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How Much Money Can Indie Games Make, Part I

How much money is in Indie Games?

This is definitely a popular question. Here are two typical emails that I have modified and paraphrased a little to protect the innocent (please note that I did not change the grammar or spelling):

From the obvious newbie:

Recently ,my friends and I are interested in Indie game development, we want to make our own game .We have many questions about Indie games.Could you please give us some suggestions?
What shall we do at the begining? How many copies could sell on the average.
Thanks a lot.

From the professional game developer:

I don’t want to waste your time, so I’m going to keep this simple and to the point.

A programmer friend and I have been in professional game developers for 8 years now, and are beginning to research how to go indie.

What we have been trying to figure out is what the ‘general numbers’ are for average independent titles. Basic questions like: What are good sales? What can you expect to gross per copy? How long is the typical title in development? What is the ‘breaking point’ for download size? What genres are most popular? These are just a few of many, and I know there are issues we haven’t even dreamed of at this point.

We’ve speculated on what amount of venture capital we would need to develop a basic title, but it’s just that – speculation. We are both have families and homes, so we’re being very careful about out assumptions and research.

While these emails obviously have different levels of professionalism and presentation, they both ask basically the same question, i.e. what game should I make and how much money will it make? These are both big subjects, and since this post is about how much money Indie Games make, the other question(s) will be addressed in later articles.

So, quit stalling and get around to it. HOW MUCH MONEY CAN MY INDIE GAME MAKE?

OK, You’re not going to like it…

42

Huh?

42 is “The Ultimate answer to Life, the Universe and Everything” according to Douglas Adams in Hitchhiker’s Guide to the Galaxy, so it must be a good enough answer to such a vague question.

Another glib answer is, how good is your game?

Now we are honing in on the answer, and the problem with giving “average” answers. If you want the average, then the answer has to be…

ZERO.

Yep, zero, zip, nada, as in Zero Dollars, Euros, Yen, or whatever your national currency happens to be.

Not to discourage wanna-be game developers, but the average for the first question posted in this article will definitely be zero. In fact, it will be less than zero, because I can almost assure you the game will never be completed. Selling something means you are a professional and you need to make products good enough to sell. In order to get good enough, you will need to practice, make a bunch of throw away games, get to know your team mates, make some more games, give them away for free, watch people play them, learn what you did wrong, roll it into your next game, then another, and finally you may have enough experience that people will want to pay you for your creations.

Now that you have reached the point described in the above paragraph, you are more in the same boat as the second email question posted in this article, and we can start talking about success strategies, and how much money an Indie game can make.

For this exercise, we’ll use the Casual Games market because it is accessible by Indies, and it currently a hot enough market that money can actually be made here. Keep in mind that urban legend has it that the casual games market is dominated by 41 year old females, so it might not be your cup of tea. However, other Indie games markets are not as established, so it is harder to find sales data.

Let’s start at the top, since that is the easiest place to find data. Go to Game Sales Charts to find out actual sales data from Real Arcade, one of the largest on-line game sales portals. (another good thing about Real is that they are a public company, so they frequently give actual sales numbers for the entire portal, so you can make assumptions about the total size of the casual game market. Phil Steinmeyer has recently taken a good shot at doing just this, check it out).

I’ll let you do the math, but now you can find out the annual sales of Real by looking in their 10Q, figure the average weekly sales of Real’s portal, then make your own assumptions about how much of that revenue the number one game would get. Now apply those percentages to the number of weeks a game appears in any of the top tracked spots. This will give you a good approximation of how much your top selling game on the Real portal makes.

Now you can go back to Phil Steinmeyer’s site and apply the market share numbers for each of the portals, and decide how much more your game could make by being in wide distribution. Remember, that independently developed games will usually end up on all of the popular portals.

Like I said, I’ll let you do the math, but, in general, we expect the top selling games in the casual space to make anywhere from $1.5MM- $7MM in a year. WOW!! That is huge cash! But, there are some catches.

I’ll have an entire article on royalties, net payments, etc., but for now just assume your company will get 30% of that money. OK, that is still a WOW! Or, maybe a not bad, I can live with that.

I said the top selling games. Look at the Real sales charts and see how many games would actually hit the top. There are a HUGE number of games chasing those top spots. Big Fish Games alone published 365 games last year. Also, take into account the fact that many of the portals are starting to create their own content for all of the top promotion, marketing, and sales on their sites, and it gets even harder.

That said, if you do create a hot property, there will be bidding for your game. In fact, right now, the market it hot enough, if you make a couple of great games in a row, you will probably be getting offers to buy your company.

A bright side to consider is that additional markets are becoming very real for the top developers. I have already covered the XBox360 Live Arcade download market, and the cell phone marketplace is really becoming hot as well.

To summarize, if you are a great game developer there are huge opportunities in the Indie space right now.

Next time, I’ll cover more of the middle part of the market, i.e. what you can expect if you are not at the top of the charts.

-Jeff Tunnell, Game MakerMake It Big In GamesGarageGames

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  • http://www.blisteredfingergames.net/bleedingeyes/ James Randall

    I found that quite an thought provoking article Jeff. Though possibly not for the reasons you imagine (I don’t actually have much interest in how much an indie game can make – hell if I make $10 off mine I’ll be ecstatic).

    Instead I found myself uncomfortable with your section on “wanna-be” games developeres. Specifically that you seem to be making the assumption that a professional produces quality output that people want to play. I think many people in the industry wouldn’t actually meet this criteria and yet would be considered professionals solely on this basis that they get paid for what they do.

    Anyway I ended up posting two lots of thoughts on my own blog about it.

  • Karthik

    Yeah.. some life for an indie game dev, uh :P There’s no chance a noobie can every get to earn as much as a pro game dev does, unless he’s incredibly lucky; Every game studio wants a guy who’s shipped 2 or more AAA titles … screw it!

  • KevinMc

    Actually, James, he says “Selling something means you are a professional and you need to make products good enough to sell.” What that implies to me is not that a professional “produces quality output that people want to play”, as you read. But rather, that in order to sell your game, you must A) BE professional – as in act and work in a professional manner, and B) make products good enough to sell – implying not all professionals will do so.

    It’s not enough, in other words, to have cool ideas for products. You must work, release, and do business in a professional manner as well. Nor is it enough to act professionally – you must make quality products of a type people really want to play, too!

    A note to Karthik… I don’t think the articles here are meant to be “pie in the sky”. Indie development is NOT an easy road. You pay a lot for the creative freedom and sense of accomplishment you can get. That said, I think it’s only a little about luck, and instead largely about long hours of hard work, and massive amounts of effort.

  • http://www.zoombapup.com Phil Carlisle

    Hi Jeff.

    It’s a question that many people ask because it gives them a sense of security knowing that there is actually a market out there. Of course you guys can say “ok, its probably good enough to quit your day jobs” now, but its hard to do that without firm figures.

    But then, It doesnt help much knowing what ANOTHER developer earns, because chances are that you will never have a perfect match of product to profits as them.

    Its like saying “what will GG make” and then extrapolating/interpolating that value to your own goals. Total waste of time.

    I think its a really key thing here Jeff, because I’ve been hung up on the same thing myself for long enough to realise it really doesnt matter. Making something trying to chase specific sales figures is kind of ass-backwards.

    Better to try and create a game that fills a need. Find something that customers really cant get anywhere (but the important part is that they actually *want* it) and fill that need.

    How to choose what people want is another article really. That’s definitely something that needs exploring. But for my part, I chose the easy route of going for a “dead” genre as that at least has a known dimension from a few years ago.

    Strange thing is that since I’ve given up caring about the details of this kind of thing, its been so much easier to be productive and just get on with the process of creation. Maybe this whole issue is just a red-herring??

    Good read anyway Jefff.

    Phil.

  • http://www.garagegames.com Jeff Tunnell

    Phil- That is the fodder for another post, or many posts for that matter. Why do we make games? Money should probably not be the prime motivator, but it still helps people to have some idea what could happen if they do become successful.

    My prime argument would be to make games for the passion, and the money will somehow be there. Imagine if four guys get together and decide to make a rock band. Is their first question how much money can I make? Probably not, and if it is, they probably will never make much. Sure, three good musicians could form a lounge band and be assured of a little money on week ends, but they probably should not quit their day jobs.

    I’m glad to hear you finally giving up on the money issues and concentrating on making great games.

  • Ben Garney

    Don’t forget that there’s a fairly clear path to going from “newb” to “pro” – go out and do.

    Claw your way into the industry. Learn everything you possibly can. Make sure to produce tangible products – for instance, I’d be much more confident hiring someone who’s finished several small but unsuccessful projects than someone with big ideas and nothing to show. Little arty games may not sell but they show you know how to make something that’s at least a little interesting. Take a small project and then move up. Run a little website so you can get some love. Get some answers and share them with people.

    Building a name for yourself as “someone who has a general idea what he’s doing” isn’t super hard; you just have to have a little talent, be persistent, and keep learning.

    And once you’ve got a little name for yourself of that sort, you’re likely to get all sorts of interesting opportunities.

  • http://www.zoombapup.com Phil Carlisle

    Thanks Jeff,

    Actually, strangely enough, now that I’m not even bothering about money and sales stuff, it seems like things are going 10x better :)

    I dont think that people should necassarily discount sales and marketing entirely, but I agree that its basically a moot point unless you actually start shipping games.

    The weird thing is that I’ve never been particularly bothered about money, so maybe that was always the wrong way to think about things. I mean sure, I dont want to throw money away, but given I dont have to make my living at this anymore, I can do pretty much what I please.

    My goal really now, is to create some games I’m proud of and hopefully to earn enough from producing them to actually start employing someone else. I dont particularly want to give my job up, as I enjoy teaching, but my ideal would be to spend most of my time leading a small team and balancing that with my lecturing.

    But hell if it hasnt taken a long time for me to get here! I guess maybe my experience suggests that the hardest part of being an individual indie, is actually finding the right partners. Selling games and all the rest is easy compared to just producing the things and I’ve found that the hardest part of that is 1) working alone being too sucky 2) finding good people to rely on is hard.

    So I’m going to request that you tackle that subject in a blog soon Jeff, how do you find and keep high-quality partners!!

    Phil.

  • http://www.korpos.com.ar J.Plano

    I think the Indie Game development is a very risk venture, but you have a lot of fun for doing it , and …..with some luck mybe you can get many to :)

    J.Plano

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  • http://www.lightworksgames.com/blog Thomas White

    When we were first investigating making an indie game we e-mailed a lot of developers asking these same questions about sales and found that they couldn’t answer for the most part because the portals wouldn’t let them reveal the info.

    I agree with what you’re saying about any such info being really subjective, and of course every company’s sales stats will vary so wildly that it’s impossible to use them to predict your own potential success. I guess what we, and other indie’s asking the same question, are really after is just the assurance that it is possible to support yourself financially if you can make successful indie games.

  • http://www.gameproducer.net Juuso – Game Producer

    …and of course you should also check the SALES STATS:
    http://www.gameproducer.net/category/sales-statistics/
    :)

  • http://www.vertex4.com roman pfneudl – vertex4

    Hey Jeff !

    Very insightful article ! Can’t wait to get part II (the middle part of the market) in my shivery developer hands. :)
    I feel more as a independent developer than an indy developer but still the whole market thingy is just a miracle to me. But well, at least i did exactly what the consensus of the comments seems to be: just do it & dont stop it. okok, it took me 9 years to get my first title into the shelves, but it worked out after all.

    But hey, i can say i’m into the biz for almost a decade. yeah. :)

    Cheers,
    Roman

  • http://www.gamesmaken.startpagina.nl Wouter Baars

    I think it basically is not so much diffrent from wanting to be an artist (in whatever genre). You might make enough money, but you will have to be good! So perhaps better focus on that question first: do I make good enough games!

  • http://blog.doublejumping.com Erik Chan – Double Jump Studios

    Yes. I agree with Baars. It is about how great the game is. It’s all about polish.

  • http://www.vertex4.com roman pfneudl – vertex4

    true, but i just fear, that marketing & hype is a huge factor, no matter how good & great & awesome your game in all aspects of game design & implementation is.
    I fear, a game can be supergreat, but still sell like crap, as long as the marketing sucks. Of course i hope this is a ungrounded fear. :)
    But yes, i definitly believe into long-term success as long as one makes things that are solid enough.

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  • John Smith

    Asking the question: “How much money can I make with my game?” is just wrong. As a game developer you act like an artist. If a painter is asking how much money he can make with a painting he obviously is more interested in the money than in creating great art. An artist should believe in his ideas and arts.
    There are too many factors to answer this question like:
    - Whats the audio/visual quality of the game?
    - Whats the type of game? (puzzle, 3D shooter, jump’n'run, card game, …)
    - What is the range of players that would play the game? (genre depending)
    - How addictive is the game?
    - On what systems you can play it?
    - Whats the price?
    - Is there a good combo of ideas or even a new game idea in it?
    - How (professional) will it be published? (marketing)
    - Can I play together with other players (LAN, WLAN, …)
    - …

    Just to give you some ideas what can affect the sell rate (and there are many, many more factors). Every factor will have another influence to the game sell rate. If the visual game qualitity is at a low rate but its highly addictive people will play it rather than the 1000th clone of Tetris. So even the factors must be counted differrent.

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  • http://none Egomancer

    Well,

    Money IS important if you want to make professional games. I do not see how anyone can make in his basement a game that can compete on any market – and this includes casual games too. We do not talk about XBOX360 titles here because the costs (and time invested in this) for those are even greater. All the casual games that we made had teams of 3-5 people working like 6 months on ONE title. And when you work 12h a day, 6 days per week to make a game money start to matter. Especially when you do this FOR years.

    So people before really geting into this should ask this question: Do I really want to work my ass to the bone to make games that do not guarantee me the money to live until I release the next game?

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  • Jorge Avilas

    nice article! nice site. you're in my rss feed now ;-)
    keep it up

  • Mummy

    I am a game developer..how can i apply to the Indie space..
    annualcreditreport