Great talk here by Rami Ismail.
In an industry filled with dreamers, Rami is laying out reality. Everyone thinks they’re special or different (including me), but not everyone will be successful. In fact, the vast majority of games and studios will fail.
Rami says early on in this talk, that the majority of indie game studios don’t survive their first release. I absolutely believe it. It’s because developers blindly charge forward and assume their game will be a success. They don’t understand what it takes to make a company successful.
Let’s lay out a mini-financial plan for a solo studio.
Expenses for 1 year:
- Computer ($1,000)
- Unity license ($395 for pro)
- Yearly business tax filing costs ($500 filing fees + accountant)
- Legal fees ($2000 trademark registration, consulting, and llc management)
- Apple dev license/Steam Greelight submission ($100)
- Marketing ($0?)
- Salary ($50,000 general IT dev would destroy this amount in a year)
- Total: $~54,000
Obviously most of it going to the salary of the owner. You can scoff and say that it’s way too much, but out of that the developer must pay for a place to live/work and functional internet. It’s also significantly less than a developer’s skill set will yield in a general programming gig.
So, if you make one game per year, it needs to earn $54,000 *after* platform fees. So the real total is more like $70,000 after the 30% platform cut is factored in.
If you’re game doesn’t make $70k, it has failed.
Now let’s see how realistic that is.
I’ll quickly look at two routes, mobile on iOS/Android and PC on Steam.
Mobile on iOS/Android
You can go with the growing Free-to-Play technique or stick with the old premium route. It depends a lot on your audience which sales model will work better for you. If you somehow have a solid fan base for your first game, premium might make sense, so I’ll look at that first.
You price your mobile game at $1.99. Quick math says you need to sell 35,000 copies to make $70k.
Check out Google Play’s Top New Paid Games. You can click on games and see a rough estimate of how many downloads it has. For example, Sally’s Law is #26 on the list currently with a 4.7 Star rating, has been out for more than a few weeks, and has 5,000-10,000 installs.
Now I picked this one and random and don’t know what marketing Nanali Studios did for this game.It’s also not Nanali Studios’ first game on the Play store. But it has good ratings and is being featured by Google and still has less than 10k installs. That’s 25,000 sales under our goal, which means the game would be a failure by $50,000!
Sure, you could release for other platforms and get more sales that way. It looks like Sally’s Law is also on Steam, but SteamSpy doesn’t have sales estimates yet. With other platforms included (iOS and Steam), we might reach and make our revenue goal…barely.
What I’m trying to show you is that the odds are stacked against you. This is a very polished game with great reviews and a featured spot by the platform by an experienced developer. And it won’t make the revenue numbers that our hypothetical one man studio needs to sustain itself.
But it’s not a specific problem to premium titles, let’s look at F2P.
Free to Play Mobile
F2P revenue is a bit harder to estimate because there are more variables involved. So I’m going to steal some info from a recent post by TinyTouchables about their new game ENYO. According to Google Play, they’ve scored a bunch more downloads since the blog post was written (so maybe they scored a Google Play feature too!?).
We made about $15000 in the first month after release
So this is a game, released on both platforms by an experienced development studio, which received multiple features by Apple. It scored 300,000 downloads across the platforms. Wow! That’s really awesome, unless you needed the game to make $70,000. So with everything going right, they would have missed our revenue goal by $55,000.
Disclaimer: In the article, Arnold mentions that the dev time for this game was only about 3 months. So given longtail sales and the ability to reproduce this success, he’s actually on track to sustainably make games. Which is why he’s been doing it since 2012 and has been successful.
I hope my point is coming across well. Now let’s look at PC release for Steam.
PC/Mac on Steam
The best data we can really find here is SteamSpy, which shows estimated downloads for games. However, these include steam keys sold in bundles for well under retail price and the review keys given away to friends/media/streamers so it can be hard to glean useful information.
I tried to find a good example, but it’s difficult to pick one game and analyze it when they all have different numbers and circumstances. So, I’m laying the responsibility on you. Go to the Indie category, sort by release date, and look how many copies are sold by the games that are about a month old.
Also, notice that so many games are released each month that you have to go back 20+ pages.
Most seem to be sitting at less than 1000 owners with prices in the $5-10 range. Now if you hit the top end of that, you plausibly make your revenue goal. 700 copies x $10 hits $70,000. This is why people chase Steam so hard.
But consider that the games in this list are likely your peers. And you have to outperform them with a higher price to hit your target. I’ve also read that SteamSpy overestimates sales for the lower end of the spectrum by several postmortems on gamedev forums.
Also consider that you need to get through Steam Greenlight to sell anything there. That’s not easy if you don’t have an established fan base. Nice graphics and a unique idea do seem to be enough to push things through these day, but Steam could change this process at any moment, without notice.
People expect more polished, complex games on Steam than they do on mobile. That’s something to think about as you plan which platforms you’re targeting.
But based only on this naive approach, it looks like Steam is more viable that I expected.
And then, just when I get my hopes up…I see another Postmortem posted on Gamasutra lamenting their steam sales.
What Happens for a Multi-person Studio?
All of a sudden your salary requirements multiply. You may need to rent out a small space for you all to work and collaborate. Your games will grow in complexity as you each try to include features you want. Everything scales, and that includes the amount of revenue you need to break even.
In my next post I’ll discuss how to get around all these financial issues. But primarily, you do it by keeping your day job and keeping your costs minimal. You don’t buy anything that isn’t absolutely necessary and you assume your game will not make any money. If you depend on revenue from your first game, you’re setting yourself up for failure.