Archive for the ‘Sales Statistics’ Category

The economics of making indie games are wack

Friday, June 7th, 2019

I’m writing this from the perspective of being a full-time indie programmer/designer/producer. Basically, I run my own company and I make videogames with the help of contractors and various business partners.

In fact I’ve made 11 games so far and you can wishlist my 12th game, Ancient Enemy, on Steam here: http://bit.ly/AncientEnemy

I’ve been doing this since 2005, so 14 years, and I’d love to continue for a long time because I enjoy the lifestyle and I love making games, but… wow, it is hard to make a living from this.

So anyway, I wanted to explore some numbers so you can see why I think the economics of making indie games and selling them on Steam is wack.

Prerequisites

In order to make indie games full-time you need:

– To know how to program games. Maybe you were a hobbyist for many years (I did that), or learned in a previous job, or went to university to learn (costs money).

– A computer and some kind of programming language or engine, and probably other tools like Photoshop and Dropbox, which require a license fee.

– Somewhere to do the work. Maybe at your house. Some people hire an office (and employees) but I wouldn’t do that unless I had serious cash in the bank. It’s a fast track to disaster in my opinion.

– A company (probably). You can make games as a self-employed person but it’s easier to interact with the various distribution platforms if you own a company. Of course this means doing annual accounts and paying an accountant.

– Some business knowledge. You can’t just dive in and make whatever you want if you want to survive. You will have to analyse the market, come up with a design and a budget, find the right people, manage the project and your money, market the game, and then finally ship it.

– A lot of money in the bank to pay for your living expenses and for 3rd party contractors. OR super-low overheads like living at your parents or having a financially supportive partner or something. That was never really an option for me. Even if you have low overheads you will most likely still have to pay someone for graphics and audio and maybe marketing unless you find someone who will work for revenue share.

Some important formulas

Before we start it’s worth bearing in mind two important numbers:

1) If you multiply the number of prelaunch wishlists (on Steam) for your game by 0.5 this will be approximately the number of units you will sell during week 1. Bear in mind some games may do better but many also do worse. It’s still a useful ballpark for calculations.

2) If you multiply your week 1 gross sales revenue (on Steam) by 5, this will approximate to the gross revenue you will make in year 1. That’s assuming a) you keep putting your game on sale at a discount, and b) the game is good enough that the review score is OK and so people aren’t discouraged from buying it. There are other factors too and it’s possible that multiplying by 5 is too high in 2019 and it should be closer to 3. But for now let’s use 5.

Where do those numbers come from? I’ve blogged about them in the past after doing a couple of surveys of a wide range of developers. Also since then many devs have been using those numbers to help predict their sales and have reported back to me with their results, and the formulas seem to be reasonably accurate.

1000 wishlists for a $5 game

OK let’s dive into some numbers. I want to present several different scenarios to make my point.

First off, let’s say you want to make a small arcade/platform game with no external costs (you are using programmer art and free audio and coding the game yourself).

You want to spend two months making the game and sell it for $5 because it’s a small game and you can’t really justify a higher price point.

You manage to get 1000 wishlists for your game. This is actually not at all easy and many indies would struggle to get 100 if they are not already well-known or do not have an existing fanbase or are not amazing at marketing.

Using the formulas from above you could expect 500 sales in week 1 which is $2500 gross. If you can afford to sit around and wait for a whole year, that could be as high as $12,500 gross.

After Steam’s 30% cut and other deductions including refunds, you will probably get about 60% of that money, which is $12,500 x 0.6 = $7500 (~£5770).

So that’s about $3750 of revenue per month of work. Maybe that sounds OK to you but it’s not enough to cover my bills for my family of four.

Furthermore, in order to keep that going you’d have to put out a new game EVERY two months without a break and without going back to support the old games and without illness or vacations or family issues etc. Also every game would have to conform to my formula above and not flop. So, good luck with that…

Don’t forget 1000 wishlists is hard, especially or a small arcade/platform game with programmer art. What’s more likely is getting 100 wishlists and then your revenue for the whole year will be around $750. Can you live on that?

5000 wishlists for a $10 game

Let’s say you are more ambitious and want to make a bigger game and spend a year making it. You’ll also need to hire 3rd parties for the art and audio for about $30000. You have no marketing budget and will do that yourself, which will eat into your development time.

A bigger fancier looking/sounding game can hopefully command a higher price of $10.

Getting 5K wishlists is incredibly difficult. In fact I’ve never done it before launch for any of my games!

So 5K wishlists = 2500 unit sales in week 1 for $25,000 gross. That’s $15,000 net.

Over a year you could reach $125,000 gross which is $75,000 net.

Subtract your contractor costs of $30,000 and you are left with $45,000 for 12 months of work, or $3750 a month. Wow that’s the same as a $5 game with 1000 wishlists! It’s also a barely survivable amount for a full-time professional indie. You could easily earn more as a contractor.

And if you only get 1000 wishlists, then you are in trouble…

10,000 wishlists for a $15 game

OK, so you setup a studio, you hire an office for $1000 a month all in and you get in a team of four. That’s you and two artists and someone to handle the biz dev and marketing. You contract in the audio for $10000. You also spend $20000 on marketing, adverts and shows (this isn’t much, trust me). We won’t ask where you got all that upfront money from in the first place.

You pay the three team members $10K a month for two years. That $10K includes extra stuff like taxes that the company has to pay, medical, pension etc. Also don’t forget those staff will want to take vacations and may not always be 100% productive.

So that’s a total budget of:

– $10K x 3 staff x 24 months = $720K

– $10K audio

– $20K marketing

– $12K office

– TOTAL: $762K

You get 10,000 wishlists and sell 5000 units for $75,000 in week 1, and make $375,000 gross in year 1. That’s $225,000 net.

Subtract your costs of $762,000 and congratulations your business has gone bust and you never saw a penny in profit personally! In fact you lost over $500k :-O

If you got 20,000 wishlists that equates to $450,000 net in year 1, which is still a loss. In fact you’d need about 34,000 wishlists to break even and 35,000 wishlists to see a tiny profit: 35,000 x 0.5 = 17,500 units in week 1 @ $15 each = $262,500. Year 1 = $262,500 x 5 = $1,312,500 gross or $787,500 net, which is $25,500 profit.

Spread over two years that earns you (the business owner) $1062 a month. Was it worth it? Also how are you going to fund your next game?

Conclusion

I’ve presented three scenarios above of different sized games and teams. I wouldn’t call any of them particularly successful and yet only a few devs will be able to even achieve that level of “success”. The sad reality is that most indies will come nowhere near.

Of course if you manage to get the numbers *just right* and your game does unusually well, then maybe you can generate a workable profit and live to fight on, you might even make it really big and get to talk at GDC.
 

This is the hope I cling onto anyway – perhaps foolishly – but I will keep trying for as long as I can.

I still like Steam

I’ve said it before and I’ll say it again. I’ve done OK from Steam over the years and I appreciate that they have decent tools and a giant customer base for me to sell my games to. Also they have nice people there who listen to devs and they are constantly upgrading their platform. I will continue to sell games on Steam for the foreseeable future.

However, all that doesn’t change the reality that it is still very hard to make money from selling games on Steam.

Regency Solitaire – Steam Summer Sale vs Weekly Sale

Tuesday, August 4th, 2015

We just ran a 25% off weekly sale for Regency Solitaire on Steam and I collected the sales data so that I could compare it with the recent Steam Summer sale (June 11th-21st) which was also 25% off.

[EDIT]I’ve removed sale numbers from this post so I don’t get into trouble with Valve, but I can still share my conclusions with you.

First up, here’s a graph of the weekly sale:

And here’s the data I recorded so that we can drill down into it:

[REMOVED]

Weekly Sale Notes
– The sale was 25% off.
– I didn’t get any special feature (but I did run a Visibility Round on day 1, more on this below)
– The sale started at 6pm UK time, which is 10am PST. Days on my chart are based on UK time, which is why there are 8 not 7.
– Day 1 includes a few (not many) sales from the UK morning before the sale began.
– On Day 8 I recorded the revenue/units sold as soon as the sale stopped.
– I didn’t record wishlist adds at the same time each day but they aren’t updated in realtime anyway on Steam, so the daily change is only approximate. The totals are accurate though.
– I didn’t have any big news/press/streamers during the sale, but I did constantly self-promote the sale via Twitter.

Weekly Sale Numbers
– Total Gross = REMOVED
– Total Units = REMOVED
– Wishlist adds = 124% of unit sales
– Refunds = only 0.9% of total
– Mac units = about 9% of total

Visibility Round
– I launched the Steam Mac version on the same day as the sale started and used that as the update news for a Visibility Round.
– A Visibility Round gives you 500,000 views on the Steam front page in the Recently Updated section.
– I started the round at about 7pm UK-time and it ran out a few hours later.
– It may have boosted sales on day 1 a bit, but not a lot.
– However, there were 5x as many wishlist adds on day 1 as on day 2 so maybe it affected those more?


Summer sale is between the red lines

Summer Sale Notes
– The sale was 25% off.
– I didn’t get any special feature.
– The summer sale ran from 11th-22nd June in UK days = 12 days total.
– I didn’t have any big news/press/streamers during the sale but I did some self-promotion on Twitter.
– I hadn’t yet released the Mac version on Steam.
– Regency Solitaire was newer and “fresher” in people’s minds from press during the Summer sale but it had a lot more competition with other discounted games.

Post Sale Dip
– There’s an apparent lower level of sales after the Summer Sale compared to before the sale. I guess this is to be expected.
– The dip lasted for about 2 weeks until Felicia Day tweeted about the game which resulted in a small spike followed by a higher base level.

Summer Sale Numbers
– Total Gross = REMOVED
– Total Units = REMOVED
– Total Wishlist adds = 18% of unit sales

Conclusion
– Both sales were roughly equal in terms of revenue and units sold.
– The Weekly Sale performed slightly better in average revenue per day even if I take into account extra Mac sales, but not really enough to be significant.
– The Weekly Sale definitely performed better in terms of wishlist adds, even if I assume the large amount of adds on day 1 were due to the Visibility Round I ran.
– It hasn’t been long enough since the Weekly Sale ended for me to check for a subsequent dip in sales like after the Summer Sale.

Big Takeaway
– Why wait for Steam sales? I should do more weekly sales! (Unless weekly sales hurt normal sales between discounted periods, but I haven’t analysed that yet).

General Reception
People who play the game love the game. It has had nothing but glowing reviews in the press and it has 94% positive reviews on Steam and Big Fish Games. So that’s pretty cool.

However, it’s not selling that great on Steam as you can probably guess by these sale numbers. It’s just too niche for the Steam audience, although if it got promoted by Valve or a giant youtuber, I’m sure it would sell a whole bunch more. There are always more potential customers out there who haven’t seen the game yet, or who just need a reminder.

Anything you, dear reader, can do to help get the word out is always appreciated. Thanks!

This isn’t a disaster for us though because we aimed the game at the casual download portals such as Big Fish Games, iWin, GameHouse and more. In fact the game has grossed 10x more on those sites than on Steam!

Overall the game is a success for us, and it’s bound to have a long tail as well, like our other games.

Steam Keys for Press/Streamers

Press/streamers, if you want a review key, please request it here.
There’s also more info about the game here.

Any thoughts? Let me know in the comments. Thanks!

How to estimate how many sales a Steam game has made

Thursday, March 12th, 2015

(click to enlarge)

I was having a discussion with Ryan Clark about using the number of reviews a game has on Steam to estimate its sales. He tells me the idea came from Mike Boxleiter.

Anyway, I recently got shown this article which lists the most popular Steam games of 2014 (Thanks Lars Doucet) and some other useful data like number of owners. So I thought I’d look up the review count of the top 50 games of 2014 and do an analysis to find out what the average amount of owners (sales) are per review using the data in that article.

Units sold and Revenue estimates

This means you can look up any game on Steam and multiply the review count by a magic number (or range) – see below – and estimate how many sales it has made. Then if you multiply by the price, you can work out the maximum gross revenue the game has made, although of course sales and bundles will greatly reduce this.

DISCLAIMER:

I’m not saying this is totally accurate or anything, but it’s interesting and fun if you are into this kind of stuff. Enjoy!

Some observations and the magic numbers

1) There are 22 F2P games in the top 50 (44%)

2) The date format is the stupid American format.

3) Average owners/review for all games is 148. However, it’s 201 for F2P games and 106 for paid games. An important difference.

4) For paid games (I’m not that interested in F2P games. sorry!), Football Manager and Dizzel were outliers with over 400 owners per review, so I removed them and got an average of 81. If I take out two more above 150, the average is more like 72.

5) The lowest average for paid games was 32. If I “eyeball” the graph of values (see image at top of post), I’d said the average looks more like 60-70 as that’s the longest flat area before it hikes up.

6) So to conclude I’d say you can use 30-100 as an approx guide. There won’t be any below 30, and there’s only a few over 100. Another way to look at it (based solely on this data) is to pick 70 as a kind of mid value and use 70/2 as the lower end and 70×1.5 as the upper end (=35 to 105). Someone who is better at stats will probably rip this apart, but you get the idea.

7) Average Players/Owners is 73% for all games (57% for F2P and 85% for paid … interesting) Lowest for paid was 40% and highest was 99%. If I take out two lowest paid outliers of 40% and 45% (next lowest is 69%) this gives an 89% average. I’m not sure if any of these games have been in bundles. If so I imagine that would drop this ratio right down.

Some things I have not taken into account:

1) Date released: Some games have been around longer to get more reviews. However, we know none of these games are more than 14.5 months old and they are all at least 2.5 months old. If I didn’t have to fix the dumb date format by hand in Excel (there’s probably a smart way), then maybe I could do more analysis.

2) I haven’t noted if they are indie games or AAA games.

3) I haven’t noted the genre the games.

4) Hours played (maybe people who play more vote more? Actually I checked this with a trendline and it’s true! So if you know a game is a short game, bank on a HIGH owners/reviews value, and if it’s a long game, go for a LOW owners/reviews value.)

5) I used Owners per review, *not* Players. However, the data clearly shows that the larger % of players to owners, the lower the sales per review, which makes sense because it means that more of the owners played it and decided to leave a review.

6) These games were super-popular. It’s possible that if you check less popular games their review counts change/become more unpredictable.

I hope you found this interesting, please let me know if you think I’ve screwed up anywhere.

Also if anyone wants to do the next 100, go ahead, I need to do some work now.