Break Even

 

Break Even

As a term, break even can be misleading. It can be misleading because it does not take into consideration risk. If you start a (small) game studio with $100,000 and after one year you have $100,000 you are said to have broken even. But that’s a snapshot at that particular point in time. If you reinvest that $100,000 and after yet another year you still have $100,000 you should probably be a little worried that you profited zero dollars for two years in a row.

If next year you take a 30% loss (war chest down to $70,000)  that’s an enormous hit. You can’t sustain another full year of operations and it may snowball from there. You’d really like to go to a 30% profit, but that’s as obvious as it comes. If you ever wondered why business people seem so obsessed with growth this is why; there’s a lot of truth to the idea that you’re either growing or dying.

 

Full Time, Fun Time

Last year I calculated the cost of hiring (local) full time employees as an employer based in Connecticut, USA.

For a $60k USD salary the total cost to me would have been around $75k. That’s pretty close to a bare minimum including FICA, unemployment, Medicare, worker’s comp, 401(k) contributions, insurance, et cetera. That does include some benefits that are not government mandated such as dental.

For a $30k salary the total cost would be about $45k.

Those are 1.25 and 1.5 cost to salary ratios, respectively – not all employer costs are percentages of salaries!

The costs are going to vary a lot by location, and what kind of hardware and software and miscellaneous other fees are required to keep the company running. For example if I require Unity Pro that’s an additional $1,500 a year per employee.

Let’s say they do. Let’s say I also hire two full time $30k salary employees for a project, and I pay myself $30k a year as well. So that’s 3 * $45k + $4.5k = $139.5k of costs a year. Let’s round that to $140k for simplification.

Let’s further say the team works really well and we churn out a pretty okay game in one year. Well what does the company need to gross in order to “break even”?

 

Avocado Maths

Sometimes you just need to get down to the nitty gritty details, even if one party dislikes math.

Avocado Maths
Avocado Maths

Industry standard platform cut is 30% of gross revenue. Tax rate is variable/progressive (in the US) but let’s call it 20% of net revenue.

Aside: At least in the US, unless you are making a ton of money it should not be this (20%) high. You should definitely be able to reduce your taxable income. I just spitballed it as a high ceiling to make the math easier to digest and it’s better to be conservative at this level anyway.

So let’s say you net 56% of gross. That comes out to $140k/0.56 =  $250k to break even. There were three people working on this game, and assuming we value all of them equally each person needs to generate 185% of their cost just to break even.

But no one invests X dollars to only get X back. You expect some profit, Y. If we expect an annual 30% profit how does that affect our gross requirement? Each employee costs $45k and we expect a 0.3 * $45k = $13.5k profit. With three employees each costing $45k that comes out to 3 * $13.5k = $40.5k.

That comes out to $40.5k/0.56 = $72.3k gross revenue on top of the break even, or $322.3k total gross revenue for a 30% profit. Because of all the rounding this actually comes out to ~29% profit. Whoops!

But if you pull that off in this simplified example you’d start the year off with $140k and ended up with $180.5k. That’s not too bad!

 

Per Employee

From the employee’s point of view, they’re getting paid $30k a year. This is not a great salary, all things considered. From that they need to generate $83.3k worth of gross revenue for the company to just theoretically justify their cost. That goes up to $107.4k to hit 29% profit.

Aside: Companies (should not) hire employees to merely “break even” because again there is an associated risk involved that is not imputed into that term, and also because why would anyone want to spend X > 0 dollars to earn zero return?

This is pretty normal, and it’s also one of the reasons productive employees start thinking about saving capital to strike out on their own. I mean if you could theoretically generate $107.4k gross profits by yourself even with the 56% net that’s about $60k. Even taking into account your full compensation/cost to employer that’s a $15k raise*.

Aside: *You know, aside from the fact that you probably worked your ass off to get that raise. There are very few (maybe no) jobs that migrate exactly from 9-5 worker to 9-5 entrepreneur with a pay increase and no associated work/time/effort increase. The only way I can think of this happening is if your employer was really screwing you over on compensation; That’d be about a 33% compensation shortfall in the above scenario, less in terms of a salary shortfall with similar math.

That said there are other variables: you lose any leverage you had working in a company with company resources, you lose cost efficiencies on things like insurance and supplies. You’re working for yourself, which is quite different from a Monday-Friday, 9-5 gig. You need your own capital. You own all the company decisions. But you keep your intellectual property, and if you do strike oil you can reap all (or most or more of) the profits.

 

Steam Marines

The total cost of Steam Marines 1 was $97,913.88 USD which covered a development period of about 2.5 years from 2012-2014. It hit break even in 2014 and has been generating profits since.

Aside: Back in November 2013 I wrote that I projected that Steam Marines 1 would cost around $160k USD to develop. Off by about 40%. Estimates, amirite?

Steam Marines 1 Release Date Estimate
Steam Marines 1 Release Date Estimate

The to-date contractor cost of Steam Marines 2 is $82,607.54 USD which has been in development for about 24 months from 2014-2016. That comes out to about $3.4k per month on contractors alone. Alpha release should be Q4 2016 but so far it has generated no revenue through sales of the game as it is not yet available. It also has approximately another 24 more months slated until full release. The costs are unlikely to be linearly correlated with the last 24 months (see Steam Marines 1 mid-project estimate!) but the game will inevitably cost more than its predecessor at this point.

 

What If

What if, instead of hiring contractors, I hired full time employees instead? As a rough guideline let’s take that 1.25 cost to salary ratio we calculated earlier in this post. Let’s further assume that, had I gone that route, Steam Marines 2 would take only 2 years to complete instead of the 4 it’s currently slated for.

I said Steam Marines 2 costs would unlikely be linearly correlated, but let’s assume they are. That would mean that my contractor costs would be $165,215.08 at the end of 4 years. I have four part time contractors, but two of them have a lot larger asset load than the other two, so let’s round that to what would be approximately 3 full time employees. Well, that $82,607.54 spread across 3 employees over 2 years (as opposed to a projected 4 years) comes out to about $27.5k annual salary per employee.

Which is kind of bogus, because it’s already below the pretty low $30k in our previous examples, and that’s just salary, not including other compensation! If they were paid the still-not-great-salary of $30k and cost the company $45k, that comes out to 3 * 2 * $45k = $270k.

$270k is a lot more than $165k (64% more!), even accounting for shaving two years off the project development period. If I discount my own work at their rate of $45k a year I could cut off $90k from the total project cost. Although I also have to add my own work rate onto the project cost for the first two years. Steam Marines 2 now costs $360k after two years in employee compensation.

Additionally employers are generally expected to pay for many costs such as office space, hardware/software, and other overhead for full time employees. Contractors generally work off their own relevant resources, e.g. their own computers, out of their apartments, et cetera.

This is all also assuming that:

  • Full time employees would finish 50% faster, which seems extremely optimistic.
  • The project would hit its 2 or 4 year full release date without significant delays.
  • The linear extrapolation of cost is accurate.
  • Those three contractors accept that really-quite-bad $30k/year salary for the project duration of 2 consecutive years.
  • I can actually round 4 part time contractors to 3 full time employees*.

Aside: *Extremely unlikely. My four contractors are 1) character animator, 2) environment artist, 3) portrait illustrator, and 4) audio. I wear all other hats.

These are four fairly different roles, and while I believe 1 & 2 could perform some similar duties to one another, they’re also the two I mentioned with the higher asset loads. No, in real life if I’d run with 1-2 full time artists and contract out miscellaneous art and the audio.

People are not cogs.

So that’s why I paid contractors instead of hiring full time employees for Steam Marines 2.

 

 

Thanks for reading,
Mister Bums

You can contact me at yjseow@worthlessbums.comTwitter, or leave a comment below!

Sequels and the Past

I Think This Should Work

Recently fellow roguelike developer Josh Ge mentioned that I had been somewhat quiet when talking about Steam Marines 2 – and he had a point, at least on Twitter. I’ve more or less been getting into the swing of doing on-site testing so I can observe people playing super early builds of the game. I think it’s been enlightening.

But the observation’s not exactly correct, either – I’ve just switched up my strategy for keeping Steam Marines 2 alive and kicking at the back of skulls through a system of scheduled media across several sites and forums; I’ve just offloaded a lot of my groundswell marketing efforts off of Twitter.

Aside: Have you not heard of Josh’s game, Cogmind? You should totally check it out.

Cogmind gif
Cogmind!

Todo Lists and You

I used to keep rather detailed todo lists with high and low priority and “maybe” sublists and subtasks with estimates of time to completion in minutes. I don’t do that anymore.

Now my todo lists are split into simply high and low, I keep my high priority list capped at eight items max, and I estimate task completion in days. Additionally any high priority task that does not get completed within the time estimate gets kicked down to low priority.

I changed from high/low/maybe because maybe was just becoming a dumping ground for low priority tasks I wanted to clear out because of time crunch. I switched to estimating task completion in days because frankly estimating in minutes was pointlessly granular and I’m starting to believe that “large” task milestones per day is a better metric overall than time spent per day (in the sense of it is a more accurate indicator of progress.) Capping high priority tasks to eight is largely a method of preventing too many issues of becoming “high”.

When All Tasks Are High Priority

There are differing opinions on time tracking, although maybe not all that different!, although I maintain that keeping a mental model of what I want to do and what I should be angling toward is a net benefit to me. Your mileage may vary.

 

At Some Point You Have To Start Listening To Yourself

This is tricky because I spent the last two years writing part 1 and part 2 of this blog series explaining how I was a ding dong. It can be a bit unintuitive, but you sort of need to be humble enough to admit you don’t know a lot but also arrogant enough to trust yourself to make decisions because you will inevitably be faced with making judgement calls that are unclear and on topics people with more experience than you have disagree on.

And ultimately what matters is that it works for you, not them. In your situation, not theirs.

In all other cases, hypothesize, test, draw conclusions, and repeat. If it has demonstrably good results keep doing it.

Steam Marines 2 is a sequel. There don’t seem to be that many indie game studios that do sequels. It probably has to do with high failure rate.

But I want to make Steam Marines a franchise: a video game series, a board game, a trading card game, sell merchandise, and so on and so forth.

People have told me it’s a great idea, others tell me it’s a losing proposition. The divide seems to be between developers who believe in failing fast and those who don’t. Franchise building is hard and it takes a lot of time. Risky, say the fail fast crowd. They’re probably not wrong.

Still it’s a goal, and one I think I can achieve.

Aside: I rolled the idea of funding a games analysis/news site around in my head, but ultimately I couldn’t figure out a reliable business model. It really does seem to be a brutally difficult field to succeed in long term.

Motivation

Know what’s cool? Having hardcore fans of your game who still play it years post-release. That’s wild to me. Even wilder? Steam Marines 1 is still kind of in a long tail, selling copies regularly that keeps me fed. Its revenue in 2015 more or less paid for Steam Marines 2 development costs in the same time period.

Also gifs. Lots of gifs.

Steam Marines 1&2 Comparison
Steam Marines 1&2 Comparison

Bonus: This gif informed me that my marine hit animations were broken in the current build. Whoops.

Side projects keep things fresh, even when you’re 2 years into a 4 year project – when you’re in the grinder. I’ve been tinkering with old financial tools (non-game development related), watching some cool stuff on Netflix, and cannibalizing old games to make new ones like this:

Tilting Hard
Tilting Hard – Damn that hitch in the middle!

Twitter is pretty good for this, too. It’s real nice watching devs you know release their games. This blog is also a pretty okay place to rant if need be. I still haunt /r/GameDev now and then, although as the subscriber base grows the place does seem to get more hostile toward even the ideas of running a business and marketing. I also re-read certain articles and re-watch certain videos that are both enjoyable and educational. For example:

I also torment myself by reading news about the US election and Brexit, but that may be too masochistic for many.

538 Nowcast 2016
Fuck  Trump

 

Alpha Release

Steam Marines 2 is nearing its initial alpha release. Itch seems more or less ideal for me because I wanted to 1) narrow my pool of prospective players, and 2) iterate without the almost inevitable backlash that Steam Early Access is coupled with. I also wanted to test some theories I had on pricing, and that’s easier to do with fewer players.

I hope reception is good. I’ve worked on the game for a little over two years now, and that’s a lot of time and effort to spend on anything.

I’ve been trying to get better about working reasonable hours. That is, anywhere from 40-60 hours a week. Which is still a bit obscene, especially taking into consideration that in the US private sector the average hours worked per week is about 34.4. So I’m working on that. But I still don’t know any successful entrepreneurs who worked 40 hours or less a week during the first few years of their business launching. Worthless Bums LLC was formed in October 2011, so I guess maybe I’m a little behind the curve.

I track my hours worked, and I graphed it back in August this year:

Way Too Many Hours
Way Too Many Hours

Part of the problem is I don’t want to grow fast or leverage up. I have the funds, and I can raise more, but I’m having some personal issues with giving up control – namely of code and design. I don’t even like design but I find it hard to give up control.

Another is that I’m a workaholic. I’m always doing something. I can barely sit still for half an hour of television.

Despite (because of?) my ridiculous hours of work, my return on investment, per hour, is good. Unfortunately not as good as my passive investments over the same time period, but my investment portfolio outperforms the S&P 500 by a fairly wide margin; I’m not at all unhappy with my game development business as a business.

Versus S&P500
Versus S&P 500

I’m in a good place financially – I have no grounds for complaint. I can fund Steam Marines 2 development through 2018 without selling another copy of any game so that’s nice.

 

Acts of RNG

I did get tripped up a bit with contractors in 2016.

My character animator decided to take some time off to focus on his own game. This is cool, although the timing was not the best for me – you sort of have to expect this in multi-year projects, even if your contractors are not working on your stuff full time and/or at top priority.

Elasticity
My character artist, Ed’s, Game… Thing

My environment artist got chased out of his home by Hurricane Matthew. Oh dear.

I was a bonehead and because of a communication mixup I wasted a month thinking I was waiting on audio from my audio guy but he was actually waiting on me. The lesson here is don’t go too long without touching base. Depending on how dependable you and the other person is, I recommend touching base at least once every 2 weeks. That said I have a fairly hands off approach to my contractors.

Still, I’m going into 2017 fairly optimistic. Unless the Steam Marines 2 alpha explodes in my face. We’ll see.

 

Thanks for reading,
Mister Bums

You can contact me at yjseow@worthlessbums.comTwitter, or leave a comment below.

No More Tales

(I apologize for the high number of links in this post. I’ve also pretty much decided to no longer speak publicly about game development finance for a variety of reasons, so I’ll be skirting some points and issues.)

 

No More Tales

Apparently Tale of Tales, developers of Sunset, are closing their doors. Their official site is hammered and down at the moment so the first link is a GameInformer one. The upshot is they went into debt, sold only 4,000 copies between crowdfunding and the Steam sale, and have decided to no longer make games commercially.

It is always unfortunate when a group of creatives can no longer fund their activities. That said there are lessons and warnings here that have have to do with marketing, creative vision, and being realistic.

The first is that knowing who your core audience is, and being able to reach them, is of the utmost importance, more so than ever given that Steam has opened its gates. Tale of Tales has been around as an indie game company since 2002. They had 2,228 backers on their Kickstarter campaign in 2014, raising a total of $64,636 USD. The combination of gross unit sales and backers and sales history (which they know but I am not privy to) should most likely have indicated that their core audience is extremely tiny, almost certainly under five digits.

It sounds like they tried to do everything right in a traditional indie game developer manner; Broaden the appeal, spend on marketing and advertising, and lean on external funding. Whatever the case may be the aggregate result is now failure in a monetary sense.

It is always easy, though perhaps not any more accurate, to pick at details in retrospect. I know first hand how jumbled the process can get when you’re elbow deep in the guts of making and marketing a game. That said there are some broad stroke, red flags:

  • A “game for gamers” Sunset is surely not. If they believed this they truly missed the mark in understanding who their audience was and the market at large. There are enough people making abstract art games that it’s fairly well-established as a niche more than an underserved market.
  • Advertising, as in the act of purchasing ads, is not useful on a small scale. This, too, is fairly well known particularly on the internet. Maybe a game like Sunset can’t push for hard YouTuber or Twitch streamer cooperation. Maybe it’s just not that kind of game. I can’t offer a solution here, but I can diagnose the problem. That was probably wasted money.
  • Good ratings are good, but it has to take into consideration the total quantity of players as well.

The third point is desperately important. With the advent of a more open Steam, GOG Galaxy being in beta, and Itch growing remarkably quickly, literally everyone has wider access to the gamer audience.

It has been my observation that many small indies these days are selling a few hundred to a few thousand copies of their games and are ecstatic. And they should be! Baby steps is how anyone gets through this ever-changing market. But that is not sustainability. When you get 100% positive reviews out of 20 that is not so remarkable. Pretty much anyone can shake up 20 positive reviews from their personal pool of friends, relatives, and friendly developers.

Your parents might tell you your game is the best thing ever, but your parents are not your core audience. As I mentioned in a previous blog post,  you need a resounding YES. Not a lukewarm yes, nor a bright YES followed by words and no sale. A marginally interesting game someone will pay ten dollars far is superior to an enormously interesting game someone will not pay anything for. Steam refunds is a thing now, too; software is catching up to the physical goods world.*

This is a hard pill for creatives to swallow, but we’ve all swallowed it in micro-forms throughout our careers. When you agonize (waste time) getting that thing just right that no one ever notices. Even game critics miss this so often – almost every game that’s not a pile of poo was a labor of love, that was iterated over and polished in some parts and not others. It’s just that the games that gain followings, large followings, get examined thoroughly enough to merit such deep analysis. Who wastes their time dissecting games that are popularly perceived as trash?

This is the hard truth – no one starts off caring about your creative prowess, your time and effort spent. You do not deserve their money, their attention, their time; You have to earn it.

This is why so many creatives fall back on the luck argument. It dodges all the hard truths and lends a fallback excuse. People don’t talk about luck when creating material objects nearly as often. Maybe because the physical fetish can somehow snap a critic back into reality – this is a thing*.  For some reason software has less of that effect on most people.

 

A Number

My number is 20,000. That is the number I want to personally hit as the number of core users for the kind of games I want to make. In my circumstances 20k unit sales, at something like $10-20 USD each can keep my head afloat and making Next Game. Other game developers, some more experienced than I am, tell me that this is folly, that I am setting a trajectory for crashing and burning. Maybe they can see something I can’t.

But even if they’re right and I’m wrong, you still need to know your number. You need to aim for it hard. If there is no Next Game, there is no game after that.

 

Thanks for reading,
Mister Bums

You can contact me at yjseow@worthlessbums.comTwitter, or leave a comment below.

Game Development Videos to Watch

Obsessive-Compulsive Development: Retro/Grade Postmortem

GDC Vault video link (~33 minutes).

Matt Gilgenbach discusses what went wrong with the development of Retro/Grade and (perhaps) common pitfalls between developers and their labors of love.

 

Guy Kawasaki: The Top 10 Mistakes of Entrepreneurs

YouTube talk at UC Berkeley (~84 minutes).

Guy Kawasaki is probably best known as former chief evangelist of Apple. He refers mostly to software startups/entrepreneurs in venture capital stages, but many of his points and lessons are relevant to game development, especially with the rise of crowdfunding.

 

Brenda Romero: Jiro Dreams of Game Design

GDC Vault video link (~57 minutes.)

Brenda Romero, known for her work on the Wizardry series, talks about making great games. She speaks on deliberate and comprehensive design, draws connections between the culinary arts and games, and failure.

 

Juice it or lose it – a talk by Martin Jonasson & Petri Purho

YouTube talk with demo game and code links (~15 minutes).

Martin Jonasson and Petri Purho of Jesus vs. Dinosaurs fame talk about bringing your game’s attention-holding capabilities to the next level. Filled with salient demonstration and a real-time generated audience laugh track.

Budgeting

(Note: This is primarily aimed at indie game developers because of recent Reddit and Twitter conversations involving costs, budgeting, and valuing people’s time and efforts.)

 

Funding

I’m firmly against “flexible funding” like IndieGoGo allows. Flexible funding means the campaign receives whatever funds it has raised regardless of whether the “goal” was reached.

The two main reasons for this are:

  • Flexible funding means the creator(s) don’t have to think hard about what they actually need to accomplish the project goals.
  • Flexible funding means they’ll get an inadequate (according to them!) amount of money to try to accomplish the project goals.

Like any other commercial venture one of the biggest risks is simply that the product will not be delivered. This is why a prototype is so significant to have in a crowdfunding (CF) campaign. If you have an early, but working, product in hand that people can poke at and use it greatly mitigates this risk.

Technical and creative chops are requisites for shipping games, but something else can also derail an otherwise on track project: funding. This is why crowdfunding has exploded in recent years after all; people need money to create games.

Aside: Savvy readers will most likely notice a venture capital (VC) undertone to this blog post. While there are lessons one can take away between VC and CF, please note that they are not the same. CF, despite what many people say loudly and repeatedly, is not investing outside of an obtuse, layman definition of the term.

 

Budget

You should have a budget. There are many kinds of budgets but revenue, costs, and profits should always be a part of them. For a game development budget you should have, at the bare minimum, these items:

  • Labor and asset creation costs (e.g. cost to model, rig, and animate a character.)
  • Capital expenditures (e.g. cost of a development computer and two monitors.)
  • Marketing/PR/Advertising costs (e.g. buying Google ads.)
  • Tech support costs (e.g. paying someone to respond to irregular issues.)
  • Quality assurance costs (e.g. pay tester to regression test.)
  • Distribution costs (e.g. platform X takes Y% of gross.)
  • Unit price (e.g. $9.99 per copy of the game.)
  • Projected sales/revenue (e.g. gross $50,000 six months after the game’s release.)
  • Tax/legal/other fees.

In other words you need to create the game, market the game, sell the game, support the game, and collect your money.

If at any point you read one of the above bullet points and thought, “Well I’ll do that myself so it costs nothing” you need to pay more attention to this blog post. None of those costs are zero. They all cost something. You may not personally pay the cost. The cost may be intangible. The cost may be tangible but is not measured in dollars and cents.

But they all cost a non-zero amount.

There was a Reddit post in /r/GameDev recently that highlighted the primary problem: people do not understand what constitutes a cost. I’ve chosen some in-context quotes without attribution to demonstrate:

“Not everyone works on their game full time. If I work on a project after work in my spare time, then that is a 0 budget venture. I’m not spending any more money than I otherwise would have just sitting and watching TV.”

“If I worked on a project for a year in my spare time, it would be exactly the same financially as if I just played video games instead. Therefore, its not cost me anything.”

“Doing game devNas a hobby, you can’t count something thayt would be there regardless as an expense. Ill have a job and pay living expenses whether I work on a game or not.”

“I have a full time job and just work on games in my spare time. As for whether I value my spare time, what does it matter? If I’m not coding, I’ll be playing video games, or watching TV, or playing a game with my wife. I’m not spending any money doing game dev that I wouldn’t be otherwise.”

“It’s called ‘free time’ – you do whatever you want with it and don’t generally put a price on it.”

“For people who are developing games on their own, and have no outside funding, adding their own time to the budget is useless. They are not spending any money on themselves to make the game. Obviously, things would be different if I had a crowd funding source like KickStarter I would probably start budgeting my own time.”

“The purpose of a budget for independent devs is to figure out if you have enough money to complete your project, and if not how much you have to raise or how much scope to cut.
A high school kid working evenings on his game reasonably could have a budget of zero.”

I think you get the idea. You should have winced very hard at every single quote above. They all demonstrate a lack of understanding of opportunity cost and the far less complicated idea that time and effort are not free.

The last is true on its face, but if you need further convincing a simple counter-example is that if your boss asked you to work overtime for extra pay, and you agreed, you surely would not consider the overtime pay as free money. Despite the fact that you worked in your “free time”. Despite the fact that you didn’t need to work overtime. Despite the fact that you did not out of pocket spend more than sitting down watching television.

You certainly would not appreciate your boss forcing you to work overtime for no extra pay because of those facts.

So you should have a budget. A budget with even rough estimates will give you an idea of whether you can afford to complete a project (assuming nothing goes wrong!) A budget lets you know the lay of your costs so you can better determine what can be cut or extended. A budget is what a professional makes because whether it’s your own money on the line, or someone else’s, you can be confident that you can deliver within the constraints and specifications of the project.

Aside: There are serious ethical considerations involved with failing to understand opportunity cost and cost in general. This kind of financial incompetence manifests in vaporware, ridiculous CF campaigns, and, perhaps most insidiously, the poor treatment of freelancers.

It is no secret that there are many clients (game developers) that undervalue the time and efforts of artists, musicians, sound engineers, writers, et cetera. Grab a hold of any freelancer and she’ll be able to tell you horror stories; she’ll also be able to point at all her freelancer friends with similar stories to share.

Financial competency is not just a project management necessity, it’s also required to not swindle yourself and others. The stakes are raised in CF campaigns when other people’s money is involved.

 

Real World Costs

Hopefully by this point I have convinced you that time and effort are not free and a budget is useful, if not completely necessary. The same Reddit thread I pulled the quotes from also had some developers who kindly posted general overviews of their own costs:

“We’re a team of 4. We spent roughly $100k developing Shattered Planet for Android, iOS, PC, and Mac, paying ourselves $2k a month for 9 months, from an incubator/accelerator. We’re officially incorporated, but currently we’re hosted by a university as “visiting researchers” because we get free rent and computers/software for doing so.

It was our first game together, and I anticipate we’ll be more efficient for our next one, Moon Hunters, which has a budget of $150k (mostly from an investor, but partially from Shattered Planet sales). One of us has gotten a raise, but it’s not due to skill/value, it’s due to being deeper in debt than the rest of us and being unable to continue any quality of life at $2k a month. This will be coming out of his bonus from Moon Hunters sales.”

Tanya X. Short

 

“$17,475 after spending 1,382 hours over the past 385 days, with at least another 6 months to go before 1.0 (though it will be released before that).

I don’t have a budget, but that doesn’t mean I don’t have expenses, because I certainly value my time which could have been spent doing something else like watching TV. (Not sure why, but that example seems to be brought up every time one of these threads gets discussed. That I haven’t owned a TV for more than 15 years is beside the point 😉

I value my time based on the hourly wage I’d need to get by assuming full time work (i.e. 40 hrs/wk). That comes down to $12.50/hr. Sure I could (and do) make more doing other work, but I’m willing to drop my rate as low as possible since I get to follow my passion.”

Josh Ge

You can also refer to an older blog post, Commercial Indie Games & Risk, where I discuss the development costs of my game Steam Marines as well as Braid, N+, and Dustforce.

 

Valuation

There can be a gray area over what constitutes fair remuneration for their time and efforts depending on skills, experience, and geographical location, but the overarching principle is the same – it’s not free.

I’d like to draw attention to 1) Tanya’s comment about rent, computers, and software since her team was categorized as “visiting researchers”, and 2) Josh’s comment about his $12.50 hourly wage.

While Tanya describes the goods and services as “free” they’re not literally free. I’m not 100% familiar with her team’s academic arrangement but generally speaking visiting researchers are required to lecture/research while they are visiting; the academic institution is simply spreading the cost across its faculty/staff/services/capital structure. This is a value proposition exchanging salary for amenities that have an economy of scale.

I suspect I would consider the budget valuation on the low end with regards to Shattered Planet, and that seems in line with one team member’s raise in Moon Hunters development.

Aside: If you work from home (in the US) you can claim home office deductions. Further if you are a student who is dependent on your parents, there are still tax incentives to file rent/food/et cetera as business expenses if the student is actually running a business from the home, even if the business has a net operating loss.

In Josh’s case he lives in Taipei, a fairly inexpensive location as far as international cities go. Moving to, or already being in, an area with a low cost of living can be an effective cost cutting measure.

 

Opportunity Cost (again)

Opportunity cost is, generally speaking, not intuitive to most people. Even people who should understand opportunity cost may not. Please understand that “I would have done <insert zero financial value activity> instead” does not imply zero opportunity cost. In fact it is very, very difficult to incur zero opportunity cost – some might say that for all intents and purposes it is impossible to do so.

Aside: Away with your PPF graphs, economics students!

As mentioned earlier cost, not just opportunity cost, does not have to be measured in dollars and cents. Cost can be intangible.

 

Closing Thoughts

Opportunity cost is real. Time and effort have value, although not necessarily positive value. These are true for everyone – yourself, yourself when you’re hired to perform a job, and others whom you might hire. Do not deceive yourself into thinking your time and effort cost nothing. More importantly do not deceive yourself into thinking other people’s time and effort cost nothing.

There are zero reasonable circumstances under which time and effort are free. It doesn’t matter if you’re a student, if you’re already financially secure, or your primary useful skill is licking stamps.

Aside: I pointedly observe that even your corpse has value, which is why people can be body donors.

So spend some of your valuable time and effort and determine how to use the rest of it efficiently and effectively.

 

Thanks for reading,
Mister Bums

You can contact me at yjseow@worthlessbums.comTwitter, or leave a comment below.

It’s (Not?) About the Money

Bias

I’m biased. I like to eat. I like being kept around the normal range of human livable temperatures in all seasons. I like to save money so that one day I’ll be able to retire. Sometimes I like to buy games so I can play them.

This blog post is mostly a response to this article and the conversations that ensued around my Twitter. There is also a TL;DR at the end of the post, but I hope you resist the urge.

 

Anger

Irritation is the most accurate description for how I felt after reading that article. But that irritation fully blossomed into anger when I started seeing financially successful indie game developers siding with the author of that article.

 

Money, the making of

I would like to start with the article’s premise: that indie gaming has an obsession with making money. Source, please. Anyone? I didn’t think so*. (Note: see bottom of blog post.)

Between the massive amounts of game jams, experimental games, clones, quasi-clones, et cetera made for fun by students, hobbyists, and even professional game developers, it’s not a stretch to say that there are a lot of games made without even an attempt at financial remuneration. I personally participated in 7drl 2014.

But I’ll give you the premise. I will give you the premise just so we can move on.

 

Bankrupt: Creatively, but not monetarily!

Holy shit.

App Promo - Wake Up Call
App Promo – Wake Up Call

You’re telling me that indie developers are so focused on making money, too focused on making money, that 59% of app developers don’t break even on development costs? I know a little bit about development costs. More importantly, I know many developers don’t even know how to calculate development costs. I know this because I get into arguments with them about valuing their own time and efforts and about opportunity cost. If anything the real figure is higher because they are chronically under-reporting their development costs.

Another survey paints a very bleak financial picture of indie game developers:

“Half of indie developers made less than $500 from the sale of their games (which includes in-app purchases and DLC); 13% made between $500 and $3,000, 15% made between $5,000 and $30,000, and 5% made over $200,000. Alternate sources of income (advertising, awards/grants, sponsorship opportunities) remain hard to obtain; 79% of indie devs didn’t make any money from these methods at all. Of the devs that did, 25% made less than $100, 28% made between $100 and $2,000, 22% made between $2,000 and $10,000, 5% made between $10,000 and $20,000, and 20% made over $20,000.”
– Game Developer Salary Survey of 2013 

I know what you’re thinking. Well, they’re not making money because they were making their games with the goal of making money, not making great games! Bullshit for three reasons:

1) Neither you, nor anyone else, is an authority on great™ games. There are simply games that have varying numbers of players and customers. I think 868-HACK is amazing. Other people do not. Most other people have never heard of it. This is unique to zero games.

2) Minecraft vs. Infiniminer. Spelunky pre and post XBLA.

3) There is literally no hard evidence that making a game for money, even primarily for money, results in a terrible™ game. At best you can offer examples of games that were made for money that turned out terrible. You can also find examples of games clearly made for money that turned out well in both Indie and AAA spheres.

Aside: #3 is also a crazy claim because you are currently using about five bajillion (rough estimate) pieces of interactive software, most of them created with commercial profit as a primary motivation, in your daily life that you generally do not consider terrible. They are creative, functional, have cultural impact, and are generally good™ products.

But games are special. Special little snowflakes.

 

Status Quo

I mentioned earlier that the article only irritated me, that the anger came after financially successful indie game developers hopped on board the “money is evil and corrupts all!” choo-choo train. I iterate this because I really want to hammer this home:

Any time someone who has profited from a system tells you that you are focusing too much on the profit, tell them to piss off. Or at least quietly view their opinions with internal skepticism. How convenient that they’ve gotten theirs and:

  • They’ve got the money and tell you not to chase the money!
  • Overcrowded (Steam/Greenlight/cough)! Too much competition for established developers!
  • Starving? Doesn’t matter – focus on the intangibles!
  • Lazy comparison to creative conservatism between Indies versus AAA. How convenient that they leave out every other relevant bit of information and just equate money and creative stagnation. You notice how these same people don’t go crowing about how chasing money is bad when they, or people they know, need to run crowdfunding campaigns? The story changes so fast it’ll make your head spin.

Aside: The Money = No Creativity argument is particularly galling because it promotes the idea that you have to be a starving artist to be a real artist. Or a real indie.

It also promotes the idea that indie developers should be allowed to get away with paying their employees and freelancers less than non-indie developers.

 

One kernel

There is one kernel of truth in that article. It comes in late, near the end:

“… the games that are most widely written about, from Flappy Bird to Grand Theft Auto to Minecraft, are the financial juggernauts. But these are not the only success stories.”

Well shit. That’s sort of the domain of the writers writing about games, isn’t it? It seems like many of those writers have an obsession with using financial success as the only metric to write about games.

Aside 1: You want your game to be culturally relevant? Get people to play and tell other people about it. That’s the only way. You may think FarmVille and Angry Birds are crap, but you didn’t have to Google either of those two games, did you?

Aside 2: This doesn’t just apply to (indie) game developers. Are you a writer? Musician? Sculptor? Get people to read, listen, and look at your stuff. That’s the only way.

 

TL;DR

  • Indie game devs are poorly paid. Shut up about too much focus on money.
  • If you’re okay with maintaining a status quo that supports you at the expense of others in your industry, I don’t wanna be friends with you.
  • If anyone is overly focused on indie games and money, it’s apparently people writing about games (me?)
  • To indie game developers who are new and/or struggling: chin up, make games others can’t even dream of, and never be afraid to ask for payment.

  yjseow@worthlessbums.com, Twitter, or leave a comment below.

7 Day Roguelike (2014)

Jam, Jam, Jam

7drl is my first game jam, possibly being paired with Procedural Death Jam. I had an itchy feeling to make a Judge Dredd type of game (in terms of mechanics, probably not atmosphere or environment.) It will probably be called Crime Central (I can change it later if I want to!)

Due to some real life time restrictions I won’t get the full 7 days worth, but that’s okay; I can always think about it when doing some other, non-game related stuff. My main objective is actually to sit down and railroad a full game so I can get the full taste of Unity 3D for future projects. To that end this is a rough schedule I’ve got for myself:

 

Day #1 – Plan and design (~9 hours)

Determine main mechanics and aesthetic. Create some music so I can loop it over the next week and determine whether it’s annoying or not!

Get going on the core gameplay. Generate levels, spawn the player and enemies and obstacles, and get some basic interaction going. Write this blog post.

 

Day 2 # – Flesh out (~6 hours)

I probably made a bunch of mistakes in Day One. I will wake up feeling irritated and make a lot of coffee. Make a main menu. Make a death screen. Make a victory screen. Maybe make a boss. Save state?

Game options or alternate control schemes? This is supposed to be a full game, not just a tech demo!

 

Day #3 – Tweak and polish (~6 hours)

The game balance is probably non-extant at this point. Start to fiddle with resources, turn management, enemy spawn count and positions, et cetera. Is the game fun? Is it challenging? Is anyone going to play this pile of crap?

Think about open sourcing the code while eating candy.

 

Day #4 – Oh crap! (~3 hours)

This is the authorized time to panic. Last day to work on this so squash any remaining showstoppers, run through the game a few more times to make sure nothing obvious was missed, and build for Win/Mac/Lin.

Let the roguelike community eat my face. Maybe I’ll get lucky and find myself with more days/time toward the end. But 24 hours should be enough to slap something playable together, for sure!

Aside: Those are some famous-ass last words.

I’ll be updating this blog post as I progress. Interestingly if I succeed then Crime Central will be the first roguelike I finish, not Steam Marines.

 

Thanks for reading,
Mister Bums

You can contact me at yjseow@worthlessbums.comTwitter, or leave a comment below!

 

——————————————————————————————————————–

Updates

8 March 2014, 12:41 a.m. EST
Finished the main music loop for actual gameplay. Still need main menu music. May wait to do that later.

8 March 2014, 1:10 a.m. EST
Finished a basic level generator with placeholder graphics. Pretty easy to knock out if you’ve made more complicated level generators before. The real meat is ahead!

7drl 2014 - Day 1, Level Generator
7drl 2014 – Day 1, Level Generator

8 March 2014, 1:55 a.m. EST
HUD elements! I hate (G)UI so I figure throw some elements and slave everything to them rather than the other way around. Keeps feature creep in check, too.

Added basic enemies. Don’t let them catch you, or they’ll.. keep catching you? Added an event log (only one line – the last action taken.)

7drl 2014 - Day 1, Basic HUD
7drl 2014 – Day 1, Basic HUD
7drl 2014 - Day 1, Enemies
7drl 2014 – Day 1, Enemies

8 March 2014, 2:12 a.m. EST
Surprisingly easy to setup a basic minimap in Unity. Less than 100 lines of code, and only that many because of the weird nature of the player/enemy art. On the other hand it seems non-rectangular minimaps are a bit of a pita.

I felt a minimap in this kind of turn-based, first-person game is fairly necessary. As a lesson from Steam Marines players really want to know what’s around them. I actually had facing/turning cost an action point and people really didn’t like that. I eventually caved and added an option to make it cost 0 AP. This is my attempt to head off that issue.

Aside: I believe Eben, in Roguelike Radio Episode #68, referred to spinning in a circle to see around you as “lighthousing.” I think it’s a fairly accurate term.

Unhappy with the message log on the lower left. Not sure what to do about it, though. Not even sure what exactly I don’t like!

7drl 2014 - Day 1, Minimap
7drl 2014 – Day 1, Minimap

8 March 2014, 2:23 a.m. EST
Added a RogueTemple post to be updated with progress and build links once available!

8 March 2014, 2:31 a.m. EST
Enemies can now melee the player. Built an action point system for each enemy and the player. Current action point pools act as speed, meaning more AP = act before lower AP units.

Added death screen with fading to black, music fade out, and screen shake. Everyone loves screen shake. Screen shake was probably the hardest part. It’s also not very good xD

7drl 2014 - Day 1, Death Screen
7drl 2014 – Day 1, Death Screen

8 March 2014, 2:38 a.m. EST
Cross-posted to Reddit’s Screenshot Saturday!

8 March 2014, 3:24 a.m. EST
I’ve been practicing pixel art for about an hour a week for the last few weeks. It doesn’t show xD Still, this is the Enforcer. He’ll punch you in the face when he looks like the left side. He’s ready to be arrested when he looks like the right side. He is NOT crying. Really.

I will do better on my next enemy…

7drl 2014 - Day 1, Enforcer
7drl 2014 – Day 1, Enforcer

8 March 2014, 3:58 a.m. EST
No sexy screens this time. Fleshed out basic movements, attacks, and resource mechanics. Looking into combinations and chaining.

Put together a main menu. It’s two text buttons – not sexy.

8 March 2014, 6:53 a.m. EST
Implemented those resource use combinations I mentioned earlier along with some action chaining. Gameplay actually requires some thought now – huzzah!

Gang Member. Rude. Violent. Stabby stabby.

7drl 2014 - Day 1, Gang Member
7drl 2014 – Day 1, Gang Member

8 March 2014, 8:32 a.m. EST
Almost winding down Day 1 and Crime Central is almost playable. Well, you can play it, but it has no ending and no goal aside from “don’t die.” Three resources tied into combinations to use/regain each other, action chains for special abilities, three enemy types in increasing difficulty, and some placeholder tiles shamelessly ripped from Steam Marines. Will work on changing those tomorrow xD

Enemies are 2D and rotate to face the player and flip around when killed. Current status:

7drl 2014 - Day 1, Mostly Playable
7drl 2014 – Day 1, Mostly Playable
7drl 2014 - Day 1, Current State
7drl 2014 – Day 1, Current State

9 March 2014, 1:27 a.m. EST
After struggling with this for about an hour I don’t know wtf I wanted xD Was supposed to be a Techno Witch end game boss. Will probably make the surrender/arrest version later and stick it in after fiddling with it more.

But for now I’m going to cut my losses and go back to code!

7drl 2014 - Day 2, Techno  Witch
7drl 2014 – Day 2, Techno Witch

9 March 2014, 3:42 a.m. EST
Squashed a bunch of bugs. Tightened up the joystick axis controls; itfelt very sloppy when trying to execute commands quickly. In terms of making it a “completed” game I pretty much just need to implement the end goal and have a victory screen – huzzah!

I also have a design problem where it’s best just to dash for the elevator on each level. Need a sub-goal so the player may wish to explore/clear each level. Score is a possibility, but I’d like to avoid that if possible. It can be a lazy solution.

9 March 2014, 5:51 a.m. EST
Got quagmired in making the main menu fancy. I am an idiot.

9 March 2014, 6:48 a.m. EST
Some Win/Mac/Lin/Web builds!

Win x86 build.

Mac x86 build.

Lin x86 build.

Webplayer build (Note: This version is awful xD)

11 March 2014, 12:11 a.m. EST
More time to work on this! Going to finish that Techno Witch and add her as a boss – maybe with ranged attack or aoe?!? Implement an ending – and a secret ending? Also I want to add another chain combo.

11 March 2014, 2:20 a.m. EST
Implemented the Techno Witch as the end boss. Opted to keep her melee but give her power up abilities. The level generation also changes on the last level where she spawns.

11 March 2014, 3:28 a.m. EST
Added end game status and victory counter to the main menu. Added shotgun upgrade option after the player dies ten or more times. Game is essentially a complete (beginning/middle/end) product! Huzzah!

11 March 2014, 6:48 a.m. EST
I think I’m done? Polished some assets and UI. Added some sound effects for interaction confirmation. Pushing final builds soon.

11 March 2014, 7:30 a.m. EST
Some (final) Win/Mac/Lin/Web builds!

Win x86 build.

Mac x86 build.

Lin x86 build.

Webplayer build.

Unity 4.3.4 project with license file (Fairly certain I used no Pro-only features.)

 

That’s all for now! ^_^

 

 

*Lick*

(Note: I understand that communities are not singular. They are composed of multiple individuals. It can still be instructive to observe general sentiments and responses because they all blend into a singular sense, a vibe, a taste.

This is what I taste after licking the indie game developer community for the last few years.)

 

Sweet – Willingness to help other people

I don’t mean just other indie developers. As a group there seems to be a large portion of people willing to dedicate time, effort, and other resources to help others. Whether it’s raising money for specific needs, promoting other people, lending an ear or some motivational words, you can find it all within the community. While this isn’t unique to the indie dev community, I’ve found that it’s pervasive and that’s great.

The obvious examples are from crowdfunding campaigns via Kickstarter, IndieGoGo, GoFundMe, Patreon, et cetera. The less obvious examples are the micro-communities that develop around engines and other resources (e.g. Unity 3D’s user community is very friendly and helpful.)

 

Bitter – Willingness to destroy others

This manifested most recently regarding Flappy Bird, an app that grew extremely popular and apparently made the creator a lot of money – who then turned off that tap because of all the hate and threats he received. In some cases there was also a racial component.

This can also manifest in the Indie vs. AAA mentality. I’ve never seen an AAA dev shit on an indie dev for being indie, but I see the reverse on a daily basis. More to the point very few indie devs will even attempt to defend AAA. A lot of this is passive, tacit agreement.

 

Salty – Friendly rivalry

This may be my own bias at work regarding turn-based strategy games in particular, but I’ve also seen it in platformer devs, space sim/stragey devs, FPS devs, and others. The concept that we can all go far together is stronger than in many other entrepreneurial communities.

There are certainly people who still sabotage for eyeballs. I’m most familiar with Reddit’s Screenshot Saturday posts which recently underwent changes to combat this behavior.

 

Sour – I’m right, you’re wrong

The unwillingness to accept that people doing different stuff, or doing stuff differently, can be okay. This manifests in the more traditional language, engine, tool chain arguments, but also the types of games, production values, aesthetic choices, and design choices. The worst of this seems to come from developers who want challenging and compactly designed games hating on casual or simulation type games.

I am forced to admit I’ve fallen into this category on occasion although I try to rein it in. Being critical of games is good. Saying there is only one supreme type of game (that happens to be the kind you’re making) is just an act of masturbation.

 

Umami – The IDGAF attitude

Despite all the hate, despite all the naysayers, all kinds of stuff still gets made. Why? Presumably because people want it. They clamor for it, and sometimes they end up making it themselves. So no matter if people snort at Skyrim’s combat mechanics, or applaud Super Meat Boy’s controls, or cheer for more voxels or less.

Whether it’s meat and potatoes you’re looking for, or a nice garden salad, you can find it here.

 

Thanks for reading,
Mister Bums

You can contact me at yjseow@worthlessbums.comTwitter, or leave a comment below!