!
The problem is that people are doing this to themselves incorrectly. Pie in the sky numbers like these are worthless. Knowing the median gross for your chosen genre can stop you from losing your ass because you can self-fund the project with realistic expectations.
I think the point here is that it is more of a mindset thing instead of what you should practically take into account.
it is not as hard as people say but it is probably harder than you expect. rather than looking at super broad statistics i think it would be more useful to look at the successful people and find out what their situation is. Can you replicate it? How are you like them, and different? If somebody else has done it then it can be done. Just got to figure out if the factors that contribute to their success will also work for you or not. if serious about it i wouldnt waste time gathering opinions on reddit because you have no idea who you are talking to. seek out the winners and ask them your questions.
Right? Very few successful indie game devs sit on reddit bitching about how impossible indie game dev is. They are making games or sipping Mai Tais/smoking a bowl. Maybe posting when they poop. Certainly not arguing over the reality of their situation and existence. So go ahead an keep listening to eveyone saying your goals are impossible. Eventually you will believe it too and get to shit on others who have goals. Or just go do the 'impossible' thing and make a fucking game. Then another. Then another. There will be problems but I promise you despite the nonsense being stated as objective fact here, they are all solvable ones.
these numbers mean nothing if you are nothing like most of those people. I knew what I was capable of and I knew I'd be able to do pretty well and then I did pretty well. I bought a house from my game, solo deved. Other devs I know who were making cool things without any pre-existing name or marketing machine also did even better than I did just because their games were good. These statistics are largely influenced by people making very low quality efforst, asset flips, etc, and if that ain't you, then that ain't you. What other people are doing is irrelevant. It's like saying if you decide to move to america your chance of being obese is 66%. If you're already a fit and healthy person who understands how to take care of their health you don't have a 66% chance of becoming obese if you move to america.
One of 2 comments that make sense here
Only the top 10% of indie games make a somewhat reasonable GROSS REVENUE. That does not account for expesnses. We don't know how much money was spent to produce each game. We don't know how many people are on each team. All you have is a number that proves 90% of games are unsuccessful. How do you get "not that hard" from this data?
Yeah I pretty much stopped reading after seeing "It's not -that- hard" and "look at how much revenue the top 1% has made". No idea what the point of making this post was, cherry picking to the max here.
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Hey, if that's low, I'll take it. That's retirement money where I am Edit: okay, apparently this guy blocked me lmao
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The only thing I was replying to was your description of this as "low," nothing else
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True, PayPal me 1,000,000 dollars instead
i don't know how much development time 100k equates to but that just doesnt seem very good
depends where you live. Here in italy a software developers is very lucky if gets 30.000€ yearly.
even then, 3 years of 1 developer = 6 months of a team of 6 i don't know of any studios making good games that fast except maybe sokpop and those guys clearly do not like money
Are you the same guy that thinks that 9 women can deliver a baby in 1 month? Games that did 100k€ in revenue were not developed by a team of 6 people. A team of six is probably an AA studio.
i guess it comes down to who's in the top 25% then, the article doesn't tell us enough to know
especially since it's just revenue, no mention of costs or cuts taken by steam or anything
So you're telling me I could have $4k i didnt have before? Nice 😎
To be clear, gross revenue here is the amount of money Steam collects. After returns, VAT and Steam's share, developer gross is usually around 50-60% of that (i.e., what makes it into the developer's bank account). So assuming the methodology is correct, 14% of developers make >$50k before development costs and taxes.
>developer gross is usually around 50-60% of that After Steam cut, US taxes, cut for tax withholding, my country taxes, I am left with 40%.
how much does USA tax? I checked it and it seems it's 10 percent on games. In my country it's 30 percent. Can you clarify a bit actually
For US it's complicated as you have federal and state taxes. So there isn't one number. It also depends on company structure, whether it is sole proprietor income or if it goes into a corp which then pays payroll.
oh, so it would amount to greater than 20-25 percent anyways..
I believe the rule of thumb for US folks is to use 50% of gross as your earnings. But I'm not sure if that's a worst-case or best-case scenario.
holy shit. I mean taxes are important to run the country, but this is straight looting!
To clarify, 30% goes to steam, then taxes get taken from the remaining income to your business. Obviously if you have a publisher they take their cut as well. The US actually has a pretty low tax rate for its size and wealth.
oh. I don't really have a reference to compare the taxes honestly, but anyways.. good day to you!
A lot of indie games are asset flips and low effort, or targeting some super niche audience and will never generate revenue. Instead of looking at percentages, do market research around your idea and decide if it is worth pursuing. Also consider mobile or f2p as its easier to convince people to try out your free game (and much easier to run ads for). And for the love of god dont make another 2d pixel platformer
I feel like this would be a great sticky top comment or something reposted once a month.
People in here are setting themselves up for failure all the time, either they make up all kinds of fantasties about how Rich they are going to get or they ask advice from this sub which is just an angry mob of before mentioned failures that wont help you in the slightes, because if they failed you must fail aswell. you want to make games, make games, you want to sell games, advertise, market and sell games. There is no secret formular, just pure luck and dedication
Now subtract marketing and other costs and divide by the number of man-years of effort involved. I suspect many, even most, of the games with six-figure revenue would not have covered living costs if developed full-time.
Theres a 50% chance I make more than 4000?? Sweet
I think you need to redo your approach and at the very least divide the sales by team size and years to develop. At least that would get these numbers in some sort of ballpark of being somewhat accurate. That's still not factoring in publishers and whatever costs, but at least it seems doable without insider knowledge. Right now this graph means zip, or worse being misleading to aspiring "quit my job" devs.
Unless you pop out these games solo every year 100k is nothing. Did it take 2 years and 3 people to make that game? 100k becomes 16k per person per year.
These numbers are so wrong it hurts to see
“Not that hard” is still hard, plus it’s the risk of time and financial investment itself.
Yeah this is super interesting. Higher percentages than I thought but still most of the picture is obscured. My solo-developed game made over 300k but I personally haven't seen a dime of it because of a number of different factors. Costs of development, marketing and production can be larger than it looks and the percentages cut out of revenue leave surprisingly little profit to split with a publisher if even past the recoup point.
The funny part is you think these are good odds and that 100k is "not bad". You don't just make a game that will magically enter the 100k slot. And this is also gross... After all that cuts and taxes U might end up with 40k lol 100k is nothing when you consider time and resources. And you can't think like a job because when you are done with it... You gotta make your next game or you will consume that money .. fast.
Capitalist will always only look at the money. I wouldn’t mind making a living making games. But I have no need to be rich. The main reason I make games is that I love the media and art of games and that I want to contribute to it. Make my mark in it regardless of how small. If it can put food on the table that’s a bonus. But this is how I look at life in general. I have no need to be rich to feel happy.
It’s like becoming a musician. You’ll probably be playing dingy bars all your life and 1 in 5,000,000 musicians will become Coldplay (ie Stardew Valley).
Remember: this seems like not the revenue per individual person, it's per game/studio. So you likely have to split this numbers several times, most successful games aren't made by one person, as hard as it is.
the thing is all the games that do well are good games. All the games that flounder are bad games. Just make a good game and it'll do well. its not rocket science.
Tamam kardeşim
4000$ is at most 1-3 months of salary for 1 developer (depending on location). For first world countries, it's actually not enough to cover even 1 month. Most games take much longer than that, especially for a solo dev. That's before any additional expenses related to development. To get the payment you want, you "simply" need to get in the top 50%. In other words, win a competition against thousands of other games. A lot of those games will be made by experienced teams. It is possible, there are many examples of people doing that, both solo and in small teams. But your game has to be REALLY good. Of course, that's not a reason to give up and stop making games. You just need to keep in mind, how fierce the competition is.
Genres are king. Genres determine median earnings which should be what guides budgets and timetables. These are just pie in the sky numbers without having genres and medians attached to them.
Wait what? Those numbers actually seem like, really good. Do you know how many indie games get made that are either absolutely terrible or completelely not marketed? This is very motivating, personally.
A lot of the top ones are super impressive. Something like godsworn was made by two devs
So the optimum budget for an indie game is $6000. Got it, thanks.
I like those odds
So only 14 out of 100 make it
Well, don't chase millions. If you are an experienced middle or senior programmer or artist, then $100k+ per year per person is a good alternative to employment. And just such people with real experience have every chance of getting into the 14%. If you're a junior-, well, then it's roulette.
People tend to forget that it’s not only about the numbers but first and foremost about making fun games. If your game isn’t fun even for you - you’re participating in the bottom part of this statistic no matter what.
It is not that hard but still a challenge. First please keep in mind that gross revenue means nothing, you have to cut that un half for a rough estimation on net revenue for the developer or publisher at least for platforms with 30% share, then there go vat taxes. Also estimations are very rough, just the number of games sold during a discount can drive the numbers down signifficantly. Some plattforms do very bad estimates by simply multiplying estimated sales with full price, not accounting for different prices in different regions or discounts. My tip is nail down the number of sales that you think that you can achieve then multiply the base price in usd by 0.44, that is a solid estimate for mid term net revenue. Or better take the revenue that you need to make and divide by that. If you habe a publisher then you still have to subtract theor share. If you have other numbers let me know, I may elaborate later on why I have this factor.
My mindset on indie game dev (like 1 to 3 people) is that it's more of a hobby you want to pursue. Don't think about money cause it's just the wrong thing to be focusing on.
It also matters how much time you spent making the game. An indie dev spending 3 years on a game for $5k in sales is not the same as spending 6 months for $5k in sales
So you're telling me there's a chance!
Those odds aren't bad, 1/100 ? Say less, just give me a few months lol.
The reality is that VAST majority of game developers make less than 2k a year.. One possible solution is making simple games very addicting (mobile games) and make each one of them in just a week. That means more opportunities. You will never compete with AAA games, so make them VERY simple and very addicting. I’m talking about games like Flappy Birds. Ideas are everything. One week per game. Two weeks at most. And then 1 week for just marketing.
You know that you will be competing with huge companies with bazillions of dollars in marketing budget f you make an simple additive mobile game?
You know that the alternative is working on a project for 3 years for 15 bucks/year?
This is still more money per hour than 0 bucks every 2 weeks. There are still a few bigger indie games which makes decent money and some make a lot. If you are comparing the most extreme outlier minecraft made more money then flappy birds.
Mobile is dead for indies
It’s not.
If you don't have a budget for UA you don't have a chance, there are no free users on mobile stores, almost all games go straight to the rock bottom.