Indie Developers Cannot Count Money

Let me just talk about something real quick.

Tom Grochowiak, an indie dev, retweeted this…

…then added:

Now, Tom is a fellow Polish dev, and someone I respect and consider one of the smartest devs around. Yes, we drank a lot of vodka together. And then we danced to Hit’em Up. Twice.

Cough, anyway… In general, Tom is right. Some indies do have a perspective problem. And let’s not forget Sam Barlow, another very smart fellow, ran good risk management and published Her Story not just on Steam, but on GOG as well. More importantly, he also made the iOS version. At least 50K copies were sold there. So that is at least 110K copies of Her Story sold in total in two months.

However, looking just at Steam as an exercise in math, Her Story made nowhere near $250K. Tom assumes it did because:

60K copies * $6 = $360K

$360K — 30% (Steam’s cut) = $250K

But:

1. First week sales were in promo price of $5. On SteamSpy you will see that, unsurprisingly, Her Story sold a lot of copies during the first week and for that lowered price.
2. The game’s price history shows us that on the game’s website, Sam was selling pre-orders for almost half a year for the reduced price. These pre-orders included the Steam key, so that’s a part of those 60K copies sold. Also, Humble Store counts as well, and the price was not a rock solid $6 there either.
3. No guarantee the price is $6 worldwide. It’s 6€ in Europe, but we need to subtract VAT from the price (so around 20% on average). In Russia and some other territories the price is lower (it’s e.g. $3.99 in Ukraine).

All of that surely gives a lower number than $250K.

Also:

1. The game wasn’t made for free. The engine license (Unity) cost money. Plugins cost money. Tools cost money. Sounds and music cost money. The actress cost money. The marketing cost money. Possibly even more than the game itself.
2. Now, what was the total cost of everything? I have no clue, and I do not want to speculate. But it was not zero.
3. Whatever was earned, that’s before taxation. Never forget the taxes.
4. Also, the game was funded (to what percentage, I have no clue) by Indie Fund. Here’s how Indie Fund works: Once the game is released, you first pay back the investment and then share 25%of the revenue, until we double the initial investment, or until 2 years after the initial launch date, whichever comes first.
5. So that is some extra money off Sam’s pocket.

Jonathan Blow is an investor in Indie Fund, and I am not sure why he uses Steam Spy to talk about Her Story’s revenue when he surely has access to more detailed data.

Whatever is the reason, excluding Steam’s cut, Her Story did not make $250K brutto, and netto* is much, much lower.

(*That’s gross/net for you Americans!)

To be clear, I know Tom can count money and we talked about it a lot last week at so-called Game Dev Evening, an industry-only gathering of Polish devs…

I’m the one in the back, with the devil’s sign

…and I’m sure he just wanted to convey a certain message in 140 characters, without going deep into the details.

So why am I talking about it? Because I see it all the time that indies cannot count money (actually, most people cannot, but that is a different story). They are not looking for all the hidden or not-that-obvious costs, and start making their games with a lot of incorrect assumptions.

Sam Barlow is going to be fine, I mentioned the iOS, and he’ll still sell a lot of units during the next year (although with such a low starting price, he does not have a lot of wiggle room for discounts).

But what Sam has done was very smart: single dev, very cost-conscious game, unique idea, great execution. Most indies don’t do that, and then complain how their retro platformer made by a team of five for three years did not make any money.

I encourage indies to do real cost calculation when they make a game. Things will always cost more than you think. It is crucial to be cool-headed and thrifty.

Actually, I am not sure if it’s “top-tier indies” who complain about that. Maybe. But I usually see it from indies who made something no one really cares about and they are shocked that money is not flowing their way just because they made a game.

Yes.

Tough love, but yes.