Game Development Business Model

[softwareRules]

An indie game developer has posted some of their business model here: http://jeff-vogel.blogspot.com/2019/08/i-am-cheapest-bastard-in-indie-games.html

In Fastlane Millionaire, one of the seedlings mentioned is software. If you're into games and into creating software, the basics (based on the article) look like this:

• 20 months to build a game (aka 1 year and 8 months)
• Target revenue (after game/app stores take their cut, up to 30% per sale depending on the app store): $200,000 USD
• More expenses (business stuff + insurance): $60,000 USD
• Now there's $140,000 and from that it's expenses for artists and designers to create the game art (and additional developers or designers or sound engineers or other contractors)
• Judging from the post, for 1000 terrain type pieces of art it's maybe $50 per, so $50,000 USD is gone just for terrain art and hiring a freelancer to work on those art assets.
• More art assets are needed, and that's where he digs into the cost savings (like using public domain, negotiating better rates, and so on)

Basic art costs vs good art costs:

So here is the math: Doing art the cheap bastard way, I spend $40000. Doing it the good way, I spend around $150000. 150000 – 40000 = 110000

So to justify the extra art cost, I need to sell $110000 more worth of games just to break even. Remember that number.

Freelancer vs employee costs:

If I'm lucky enough to find a good artist who wants the job, with bonuses and benefits and so on, I might be able to get him or her for $150000.

If I'm lucky enough to find a good person, with bonuses and benefits and so on, I might be able to get this person for $150000-180000.

And now I know why the book Traction recommends spending 50% of your time on marketing and getting traction for your product. If you don't get enough traction, you can't re-coup the costs of developing an indie game. The nice thing is that the game can possibly keep collecting money in the future: soundtrack can be sold separately, game art and concept art can be collected into a book, after 5 years you can re-release as an anniversary edition, you can strike gold in good marketing and get a spike in sales on a random day, etc. Basically if you do it right, an indie game like other digital products can have a shelf life that's way longer than a regular job, maybe a few years at least and maybe longer at most.

 

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