Your Indie Game Just Sold 2 Million Copies… So Why Are You Still Broke?

Thomas Mahler: "Since it's quite bananas that a lot of players still do not understand the economy behind game development, I thought it'd be best to just break down a real example of a really successful first-time developer who managed to make a deal with a publisher. "

[Terry_B]

I wouldnt call a game that costs 10 million to make and had over 30 people from different companies working on it an indie game.

Seriously, no.

[StoneTitan]

its an independent studio that is not owned by any big studio or publisher. what else would you call them?

[TheCaptainKuchiki]

Indie means independant PLUS low budget.
Say I'm a billionnaire and decide to fund my own game with a $20M budget, is it an indie game just because I don't call a publisher? Dev costs increase yeah, but $10M is hardly indie

[StoneTitan]

@TheCaptainKuchiki I mean there is a word, independent, now look up what independent means.

https://dictionary.cambridg...

If you are a billionaire and fund your own game your game your studio is definately an independent studio xD
Thats what the word means.

[TheColbertinator]

Game development expenditures have exploded since the old days, Terry. Office space, hiring computer techs, game development equipment and art direction all have insane costs now.

[Terry_B]

Stardew Valley.

a game does not have to cost 10 millions or even 1 million..or even 100k to be successful

[thorstein]

Office space is cheap since so many people now work from home.

The only thing exploding is the price to the customer and the CEO's bank account.

[TheColbertinator]

Regardless the expenses are still there. If every indie studio had a success like Stardew Valley, they wouldn't be begging big time publishers, crowdfunders and investors to cover development costs. Alas most don't.

[Santouryuu]

I don't get it..
He starts with 10M cost for the game excluding marketing and continues to detract "other"costs...
Why are the costs of storefront, engine etc not included in the 10M?

[thorstein]

CEO makes CEO noises.

If he takes a 1 million dollar bonus every year the game is being made and the game took 5 years to be made, the "cost" isn't 10 million, it should be 5 million.

It's just more magical accounting. This industry is replete with it.

[staticall]

@Santouryuu
Yeah, it's weird. On top of that, he subtracts engine, tax from HIS own money, but this should be put on the publisher (or at least be split, 50%/50% or how they agree), because they're benefitting from the sales as well. On top of that, he makes it look like he didn't get a cent, but he (and his team) was paid the salary the whole way through, with bonuses and stuff. Probably rent for the office was taken care of as well and licenses/devices too.

And also, he acts like his games' average price was $10 (by the way, if the game cost $10 million, who decided to sell it for $20?! Sounds idiotic), which is ridiculous, popular indie games don't do 50% discount right after release and the most of the sales are done a few months after release (according to the publishers). As an example, look at Rimworld, Dwarf Fortress, Factorio, Kenshi, they either didn't have 50% discount yet or had it years after the release.

Also, he acts like the game was only sold on Steam, but that's false. And Microsoft, i'm more than sure, didn't take 30% from them (because it's a game published by them on their platform).

The only thing this tells me is that someone is trying to manipulate us and you shouldn't work with Microsoft if you want to remain sane.

[StoneTitan]

because thats what he has to HAVE RIGHT NOW to develop the next game (engine, tax andso on)

Yes xbox of course did not have the 30% tax but then again he is just making a hypothetical, I am pretty sure their game did not sell exactely 20millions ^^

[StoneTitan]

Its not the cost of storefront. Your game made 20million but from those 20million the store takes 30%. Steam took 30% from the 20million you made. got it?
If you make 20million in sales Steam takes 6 million.
So you only get 14millions. Then you have to pay back what you owe the publisher, so 10millions in devcost and 2million in marketing.
So you are left with 2millions.
From the 2millions of pure profit 70% goes to the publisher and 30% to the developer (depending on your contract)
So you are left with 600k to pay for your next game, for now.
lots of numbers but very clearly put

[attilayavuzer]

Really enjoy the Ori games, but the studio head has always been an insufferable dickhead. Those costs aren't included cause he's miserable and full of shit.

[anast]

Someone got paid.

[leahcim]

please bring Ori to Playstation!!!!

T_T

[franwex]

Where did those $10 million go though? It’s a loan basically, but didn’t those pay through the development? Essentially the developer got paid $10 million upfront to make a game. If the game didn’t hit $12 million in sales-say $8 million. The publisher lost that money. The developer still got $10 million. Sure, maybe their next game may not be funded-but they wouldn’t have to come up with the $4 million missing. That’s a loss from the publisher.

[StoneTitan]

absolutely correct.
He is pointing out the fact that even IF you have a hit game that sells 2million dollars. Does not mean you can pay for the next project.