Category Archives: business

At the time of writing, a quick check of stats on steamspy for player unknown:battlegrounds reveals this chart:

A very basic analysis suggests 500,000 copies this month, at $30, minus maybe 40% for refunds/taxes/steams cut gives us:  roughly $9million this month. Total sales stand at 3 million, for a total estimate of $53 million so far since release 3 months ago. Assuming a lifetime doubling of that 9conservative) that gives us about $100,000,000. income.

The developer is listed as bluehole inc, who apparently have about 90 staff: https://en.wikipedia.org/wiki/PlayerUnknown%27s_Battlegrounds

So the average income per employee there is a million dollars. original team size was 35, so assume that half the money goes to equity holders and its split equally between the 35, that gives them roughly $1.4 million each. In practice thats bollocks, because more likely 80% would be going to the equity holders and I’d guess 90% of that belongs to maybe a handful, at best 4 people? (I have ZERO idea, this is my guesswork), which means company founders are probably getting about $22 million from the game. Include sequels, potential DLC, merchandise and so on, and you can probably round it up to 25 million.

Thats a fuck-ton of cash.

But the problem is, the chances of Joe Indie game developer achieving this are close enough to zero as makes no difference.  There are 348 pages of ‘top sellers’ on indie games on steam. Taking the mid point, and looking at the top game (I wont pick on it publicly, so lets not name it). Its an RPG with Zombies in apparently (that shouldn’t narrow it much :D). Steamspy says…. *drumroll*

3,500 owners. Top price has been $9.99, been out 9 months. Maximum conceivable income is $20,979 to the developer. In practice, as its been on sale, lets multiply that by 50% and get about $10,000.

This game isn’t exactly World Of Warcraft but it has a proper 3D graphics thing going on, positive reviews and a decent capsule graphic. lets depress ourselves with the numbers:

Assume the developer is a single person with no other costs and keeps all the money: $10,000 a year, or roughly 1% of the revenue/employee as PU:BG.

Assume they are the founders/owners/creators and keep all that sweet cash, they earned roughly 0.04% of the equiv person behind PU:BG.

Yes…these figures are very very rough, but I didn’t deliberately pick something bad, in fact I picked half way through the indie top sellers. Are we really thinking they sound so out of whack? This is a WINNER TAKES ALL market. You are either in the top 0.1% of indie game developers, or you are unemployed, with an expensive hobby where you make effectively free games.

This is nobodies ‘fault’. Steam didn’t cause it, Unity didn’t cause it. games got easier to make, and more people got access to PCs, development kits, computer skills and broadband. Its really no different from waiting tables whilst pretending to be an actress, or avoiding admitting you are unemployed by claiming to be a writer. There is virtually nothing I can do about this, and nothing you can do about this, but there is something we can collectively do to at least minimize the collateral damage:

Lets admit that the default position for an indie game developer is pretty much poverty. If you want to make money, maybe one day buy a house, start a family, have a pension, why are you making indie games? You KNOW you are almost certainly screwed right? or to put it another, simpler, TL;DR way:

YOUR INDIE GAME WILL FLOP AND YOU WILL LOSE MONEY

Now, *some* people don’t flop, and do well. And that *might* be you, but I urge you, go into this job (like any other) with your eyes WIDE open. Your chances of success are incredibly, incredibly small. This is not a sensible career. This is not a wise career move. This is almost certainly personal financial suicide. You may (like me) feel compelled to make games regardless of success or failure, but ALWAYS know the odds. ALWAYS. (Han solo is wrong about his topic). I know people get inspired to make games by reading about the success of some developers (including me), and that’s great, but always know what you are doing. Do not remortgage your house to do this. Do not both quit your job and live off savings to do this when you have kids to support. Do not assume you are different or special.

Treat this as a disclaimer for my blog: You are reading the thoughts of a guy who was coding since age 11, has 36 years coding experience, has shipped over a dozen games, several of which made millions of dollars, got into indie dev VERY early, knows a lot of industry people, and has a relatively high public profile. And still almost NOBODY covered my latest game (in terms of gaming websites). Its extremely, extremely tough right now.

 

So Production Line has been in Early access on GoG and Steam now for about three weeks now. We were in pre-release pre-order thingy for a long while before that. I’m almost at the point now where steam sales equal the number of pre-EA sales, and things are ticking along quite nicely. At one point there was a BIG discrepancy between the review scores of pre-order direct customers (97% positive!) and Steam, but the overall steam review score is creeping up (76% positive as I write this).

Basically we went into EA with an under-done tutorial and poor game balance, and although you can say that about absolutely every single EA game I have ever played, apparently we shouldn’t have done that. Thankfully improving the tutorial was fairly quick, and although the game is far from balanced, its much better than it used to be, as is the GUI.

Interestingly the game is phenomenally popular in Germany (our #1 sales country) despite being only in English, hence today’s update provides all the code support required to enabled multi-language support, and I know a bunch of players are already keen to help out with a fan-translation, so that should be something we can get into the game pretty quick.

I’ve been using keymailer to send out youtube keys, which is revealing in just 1)How many people with FUCK-ALL followers and viewers think they will get free keys, 2)How few people who even request keys actually accept them and 3) how few of those even install, let alone cover the game. I am close to thinking that the traditional ‘send out youtube keys’ part of PR is close to useless. Most of the youtubers who have actually driven traffic are people who presumably bought it, as I never sent them a thing.

My strategy for Production Line has revolved around two plans:

  1. Try to be as responsive as I reasonably can on youtube/twwitter/reddit/facebook/forums/steam to everyone with questions or comments about the game
  2. Regular updates and regular developer blog videos.

This is all FREE, but it takes up a lot of TIME. Fortunately as a workaholic whose job IS his hobby and who lives in a field with few friends, I have lots of time. Hurrah? In all seriousness I do wonder if the true equation of indie game success is something like this:

GameSuccess = ((Experience + Originality * (1.0 – SocialLife)) – (0.1f * NumberOfChildren)) * (AdvertisingBudget + GenreProfitability).

Probably not far off anyway. The amount of indies I meet who seem to know EVERYONE, who are very extrovert, who have been to every show, and have played EVERY game, and are incredibly well travelled and love to party…whose game you can then look up on steamspy and realize they are living on food bank donations is non-trivial.

Anyway, I am in the happy position to be able to work on PL in a relaxed and fairly calm way, because believe it or not Democracy 3, our politics game from 2013 is still making enough money to keep positech running even now. Speaking of Democracy 3, I have EXCITING news that is coming soon, although for horribly technical reasons its not *quite here yet*. Anyway… expect version 1.23 of Production Line today, its a cool update featuring touchscreens, cameras, a better car-sales design, and multiple language support.

So…Here we are, a few days after the release of Production Line into Early Access on Steam and GoG. How did it go I hear you ask?

Well if you read my earlier post on the pre-release guesswork and nerves here, you will recall that I was hoping to sell 300 copies in the first day, and had extrapolated to that showing the game to be a decent success that i would be very happy with. It turns out we sold about triple that amount (including humble,steam and GoG), so suffice to say I am very happy with how well the game is being received. Also we are getting some very nice coverage like this, which is always good.

On the flip-side, we clearly have a few crashes in the game AND also had a bad problem with balance. Essentially, the 1.19 release which was the EA build was unbalanced in terms of the rate at which the AI researched car technology, and also the number of technologies that could become universal. The system meant that very rapidly the AI had reduced cars to being effectively worthless because you needed a ton of essential tech which you could charge for, and went bankrupt…yikes.

This was patched yesterday, and the AI is now much calmer, the list of tech that can ever become universal is shorter, and the universal tech is still (partly) chargeable, making the game much more playable. of course now a few people say it is way too easy so…thats the next step in the path of game balance :D

The big moment of stress for me over the weekend was a sort of self-induced problem. I had been working for a while (in the run-up to the 18th) on a major revamp of the way car designs are done, allowing you to define different car ‘models’ such as ‘Standard’ ‘Sport’ Deluxe’ etc, and have your production line recognize each car and install the appropriate bits. This is VASTLY better than the old system  that shipped in 1.19. This was also something that players of the game had requested quite strongly through the priorities voting, and something I wanted to get in ASAP. The problem is that I hugely underestimated the ramifications in code of doing this, and how much needed to be changed, tweaked, fixed, and tested. The result was that I had a half-finished feature I really badly needed to finish before I could look at the balance and crash issues people were angry about.

At one stage we dropped out of ‘positive’ steam reviews to ‘mixed’. ARGHHHHHHH.

So to cut a long sleepless story short, I worked a damned lot of hours on coding, testing and verifying this feature, did some emergency code fixing for the balance stuff (which is also a vast improvement) and finally after a lot of testing released 1.20 to the world yesterday (GoG build still uploading…damned internet). As a result we are back in ‘positive’ scores, and things can only get better :D

So…apart from how stressful EA launches can be what else have I learned?

  1. People don’t leave steam reviews. Maybe 1% if you are lucky. You really would be amazed at how skewed steam reviews are. I have no idea how to fix this to ensure its more balanced :(
  2. Youtubers who request keys through a proper site (like keymailer) often do not accept the key when you give it to them. then most of them who accept it never install or run the game. Most of the ones who install and run the game don’t make a video, or even tweet about it. This is both surprising and infuriating.
  3. People automatically expect to get a game cheaper in the future. We have about 15,000 wishlists already. I have zero intention of dropping the price or putting the game in a sale. it will be interesting to watch what happens as a result.

I feel so much happier than yesterday when I was stressed as hell. And yet then, today some extremist maniac blew up children in my country. FFS.

I’ve been around a long time, and released a lot of games, so this is hardly a new experience for me to be releasing something new. Plus its already out there in alpha pre-orders anyway, and this is just the appearance on Steam and GoG, plus I am not in dire financial straights or debt needing this next weeks sales to buy food, so taking all things into account, this weeks release of Production Line on Early Access should be no big deal.

Holy fuck its stressful.

I’m kind of prone to ‘fear of the future’ anyway. Nothing to do with games. As a kid, we did not have much money and I was aware of the constant fear of future financial problems. I also grew up during the height of the cold war, where we actually assumed we would all die in a nuclear war. We had TV programs like this, for crying out loud. I also remember watching a TV show (for kids, believe it or not) where armed police broke into a kids house, arrested his parents and seized their stockpile of food, because they were hoarding some. (70s TV for kids was pretty fucking bleak).

I am a political junkie, and an avid watcher of predictions about the future. I go from worrying as a kid about money and nuclear death, to worrying about the politics of my country, the environment, my own finances and pretty much anything I can worry about. I worry about how this blog post will be received. maybe thats why I used to have lots of hair.

..and now have less.

Anyway, I find solace in numbers, facts, statistics, and so on. Nothing reassures you that you don’t need to worry about X better than a chart showing you that X is fine. So lets go to the data!

Production Line went on sale to pre-order alpha buyers from my website on 22nd January. Since then it has sold about 9,900 copies. The price has risen steadily from $10 to $13. On Thursday it leaps to $15.99. You can do some rough maths and work out how much the game has earned so far, and indeed, it is in profit, if you assume all that code I wrote was free. if not, it works out as $23.84 per hour of my work. Thats not *bad*.

If we assume that the game sells another 10,000 copies at full price during its time in early access, plus another 20,000 at an average 50% price during its full release, that would bring in a total of roughly $425,000 revenue. Deduct development and marketing costs, and distribute that over the current dev time plus another six months… and my hourly income would be $93.22. Holy fuck. I can live with that. That sounds good.

Of course that assumes a long term tripling of sales. How likely is that? The market is tough…hmmmm.

Right now Production Line has a total of 2,313 wishlists on steam. There really has not been very much press about it at all. Press just seem impossible these days, and I can see why. they are swamped with whats new on steam. How to cut through? The occasional promoted post and facebook ad is ticking along for me, but I admit I am aiming for a lot of word-of-mouth here. I’m paying close attention to what players of the game think, and hoping if they really like it, they will play for a long time and encourage their friends to get copies. I’m also hoping people who played ‘Big Pharma’ will find the game interesting.

My YMLP mailing list has about 8,000 people on it. I have about 9,000 twitter followers and the PL Facebook page currently has 2,616 likes. I think all these numbers are ‘ok’, but does that put me in the top 5% of indie games? Hardly anyone above the real beginner tier of devs shares this information, so who knows?

I have bought a bottle of prosecco to drink Thursday night regardless, so I need to deduct that in my spreadsheet too… hmm….

So I have to ask myself what I am assuming here, and allows me to predict future trends. If I’m thinking 10,000 copies during say 6 months in Early Access, then I reckon 25% (2,500) in month 1, probably 1,200 in week one, so I’m thinking 300 sales on release day is a sign that I am on track.

I’ll let you know how it goes. I’ll aggregate GoG, Steam and mine direct, because you cant legally reveal exact store numbers. Even as I type this I find myself thinking ‘fuck, 300 sales in a day is *not* going to happen. ARGGGHHH. Quick! Add it to your wishlist :D

BTW I am still sending out review copies to popular youtubers, and websites, so email cliff AT positech dot co dot uk about that. I’ll be using keymailer on the launch day to send out some more.

If like me, you have an interest in tech business and marketing in general, then the name of Scott Galloway is probably familiar to you. he is the guy who gave an excellent talk called the four horsemen and also another brilliant one about the death of the industrial advertising complex. The way he sees things (and he is pretty well informed), brands are essentially on the way out, taking advertising with them. the reason? user-reviews and review-aggregation by platforms such as amazon (and more relevantly to me: steam) means that the value of a brand is no longer what it was. Advertising to build a brand is essentially pointless in an age where you can bypass the PR spin and look at the real data about what customers think of your product.

I find thinking about this to be very interesting indeed.

Essentially you advertise for two reasons. 1) To inform the potential customer about your product and 2) To build up positive associations about your product. I would suggest that 2) is totally dead, but 1) remains viable. There are reasons why 2) can still work, if you are associated with external signalling, in other words your target market for the ad is actually not the customer.

That might sound weird, but its commonplace. Its a phenomena associated with luxury brands. You might occasionally see advertising for a luxury brand you cannot possibly afford, and wonder how the hell it can be targeted so badly. The first possibility is that they are building long term value by hoping that 1 in 20,000 viewers of that porsche ad will one day buy a porsche. that’s true, but they also get indirect value from the other 19,999 viewers of the ad, because they perpetuate the belief that a porsche is driven by winners. When someone buys a porsche, they get a relatively low performance expensive to run and unsafe, expensive to insure car (compared to a tesla :D), but what they are really buying is status, and a projection of jealousy/admiration onto others. This has real value.

Porsche aren’t really selling cars at all. neither are Rolls Royce or Rolex. they sell status and luxury. These things cannot easily be quantified in a user review, so the ‘brand’ still has value. What they are selling is the knowledge that everyone knows you can afford the expensive product. In a way, by buying a branded luxury product you are a time-share owner of a PR team that tells the world how successful you are. its outsourcing of bragging and status.

Thats perfectly reasonable in some ways, I sound snarky but I’m actually not. I have a stupidly flash car myself. Humans are humans, and success is something people like to have recognized. Most scientists *do* collect their nobel prize, most successful business people *do* buy a flash car, most athletes *do* put the medal on the mantelpiece.

When it comes to something like a video game, we can’t really sell luxury and status and bragging rights, although top-tier kick-starter rewards and ‘premium’ accounts do their best. I notice that buying ‘premium’ so I get the DLC for battlefield one puts a little ‘p’ next to my name. I don’t give a fuck, but that P is there because some people will. In this case, you are advertising WITHIN the game. The ‘premium’ feature is so you feel you have a higher status than the other players, but thats still within the ecosystem of already-paying customers. F2P does this really effectively only it includes non paying customers too.

For most game developers, making money from top tier kickstarter rewards and premium accounts isn’t really going to be your bread-and-butter, so is advertising still an option for us?

Absolutely, but you have to be aware of what you are doing. Essentially your advertising exists (and so do appearances at shows, youtubers etc) purely to announce to players that your game exists. You are essentially buying name-recognition, logo-recognition and shelf space. Logo recognition is a valuable thing. lets pause for a word from our sponsors…

…and were back.

Where Scott Galloway is absolutely right, is that for non luxury near-commodity goods, advertising that builds brands is now pointless. Do I buy a Sony TV next or a Samsung? or LG? I don’t give a fuck, and nor should you. I can look at the reviews on amazon/other stores and pick the top rated one. The products are similar enough that I really don’t care. As long as the TV is available, and listed on the store, and *has some decent reviews* it will get my money. In other words, its 100% about the quality of the product. he has interesting points about voice-ordering on alexa that relate to this topic too.

To some extent this is true on steam as well. if I search for indie strategy games, then as long as production line has top tier reviews, and is a quality product, I should do well. The only problem here is that there are a LOT of indie strategy games, and a LOT of them have high reviews. I am hoping to *not only* get some sales from people generally browsing steam, but also from people who actively search for my game by name. Not only that, but I want my name/logo to pop out to people as some game they have heard of, so my game gets clicked on, when other games do not.

Basically, you are either hoping for traffic ‘within the store’ by having a decent product, or you are hoping for additional traffic *to* the store because you have established yourself as a name. I’m trying to drive traffic *to* my game, and am prepared to spend some marketing $ to get people there. Five years ago, steam was sparse enough to make a living from ‘just being there’ but now…not so much. Now you have to drive some traffic that way.

Conclusion? Advertising is changing, a lot. but it might not be changing for you. as a game developer.