Archive for the ‘Sales Statistics’ Category

Indie Sustainability with Jake Birkett

Friday, June 28th, 2019

Every 6 months Brandon & Larry gather experts from all corners of  the industry to regroup and talk about the real issues in the industry.  Find more info at: https://www.gdux.me/ 

This is a livestream they did with Grey Alien’s Jake recently:

Jake is a veteran indie and has shipped 11 games since 2005. He’ll talk  about his approach to running a sustainable indie microstudio and will  share data he has collected that will help you to make strategic  decisions about launching games on Steam and beyond. 

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!