Game Design, Programming and running a one-man games business…

Why your indie budget calculations are massively, stupidly WRONG on every level.

cliffski

I see a lot of pitches that contain budgets, I also read a lot of post mortems. Some of them make me laugh, some make me cry, some of them actually make me irrationally angry about how badly wrong they can be. Just in case you are too busy to read this blog, here is the TL;DR:

The cost of your office chair is not contained entirely within your budget for fucks sake.

And yes…this comes from ME the person who famously argued (seriously) that everyone making an indie game should buy (second hand if necessary, mine was ex-display) a Herman Miller Aeron ultimate office chair. (I paid £800).

chair

I see a lot of budgets that look like this:

2 man-years development @ $90,000 per developer.

2 x top-end development PCs.

2 x office chairs

etc…

I don’t reply, but if I did, it would involve swear words and lots of capital letters. Why? Lets look at it like this shall we? I need a new boiler fitted (I don’t…but lets indulge in the willing suspension of disbelief for storytelling purposes). I phone around and ask for quotes from some plumbers. Here is a sample quote:

Quote for new boiler:

1 x New boiler £2,500

1 x plumbers van £15,200

1 x spanner £4

1 x blowtorch £45

1 x plumbers shoes: £65…

plumber

Aha! hold on! we have just realised how totally flipping insane this is haven’t we? Please tell me its obvious…please tell me I’m not the crazy one here? I’m literally begging you. The chair I am sat on typing this is the chair I bought shortly after moving house about 6 years ago. its the chair I coded all the DLC for Gratuitous Space Battles in, also the chair I made Democracy 3, Democracy 3:Africa, Democracy 3’s DLC, Gratuitous Space Battles 2, Gratuitous Tank Battles, and the chair I published Big Pharma and Redshirt from. Its the chair I’m coding for Production Line from. Have I made my point? I hope so. Also its as good as new, I suspect I’m less than half way through this chairs working life. My per-game costs for this chair are probably about £50, of the £800 I invested in it.

Depreciation and Capital Investment are things. If you want a publisher to invest money in you, you MUST at least understand them as vague concepts. Also…fuck publishing, if you are starting in a career as an indie developer (or anything!) you have to understand them. You have to understand investment, you have to understand the long term. It seems a growing number of people are attracted to the ‘romance’ (ha!) of being an entrepreneur, without any willingness to understand what it really means. There are also a LOT of wannabe game developers who think ‘paying your dues’ is something that happens to other people, or only in the movies. While I am annoying and offending everyone, lets go the whole hog and share some realities:

Reality Check #1: You having graduated with a degree in Computer Science does not mean you are gods gift to programming. You will be VERY VERY lucky to get a junior coders job fixing bugs in the tools. Expect to do that for at least a year.

Reality Check #2: Its quite practical to employ programmers on the other side of the planet, even without meeting them. I’ve never met half of the Squeaky Wheel team, and they did a great job. Your competition is global, not the other guys/girls in town.

Reality Check #3: Some cost comparisons:

Consumer Prices in Manila are 59.57% lower than in San Francisco, CA
Consumer Prices Including Rent in Manila are 74.11% lower than in San Francisco, CA
Rent Prices in Manila are 86.59% lower than in San Francisco, CA
Restaurant Prices in Manila are 73.26% lower than in San Francisco, CA
Groceries Prices in Manila are 66.51% lower than in San Francisco, CA
Local Purchasing Power in Manila is 57.87% lower than in San Francisco, CA

Remind me why a studio based in Silicon Valley, made up of young (inexperienced) recent graduates is a better bet for making commercially successful indie games than…I dunno ANYWHERE else on the planet? Oh and by the way, pointing out that health insurance costs are expensive in the US just makes the case for hiring someone from Europe/rest-of-world even stronger.

I know I’m coming across as one of the famous monty python yorkshiremen sketch members..but jesus christ on a bike, why are so many people expecting to walk straight out of college in the west coast of the US straight into a middle class income in a much-desired profession without so much as breaking a sweat? Frankly, even if you DO have skills that are awesome enough to compete with the price differential against coders in other locations, I’d STILL prefer someone who had struggled, and was ‘hungry’ for success than someone who just ‘expected’ it.

I feel that generally there is a vast discrepancy between the income/lifestyle that many recent graduates ‘expect’ and the lifestyle & income they will actually get. I never expected to earn a tenth (seriously) of what I do now, and that’s why I still work as hard now as I did back then. I’m used to expecting to have to work my nuts off to stay in the industry and keep my head above water. Why am I MORE paranoid about competition that many people who are so new to the industry?

 

When I started as a programmer, There was way less domestic competition, international competition was very low, we had little competition from serious middleware (most studios made their own engine), and nobody thought the industry was a path to riches. It was still VERY hard to get a job, and my first job was indeed…tools programming,  and I had to commute four hours a day (yes…four) to get to and from that job, to earn HALF what I’d earned a year before working in IT support. Just because people like me, who have been coding for 36 years (yes really) and released over a dozen games have nice flash cars doesn’t mean you get awarded one on your first day in the industry.

TL;DR: Your salary expectations are very high, and you need to google ‘depreciation’ and ‘investment’.

11 thoughts on Why your indie budget calculations are massively, stupidly WRONG on every level.

  1. [quote]
    Reality Check #2: Its quite practical to employ programmers on the other side of the planet, even without meeting them
    [/quote]

    “GRATUITOUS SPACE BATTLES DEVELOPER IN ABUSE OF THIRD WORLD EMPLOYEES SHOCKER!”
    ;)

    And of course you can also relocate yourself. In a previous life, I spent 5 or so years living in a goat shed in the sticks of Cyprus as a bohemian artist. Pre-Cypriot EU membership, I needed 1700 quid and to pass TB and HIV tests for a residency permit.

    As for chair’s I’ve got a standing desk (it’s really an A0 drawing board turned horizontal) and a high draughtsman’s chair which cost 80 quid new. This little setup gives the opportunity to move occaisionally.

    Also I like my flooded hole in the road. ;)

  2. It boggles the mind that indie devs would _willingly_ choose to locate themselves in an area with extremely high cost of living like San Francisco, NY, or really any overpriced metropolitan area. When you’re looking to work for someone else, sure, it makes sense to go where the jobs are — but if you’re starting out small as an indie dev studio, presumably with a group of friends or relying on contractors — why not move somewhere cheap and keep your burn rate as low as possible?

    There are incredibly affordable areas, even in the US and Canada: 3 bedroom houses near me are renting for $400/mo. This is a place with an aging population, zero crime, low property taxes. Health care is “free”, I know the people who grow my food and butcher my steak, and yet there’s probably not another programmer within 100 miles of me.

    At the very least I’d expect more contractors to have wizened up. I’ve landed plenty of jobs simply through a combination of low-balling and being located domestically, and while the money I make wouldn’t go far in SF, I suspect after adjusting for tax and cost of living, I’m doing quite a bit better than everyone except the guys pulling $180k+.

  3. I’m an indie developer in San Francisco. I manage to do it by not REALLY doing it. I have a full time job which I like and also pays the bills, and on my commute and on some weekends I work on my indie stuff. It works out well.

    That being said, California charges $800 / year for an LLC to even exist, so you actually have to bring a bit of money in or your indie game hobby will literally be an expense. And don’t do a sole proprietorship (cheaper) – that’s a legal problem waiting to happen.

  4. Unfortunately, it’s a behavior we have observed for several years now in pretty much all industries on this side of the world (Canada). For some reasons, a generation of workers seems to have forget the concept of working hard and getting experience in your field and are expecting all job perks from day 1.

    I used to work for a local fair, hiring temp workers for the duration of the events (2 weeks) to sell entry tickets. It was easier to convince older people, quite often retirees looking for extra money or looking for a reason to meet people, to work for us than younger folks. Yes, this is paid at minimum salary; no you’re not going to dictate your work schedule; no, you can’t have lunch money; it’s a freaking 2 week gig with very simple manipulations, you don’t even have to be good with math, the computer will tell you how much change you have to give back, and thank god for it!

    1. Or it could be that young people have better options than older people and don’t need to take your shitty gig. Duh.

  5. This is a little tangential, but – frankly, the vast majority of “comp sci” graduates make me angry in a lot of ways. I do a lot of interviewing (for a major tech firm) and probably 90% of the comp sci grads I see have sleepwalked their way through three years of basic Java programming with a couple of additional modules, retained 10% of what they’ve been taught, and never applied so much as a neuron to independent thought. I need people who can teach themselves stuff, work things out for themselves, posses some curiosity, and care about details… and I hardly ever see that in comp sci grads. And I guess the same set of attributes apply as an absolute bare minimum for anyone hoping to make it as an independent outfit.

  6. They forgot to include the cost of a new house, in the bay area. Must have been an oversight. Those houses aren’t cheap and they aren’t going to pay for themselves.

  7. Those people should search on the Web (not ‘google’, which is a neologism coming from a brand, which is of the worst species of neologisms) the word ‘accounting’.

    All you are describing in great length (probably too long for anyone targeted to actually read) are ‘indirect costs’.
    By definition, not something you can link to a specific product/service, on the contrary of ‘direct costs’.

    Those are basic accounting words, and proper budget needs those notions. Engineering school usually teach basic accounting, and anyone aiming at being en entrepreneur at any point in life requires learning this.

    Another way to introduce indirect costs is to say:
    You need to deduct from you individual product/service profit the a sum of money you will use to pay back stuff you bought on the side (or integrate this sum in each individual product cost).
    This objects will be worth nothing at a point in time (which is usually standardized by regulation). This is the point where you should have gathered the money you paid for them, not before. And this money will come from, and be proportionally spread over, everything you sold meanwhile.

    How? Accounting gives you the keys. It is simple maths, really: practical and fun!

  8. Try coming at that question from another angle; what do you get from a Silicon Valley address? There’s an immediate bump to your clout, there’s access to a huge pool of enthusiastic talent (expensive and inexperienced, but let that go for now) and you have much easier access to investors looking for the next snapchat or instagram. You’re assuming a Silicon Valley startup game studio has a desire to actually produce games, I’m thinking they’re wanting to game the system.

  9. To be fair, they may just not realize how awful the game industry is. Good programmers can easily get close to $100k per year straight out of college, with good benefits and no death marches.. as long as they don’t make games.

Comments are currently closed.